Organisational_Behaviour_of_Apple_Inc.

APPLE INC. ORGANISATIONAL CULTURE OLUKAYODE OMOSEBI A4032655 ORGANISATION BEHAVIOUR COURSEWORK TABLE OF CONTENT INTRODUCTION………………………………………………………………3 CASE BACKGROUND………………………………………………………...4 KEY FINDINGS………………………………………………………………...5 KEY ISSUES…………………………………………………………………….8 RECOMMENDATIONS………………………………………………………..10 CONCLUSIONS…………………………………………………………………12 REFERENCES……………………………………………………………………14 INTRODUCTION The language of ‘Culture’ in relation to organisations and to organisational change has become increasing complex (Handy, 1985). Culture is a lens through which an organisation can be understood through an appreciation of an organisation’s behaviour, rituals, beliefs, shared ideology and unspoken assumptions. (Handy.1985) states that organisational cultures are never fully aligned, intrinsically complex and contain multidimensional subcultures. He believes that in identifying how these cultures behave, an organisation can gain both a positive and a negative understanding on the effect the culture has on the staff, workplace and the attainment of organisational goals and objectives Corporate culture defines the specific set of values and norms shared by people and groups within a company. Actually, values can be regarded as beliefs and ideas about what kind of goals should be pursued and the appropriate standards of behaviour for achieving these goals. On the basis of these values, norms are developed which constitute guidelines on expectations for appropriate behaviours in particular situations and the control of the right behaviour. As a result, it is the task of management to influence the values and norms of the organisation. CASE BACKGROUND Apple Inc. is an American corporation that designs and manufactures computer hardware, software and other consumer electronics. The company is best known for their Macintosh computer line, Mac OS x, extremely loyal user-base, iTunes media application and the iPod music player. Apple was established on April 1, 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne to sell the Apple 1 personal computer kit. The rise in sales of Apple, however, led to an increase in company size, and by 1980, Apple had several thousands of employees, a market share of 50% and was beginning to sell computers abroad. A number of more experienced mid-level managers, and several new investors opting for their sets in the Board of Directors caused difficulty in making design improvements that kept up with the advances in computer technology. This led to changes in CEO, from John Sculley to Michael Spindler and Gil Ameilo. The three (3) past CEOs managed the company in such a way that contradicted the Values, Culture and style of Apple Inc. Their consensus-style for getting things done made the company inflexible and slow moving. Key decisions were postponed, reversed, or avoided completely as various executives and factions tried to push their own agendas. This therefore led to a Apple Inc.’s failure. In Late 1996, Apple made an industry shocking announcement that it would be acquiring NeXT and that Steve Jobs would be returning as the CEO. Steve Jobs’ focus was more on building a strong brand, value, structure and mission for the company. This has led to the success of Apple Inc. over the past decade. On August 24, 2011, Tim Cook former Chief Operating Officer in Apple Inc. took over the position of the CEO from Steve Jobs due to health reasons by the latter. KEY FINDINGS The culture of Apple Inc. can be described as individualistic at the beginning which means that it emphasized individual empowerment and creativity and sae personal creativity and self-expression as the source of competitive advantage. As organisational culture is created by the strategic leadership provided by management, it becomes clear that immediate past CEO Steve Jobs is the optimal person that designed and developed the company’s culture with regards to the challenges of the 21st Century. The culture of Apple is based on an idea that self-motivated individuals will work harder even if they do not have a boss supervising their action. Its culture and structure had allowed it to grow and react quickly to market trend than its competitors. The reason for the quick responsiveness is simple; it is much easier to get a project started if there are only a few people to obtain approval from. Apple grew fast, because decisions were made at the lowest possible level. Corporate headquarters makes policy and oversees all activities, but the local employees made the day-to-day decisions on ground. This Top-down philosophy allowed for quick responsiveness and resolutions to situations, thus avoiding corporate bureaucracy. Some important elements of Apple’s culture are; Nurturing Diversity: Apple Inc. is an equal opportunity employer and promotes diversity within the organisation. Employees come with diverse experiences and from diverse background. Employees cited corporate diversity as one of the most positive agents of Apple’s corporate culture. A successful company reflects the style, taste and opinions of its consumers, who represent sexes, all colours and creeds, all age and disabilities. Cultural diversity will strengthen the quality of the company and will make the company much more outward looking (Gibson, 2002) Compensation and Benefits: Extrinsic motivation is a major tool used by Apple in motivating employees. Apple Inc. offers various benefits to its employees as a way of motivating then while benefits packages varied depending on location and employment status. The common benefit includes Insurance coverage, flexible spending accounts, employee stock purchase program, and a 401(k) savings and investment plan. Culture of Secrecy: As Apple is mainly into Innovation, the company’s policy is to keep things confidential. Secrecy is built into the corporate culture and the employees maintained tight control over information. Use of Teams: The management of Apple make use of teams in executing a project, and keeps the team relatively small in size. This has resulted in improving productivity, improving quality and encouraging innovation, and improving employee motivation and commitment. Various meetings engaged by teams are; • Paired design meetings. Every week, the teams of engineers and designers get together for two complementary meetings. • Brainstorm meeting. Leave your hang-ups at the door and go crazy in developing various approaches to solving particular problems or enhancing existing designs. This meeting involves free thinking with absolutely no rules. • Production meeting—the absolute opposite of the brainstorm meeting, where the aim is to put structure around the crazy ideas and define the how to, why, and when. These two meetings continue throughout the development of any application. If you have heard stories of Jobs discarding finished concepts at the very last minute, you understand why the team operates in this manner. It’s part of their corporate DNA of gruelling perfection. But the balance does shift away from free thinking and more toward a production mind set as the application progresses—even while they keep the door open for creative thought at the latest stages. • Pony meetings. These meetings are scheduled every two weeks with the internal clients to educate the decision-makers on the design directions being explored and influence their perception of what the final product should be. They’re called “pony” meetings because they correspond to Lapp’s description of the experience of senior managers dispensing their wisdom and wants to the development team when discussing the early specifications for the product. Challenge Employees to grow: Management in Apple challenge employees by giving them harder tasks that were a little beyond their capabilities. Apple focuses on developing their employees, and giving them the skills they need to rise up within the company. This is a kind of intrinsic motivation. Employees Freedom to own and improve the products: At Apple Inc., if an employee is using a product and finds an issue that bothered them, they had the freedom to go in and fix it without having to deal with layers of bureaucracy to get approval. Deadlines are Crucial: Apple’s culture inhibits absolute deadlines, and they are never missed. Deadlines are so important for executing projects, production and launching of a product. This has helped the company in being uptight to market trend and changes. In terms of quality, employees don’t ship things that are not of ‘Apple Quality’ even if that means cutting something that didn’t make it in time. Disregard Competition to an extent: The culture of Apple focuses more on its goals for its own products, rather than comparing itself to competitors and trying to outdo them in the same levels. Employees don’t focus on what competition is doing, they’re driven to innovate and come up with products that challenges status quo. Work Hard, Play Hard: Apple puts a huge emphasis on work and life balance. Employees work hard, but are also allowed to enjoy their time on their own. From excellent health care to generous office holidays around Christmas and Thanksgiving, employees love the type of environment the company provides for them. Passionate Employees: The people who work at Apple really want to be at Apple. Enthusiasm is a key element in the hiring process, management looks for people who are really passionate about the company, its products, and its overall style and mission. KEY ISSUES Communication & Trust In spite of increased competition, Apple has been successful in developing a flexible and robust culture to meet the demands of a turbulent demanding market. Over the years, Apple has developed a culture that is personal with employees empowered to express themselves and make decisions. This has been a key contributor to the success of Apple “the flatter the hierarchical structure, the better is it to communicate”. Communication within Apple is a good example of best practice particularly as Steve Jobs worked hard to remove bureaucratic barriers by moving away from the ‘old style’ hierarchical structure. However, a culture where structure and formalities are unclear could breed a challenging environment in which to communicate. Organisations are built on individuals coming together in order to achieve a mission or vision. The organisation's structure will determine how these individuals will communicate. By the management team of Apple focussing strongly on technical ability and not embedding communication and trust Apple is removing the mechanism on how individuals will relate to one another. The result is a person centred culture that has by its very being created its own power culture within the organisation that communicates via a ‘grapevine’ approach. The limited numbers of executives who make the decisions hold the power and are responsible for communication. Without formal structure the grapevine will be the main carrier of information with strong personalities developing their own informal leadership groups. This will be a key issue that Apple needs to address. This gap has resulted in a clear of lack of trust between managers, staff and piers. A number of staff have stated that a culture of paranoia and bullying has developed. This unfortunately is no more visible than the incident in which a Chinese employee took his own life after allegedly being accused of disclosing sensitive information. It is accepted that the more diverse an organisation becomes the more time is required to develop good methods of communication. Commercial sensitivity is expected within any organisation, and it is customary to have a tighter rein on communication when launching a new product. Unlike other organisations Apple is more demanding around commercial confidentiality, mandating through its employment contract that staff work within a ‘no blogging’ policy. Unfortunately the underlying message staff read from this is ‘you’re not trusted’. Leadership & Development Leadership is far more than just good management, and the impact of a good leader should not be underestimated. However leadership does not always come from the top. Leadership should involve stimulating and driving innovation and change enabling others to embrace change by managing external pressures into achievable goals (French, Bell & Zawacki, 1994). Apple has a number of managers who have developed through the ranks because of their technical abilities. This has been seen as a success to the organisation as it encourages development although it is evident that these technical skills are often a world apart from managerial or leadership experience. It is for this reason that the strategic approach to leadership and development within Apple is critical. Steve Jobs has openly stated that he values technical skills, innovation and natural talent above all else, demonstrating by his actions that he doesn’t share the same values for formality and leadership. Naturally a risk to any innovative organisation is that it (the organisation) becomes rigid and inflexible, therefore the balance between managing skills and leadership skills should be carefully approached. Recommendations To address the areas identified above Apple would need to ensure that communication channels are open and managed. Of course commercial confidentiality is expected from all staff members; however it seems strange that Apple has such a strong negative focus on blogging. If an employee was going to share company secrets, would they really use Facebook or Twitter! Lack of trust coupled with silo working and increased competition is having a significant impact on the culture of Apple to the organisations detriment. Studies show that employee trust is a key factor that affects the effectiveness and efficiency of an organisation and is a key driver of good communication. A trusting relationship with employees is critical in facilitating change or embedding the values and objectives within an organisation. Lack of trust does result in the behaviour of some staff to be counterproductive. Loss of loyalty could result in a high staff turnover or poor attendance, ultimately impacting on the organisations performance. In order for Apple to maintain its competitive edge it must ensure that the culture of communication and trust is reviewed. Both trust and communication cannot be built overnight, nor can it be addressed unless it is lead from the top. Within Apple the executive team would need to display more trust and be willing to communicate and share. The first area in which to focus is to question whether the approach currently taken by Apple to secure commercial confidentiality is working or actually fuelling the lack of trust culture' It is critical that the organisation focuses on how to develop a robust approach to communication from both a top down and lateral perspective in order to compensate for poor information flows and to manage the impact of trust within the organisation. While lateral communication can be effective in doing this, it is not without its challenges. Cultural behaviour such as rivalry and competition would still prove challenging to the organisation. Apple would need to ensure that its communication strategy incorporated all approaches to meet the varying cultural demands of the organisation while ensuring its management team are prepared with the necessary skills and knowledge to take this forward. 1. Pay scales and reward packages would need to be standardised and not dependent on location or employment status. It is not saying that these shouldn’t be varied in order to stimulate promotion and competition, however it is critical to develop a reward strategy that articulates what the reward elements will be and more importantly what an employee needs to deliver. Any reward strategy should be based on clear objectives, and communicated widely. In the case of Apple, the reward system seems to be at the discretion of the manager, which again is left to individual interpretation and deemed merely as a personal development reward for the staff involved. 2. Performance Reviews Apple’s desire to create greatness has resulted in retaining staff despite the organisation openly promoting the work hard play hard mentality. Long hours are rewarded with company perks such as healthcare, training and product discount. However the bigger concern is why are staff working these long hours' Naturally any working environment at some point or other would require individuals to work longer hours than normal, however Apple has created a culture where this is expected. Apple would need to identify if an underlying problem is occurring. This can only be carried out via performance management approaches such as personal development plans, appraisals and 1-2-1s. When approaching performance reviews Apple would need to identify clearly the issues that it considers to be of most importance. The challenge with performance appraisals is that too many stakeholders have differing views of what is expected from them. The human trait to judge can create significant challenges in relation to motivational, ethical and legal problems in the workplace. More importantly without a structured appraisal system, there is little chance of ensuring that agreed outcomes are achieved. Acknowledging these challenges Apple should approach their performance reviews with a view of gaining insight into its employees roles and responsibilities, therefore it is imperative that the creation of personal development plans should not become laborious or bureaucratic. This could stifle creativity and impact on the organisations culture to breed innovation. The balance on achieving and implementing appropriate performance reviews is critical. The true aim of the performance review should be to develop staff and improve the output of the organisation. Apple would need to have a clear understanding on what type of performance approach is required and what outcome is expected. It is easy for an organisation to get the performance approach wrong resulting in staff not sharing concerns or voicing their opinions due to the risk of the information being used against them. Management would need to adopt a culture in supporting staff in raising concerns, with an internal analysis of why this culture has arisen. This could only be built on trust between manager and subordinate. The answers although vast and wide would come down to two outcomes; do staff members have too much work' Therefore is a review of the role needed or is there a sense of insecurity within the organisation to the point where staff feels they need to work long hours in order to demonstrate their worth' In approaching performance reviews Apple would need to ensure all reviews are regular, structured and defined between management and subordinates, in which the employees’ performance is examined and discussed. Two-way communication is key and should be encouraged with a view of both parties identifying weaknesses and strengths as well as opportunities for improvement and skills development. Whilst formal reporting lines will help to tackle poor communication and open up better dialogue, the culture to openly communicate should be encouraged through the executive team who should actively and openly encourage all types of communication. CONCLUSION The firm’s culture can be regarded as an emergent culture as it was never well-defined but emerged from the way its founders led the company. Therefore, the individualistic culture continually changed as the company metamorphosed into a corporate giant and its values adapted to the new situation although the core values stayed more or less the same. So Apple’s culture today can be described as a culture which focuses on innovation and creativity and has definitely become an adaptive culture. Its focus on innovation and initiative can make it adapt and respond to the environment and market trend in the fast-moving computer industry. In an independent survey carried out, many employees within Apple welcomed the informal approach with the vast majority working well under the leadership guise of individuality and sole responsibility. This approach has been seen as a success and has led to Apple being seen as an innovator. Many including Steve Jobs believe that this approach has been the driver of delivering greatness. Nevertheless, there are also certain drawbacks to this form of culture that is primarily based on innovation. The belief that Apple can innovate its way through a downturn seems to be inconsistent with economic reality as economically successful product firms don’t only need innovation but also appropriate execution, consistency, and follow though (support innovation with solid sales force and a strategy for customer service). It is human nature to desire order, and vast amounts of people do need to have order and structure with common procedures and shared outcomes. Rightly or wrongly the organisation has created a culture that ‘ignores’ formality and process in its search for greatness. There is no doubt that Apple has succeeded with Steve Jobs a true inspirational leader, this can be clearly seen through the achievements of the organisation to date. On initial analysis the organisational culture under the helm of Jobs has identified the importance of individuals as social beings with the leadership approach of informality, individuality and innovation creating an organisational culture viewed by many as a utopia. This approach has resulted in Apple Inc topping the fortune Magazine’s “Most Admired companies” list for the last 2 years. Harnessing the full potential of workers in order to gain a competitive advantage requires a strong focus on human resources management underpinned by a clear and effective organisational culture. This is evident within Apple. It is often said that organisations profitability is based on a strong culture where all employees share the same views and objectives Deal and Kennedy (1982). There is a mixture of opinions on what a good organisational culture is and whether or not Jobs has been successful in creating this within Apple. The organisational culture of Apple is as widespread and as varied as the individuals employed within it with the founders of the organisation, Stephen Wozniak, Ronald Wayne and Steven Jobs responsible for imprinting their leadership style on the organisation. To conclude, Edgar Schein (1993) identifies the value of dealing with aspects of organisations that seem irrational, frustrating, and intractable. He writes, "The bottom line for leaders is that if they do not become conscious of the cultures in which they are embedded, those cultures will manage them." (Schein 375). This could be said of Apple. Identified within the coursework are a number of areas within the organisations culture that are having both a positive and detrimental effect on the organisation. Although challenging, these detrimental cultures are not impossible to change. What is required from the organisation is the time to allow these changes to take place and the willingness by all parties to accept that change needs to happen. REFERENCES Mc Shane, S. and Travaglione, T. (2005) Organisational Behaviour on the Pacific Rim. McGraw-Hill page 89-200 Robbins and Stephen, P. (2005) Organisational Behaviour (22nd Edition). Pearson Education page 101-167 Toffler, B. (1991) Doing Ethics: An approach to Business Ethics consulting. Moral Education Forum page 14-20 Handy, C. (1993) Understanding Organisations. Penguin Edgar, S. (1993) Organisational Culture and Leadership. Harcourt College Publishers Hendry, C. (1995) Human Resources Management and Strategic Approach to Employment. Butterworth-Heinemann Ltd Apple Inc. Corporate Culture: The Good, The Bad and The Ugly. From www.icmrindia.org Accessed 14-09-2011 The History of Apple Inc. from www.brighthub.com. Accessed 30-09-2011 Apple Inc. Strategic Audit by Valentin Ilieve, Andreas Lindinger and Guenther Poetler from www.andreaslindinger.net