Organizational Analysis and Leadership Evaluation: Apple Inc

Organizational Analysis and Leadership Evaluation: Apple Inc. Through carrying out organizational as well as leadership analysis and assessment, it is possible to determine some of the needs, including informational, that an organization could be requiring for its smooth running and operation. This analysis and evaluation is so significant for firms because it makes it possible for the management to carry out to effectively undertake planning activities. This paper seeks to explore in detail the whole aspect of organizational analysis and leadership evaluation, and in particular refer to Apple Inc. by examining its existing organizational structure, and assessing the different management theories that are being adopted at the firm. The paper will also discuss in detail about leadership theories and styles at the company, as well as determine the company’s strength, weaknesses, opportunities, and threats that arise from the external environment where the company operates.

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ORGANIZATIONAL ANALYSIS AND LEADERSHIP EVALUATION 2 A strategy alternative will be identified and discussed at the end of the paper to explain how the company can effectively operate in the highly competitive industry.

Part I: Organizational Management Assessment The Chief Executive Officer at Apple Inc. is the senior most ranked employee of the organization who overly oversees the entire organizational operations. To assist the CEO in his or her operations are a group of managers, each of whom are charged with the responsibility of heading their respective divisions. In total, the company has 14 separate divisions which are marketing, legal affairs, iPhone software management, Mac hardware engineering, as well as industrial design.

Others include the human resources, sales, global communication, operations, retail management, software engineering, American and Asian regional markets, and the Chief Finance Office. The main responsibility of the divisional heads to ensure that daily operations within the divisions continue smoothly as planned. The divisions are further staffed with employees bearing the necessary skills and credentials to enable each one of them attain their pre-planned objectives and missions. These employees are assessed and their performance capabilities analyzed by the human resource department prior to their hiring at the organization (Mallin & Finkle, 2011).

Management Theories The overall management at Apple has adopted quite a number of management theories to help in the effective management of the company; The Scientific Management Theory Scientific Management Theory practices as proposed by Fredrick Taylor have been adopted by the management at Apple Inc. in various measures. According to Taylor, workers need to be systematically trained rather than basing the decision to hire them on personal judgments. The rule of thumb, according to this theory, should

ORGANIZATIONAL ANALYSIS AND LEADERSHIP EVALUATION 3 be abolished and instead actual time need to be observed by workers, as well as the distribution of workload among all workers of the organization. The management should play their role of ensuring that instructions are provided to the workers so as to enable them to perform their roles and duties effectively. Apple has particularly been able to achieve greater performance through the use of this theory because the management guides workers to maximize their performances for the achievement of the organizational goals and objectives. Through training, workers have managed to improve on their overall performances and skills hence also improving the general output of the company (Bell & Martin, 2012).

Administrative Theory The administrative theory was proposed by Henri Fayol and its practices have equally been adopted by the management at Apple Inc. According to Fayol, a company’s management is charged with the main responsibility of ensuring that they forecast the company’s general position in the future, and effectively plan, coordinate, organize, as well as command the workers in order to control the organization. At Apple, each divisional heads forecast the future of their respective department and plan well in advance to ensure that their set objectives are met.

Each of the five roles proposed by Fayol is adhered to by the managers in pursuance of success, the kind of which has already been posted by the company in subsequent years of its operation (Wren, Bedeian & Breeze, 2002).

This approach is particularly appropriate for the operation and general running of Apple because it has enabled the company to strongly and effectively compete in the industry with other rival firms. Through carrying out future forecasts, the company puts strategic measures in place that in turn optimizes its general performance even when business conditions appear to be unfavorable.

ORGANIZATIONAL ANALYSIS AND LEADERSHIP EVALUATION 4 Behavioral Theory This theory’s proposals and practices as advanced by Elton Mayo are adopted in the management at Apple Inc. According to Mayo, an organization’s overall performance can be effectively improved if the management observes positive response, and if encouragement of workers and observing of proper communication by the management is attained. As opposed to Douglas McGregor’s theory X proposals, Mayo believes that workers are not lazy and therefore it is not important to closely monitor them if good results have to be achieved. Instead, the management only needs to ensure that the working environment is conducive for all the workers to perform at their best (Flores & Utley, 2000).

McGregor’s theory Y proposals thus perfectly matches with Mayo’s theory in the sense that workers’ ambitions can be motivated even further provided the working environment is favorable to all the workers. In essence, Apple’s exemplary performances can actually be attributed to the fact that the company’s management has created an enabling working environment to its employees, a fact that has seen each of the employees produce their best in return. There is proper communication within the company, and the workers are constantly encouraged to increase their overall output both for their own good, and that of their company in general (Carson, 2005).

Part II: Leadership Evaluation Several leadership theories have also been adopted by the management at Apple Inc. for the effective operation of the company. Thus, the following discussion explores all the theories in practice at the firm; Transformational Theory

ORGANIZATIONAL ANALYSIS AND LEADERSHIP EVALUATION 5 This theory as advanced by McGregor Burns bases its argument on the belief that leaders and those who follow them can only move forward and attain their objective the moment they decide and agree to engage each other and support their course. This can perfectly be achieved through a process that mutually targets to uplift their overall motivation and morality. In this regard, therefore, both the leader and the followers are important players who should participate in setting out their ultimate success, as well as determine the perfect means of achieving it. In particular, transformational kind of leadership is a process that mainly aims at raising the values of the followers as well as their loyalty to their leader. This happens through maintaining focus on continued improvement (Martin & Epitropaki, 2001).

This theory is particularly present at Apple Inc. through the identification of the company’s overall objective and mission. As such, leaders at the company ensure that everybody on board, including other leaders and their followers become part and parcel of the entire leadership process. Ideologically, the mission and vision at Apple Inc. binds both the leaders and the followers together towards propelling the organization forwards. This cooperation has significantly enabled Apple as a company to identify its main potential that in essence has driven it ahead of all its competitors. The transformational leadership at the company has enabled leaders to view their followers as key players in the organization whose contributions are very vital in helping the company to achieve its objectives. Consequently, the empowering of followers and motivating them has been given priority such that their inner potential has fully been exploited to enable them achieve the set missions, as well as realize their individual visions.

Apple clearly and genuinely identifies and enriches the values of its follower, who in this case are the workers. Conversely, the employees at the company are in

ORGANIZATIONAL ANALYSIS AND LEADERSHIP EVALUATION 6 a position to identify the requisite process and anticipate for better results in the long run. The collaboration that is obviously present at Apple between the leaders who are the managers and the followers or workers has been realized as a result of the presence of transformational leadership. In other words, the presence of transformational leadership at Apple has made all the important stakeholders, that is, the followers and leaders to become engines of propulsion that have generally enabled the company realize better results very fast.

As Burn’s transformational leadership theory strongly emphasizes on continued improvement, it is evident that Apple has maintained this emphasis throughout its existence to enable it achieve its objectives. The leadership has seen the importance of understanding prevailing performance at the firm and has consequently drawn out ways to aimed at achieving better results. The focus on higher purpose at Apple has significantly underlined the need for change in the company and has set both the leader and follower as key agents of change. The perfect conduit that the transformational theory has created at the company has enabled new visions to be identified, as well as created a perfect environment that allows for its collective pursuance for purposes of creating some corporate sense of advancement. It is evident that the transformational leaders at Apple have sought to create a culture within the company where improvement is the basis of all activities and achievements (Kezar, 2009).

Situational Leadership Theory Situational theory of leadership particularly bases on the interaction between the degree of guidance as well as direction that a leader provides, the degree of socio-emotional support that a leader offers, and the degree of readiness exhibited by followers while undertaking a specific task. The readiness on the part of followers

ORGANIZATIONAL ANALYSIS AND LEADERSHIP EVALUATION 7 refers to the ability and extent of willingness to execute and accomplish a given task.

This leadership theory is evidently present in Apple where subordinate readiness is exhibited through their technical skills and ability, and through their overall selfconfidence in the abilities they posses. This employee readiness at Apple is reflected by the independence capacity of action while at work.

According to the arguments advanced by the situational theory of leadership, leaders have four different combinations of behaviors that make them uniquely suitable for varied levels of readiness among their followers. In essence, Apple realizes that its subordinates may be at different levels of readiness at any given time and therefore it is important that the leaders at the company understand how effectively they can handle the situation. Thus, the leaders apply different combinations of their leadership styles that would effectively relate with the readiness level of their followers. The leaders adopt a high structure-low consideration type of leadership when they discover that their followers are exhibiting low readiness levels, and adopt a high structure-high consideration kind of leadership when their followers exhibit moderately low levels of readiness. For followers exhibiting moderately high readiness levels, the leaders adopt a low structure-high consideration kind of leadership while followers exhibiting high levels of readiness, the leaders effectively adopt a low structure-low consideration kind of leadership style (Klein et al., 2011).

The leaders at Apple particularly tell their followers of their seemingly low levels of readiness when they note that that is the particular condition of their subordinates. This is aimed at to reawaken them and also remind them of their obligation and target while working at the firm. The leaders adopt selling as a perfect strategy when their followers have moderately low levels of readiness, while

ORGANIZATIONAL ANALYSIS AND LEADERSHIP EVALUATION 8 participating and delegating becomes more significant when readiness levels among workers become moderately high and high respectively. Apple’s leaders, therefore, have been equipped with strategic leadership styles that enable them handle all situations that could be arising with reference to the general preparedness and readiness of their followers. Performance at the company has been excellent because the leaders have the appropriate management skills to get the best from workers regardless of their respective levels of readiness.

The situational leaders at Apple understand how to continually balance between building relations with their followers on the one hand, and the amount or level of direction given. The leaders understand well that while the motivation and skill of their followers may not really be according to the expectations at one point in time, the situation is not bound to remain permanently as so because they often change with time. In the high dynamic environment and industry that Apple operates in, the leaders attempt to balance between high technology as well as high touch for purposes of attaining their objective. The leaders are passionate about their role at the company, are honest, they make good judgment, and communicate clearly to their followers.

The adoption of situational leadership at Apple is highly appropriate for the company given the highly dynamic business environment and industry that the firm operates in. the situational leadership skills gives the leaders and indeed the entire organization the right flexibility to adapt quickly to new styles, plans, and formations immediately the scenario changes. Both the external and internal business pressures force the objectives of the company to change, consequently putting pressure on the leaders. The situational leaders at Apple, however, are in a better position to quickly respond to these changes and put their organization within the

ORGANIZATIONAL ANALYSIS AND LEADERSHIP EVALUATION 9 right path. Newly acquired employees at Apple find it easy to fit into the organization because the leadership provides the direction that workers are required to follow and is not only centered on motivation. Once the workers begin to gain the experience and skill, the leadership gradually increases their motivation in order to ward-off against boredom owing to the repetitive nature of the task.

Possible need for a different leadership type There is need for Apple Inc. to integrate additional leadership theories to the overall culture of the organization so as to enhance chances of the firm optimizing its performance and attainment of objectives. The main reason as to why this would be necessary is because of the complex nature of the industry in which Apple operates.

Apart from ensuring that the firm succeeds in realigning its mission and vision statements with available company resources, the leadership must be able to operate in such a manner that they adjust effectively according to the conditions of the internal and external environments. Apple needs to adopt contingency theory of leadership as a perfect strategy that will enable it seal all loopholes and consequently resulting in improving and increasing the performance of individual employees, as well as the overall performance of the whole organization. As Fred Fielder proposes in this theory, the effectiveness of leaders depends on two important factors which must operate interactively. These factors include the tasks of the leader, which Fielder terms as relations motivation, and the situation’s aspects.

By adopting this approach of leadership, the leaders at Apple will be able to effectively measure the suitability of their followers in terms of their motivation to constantly focus on tasks at the organization, as well as in terms of their motivation to maintain interpersonal relationships that are mainly harmonious.

ORGANIZATIONAL ANALYSIS AND LEADERSHIP EVALUATION 10 With these results, it will be easier to determine whether a leader will be in a position to control and consequently predict the outcome of the group. In other words, a contingency approach to leadership will determine in advance whether a situation will be favorable for the attainment of deserved results or not. This depends on a number of factors which include whether the leader recognizes having relations that are cooperative with his or her subordinates, or whether standardized procedures and high structure characterizes the task beforehand and therefore demanding that adequate performance measures be considered. The final factor to be given due consideration is determining whether the level of authority of the leader is to punish or reward group members or teams of workers. The Least Preferred Coworker scale, often abbreviated as LPC, measures and indicates the leader’s task motivation, as well as his or her relations motivation (Mathiassen et al., 2007).

The contingency approach to leadership will thus enable Apple to register even higher performances after determining whether a leader has a high or low LPC. This is particularly important because the organization is bound to undergo different business environments in which case its leadership must emerge strongly to effectively and perfectly guide it through. The leaders identified as having high LPC will be effective in leading their followers during intermediate situations while low LPC leaders will particularly be effective during such times when the organization will be undergoing either favorable or unfavorable business situations.

Part III: Strategies for Improvement SWOT Analysis of Apple Inc. Strengths Apple products have a wonderful global presence that basically spans across all the continents in the world. Although the United States of America is Apple’s

ORGANIZATIONAL ANALYSIS AND LEADERSHIP EVALUATION 11 domestic market, the company derives up to 50% of its total revenues from global markets that fall outside the US. The company has particularly been able to register a balanced market presence in different global markets, including those that are considered mature as well as those considered still emerging. This strong global market presence has in turn provided it with an opportunity to register steady revenue growth each year. Between the period 2001 and 2005, Apple’s margins recorded above average industry figures, a situation that strengthened the company’s overall position in the market. This turn of events consequently increased investor confidence in the firm thereby leading to additional investment (Sako, 2011).

Weaknesses Apple’s general performance is susceptible to the risk of supply of its core components which it heavily relies on for growth. The IBM is the company’s single supplier of the all important PowerPC G5 processor, a key competent that forms part of Apple’s Power Mac, iMac, as well as the Xserve G5 products (Cusumano, 2011).

Another company, Freescale, is the only supplier that provides Apple with the G4 processor. This important component forms part of the Mac mini, eMac, and a host of other portable digital devices that are manufactured by Apple, including iPads, iPods, and the iPhone smartphones. Any difficulties experienced by these suppliers on the part of their raw materials supplies would definitely affect performance of Apple Inc. This would in turn imply that Apple’s overall profits would be negatively affected by the presence of such a scenario. This is a particularly critical weakness of the company because Apple operates in an industry where success mainly depends with the speed with which players reach the market. In other words, Apple’s competitive advantage of the above named products depends on the performance of its two main suppliers IBM and Freescale (Edwards, 2008).

ORGANIZATIONAL ANALYSIS AND LEADERSHIP EVALUATION 12 Opportunities Apple’s US market in relation to its popular MP3 players has significantly been posting positive results over the years since the inception of the gadget. For instance, the successful integration of the iTunes software to the overall functionality of the iPods pushed its market dominance in the US to reach 78% penetration levels in 2006, up from 71% in the year before. However, even as performance was souring up high in the US market, iPod’s market performances in other countries like the UK, Japan, Canada, as well as Australia and Italy remained relatively low (Tariq, Ishrat & Khan, 2011). Thus, it is evident from these past performances that Apple still has a huge capacity for growth of its iPod device in markets located outside the US. The company targets to boost its overall performance outside the domestic market by establishing additional overseas retail points, and through the likelihood of introducing into the market additional digital content to its already existing portfolio.

Additionally, the penetration of digital cameras in the US market still exceeds that of MP3 players, thus indicating that the segment has a higher future prospective market that could act as a key to growth (Koen, Bertels & Elsum, 2011).

Threats Increased competition remains to be one of the key threats to Apple’s operation in all its business areas of operation. The personal computer market and its associated peripheral products, including software, remain highly competitive as other rival firms like Dell and HP also continue to increase their market participation and performance. The rapid technological advances continuously characterize this market, thus substantially affecting price, product features, as well as performance competition in general. In particular, the personal computer market has experienced competitors dealing in Windows-based PCs aggressively reducing prices in

ORGANIZATIONAL ANALYSIS AND LEADERSHIP EVALUATION 13 anticipation of gaining substantial market share as they respond to weakening demand for personal computer products. These industry pressures that continuously push prices and gross margins downwards are a big threat to Apple’s performance as it tends to tilt market demand away from Apple’s products (Datamonitor, 2011).

Alternative Strategies for Improvement Increased Research and Development Activity The threat of price competition can effectively be addressed by Apple through an even increased activity of its research and development department. Innovations in the communication and digital devices industry are more likely to win additional market preference and growth than the aspect of price alone. In other words, consumers of communication and portable digital devices are willing to pay extra only if they can be assured that the device they are acquiring has additional features and is of superior quality. In essence, Apple’s strategy should be to maintain market leadership in as far as market leadership is concerned through increased activity in its research and development department (Loch, 2008).

Thus, the company should set aside more funds that can effectively finance the operations of its research and development function. This will lead to the integration of high quality features and functionalities to some of its already existing devices in the market. Additionally, improved activity of the research and development function will expand the product portfolio of the company so as to include additional new products and innovations to those already existing. The resultant high quality products will increase Apple’s competitive advantage in the market and will consequently fetch high margin prices compared to other rival firms that have stuck with price as their only strategic idea (Chambers, 2011).

Concentration on High-end Market Products

ORGANIZATIONAL ANALYSIS AND LEADERSHIP EVALUATION 14 Most of Apple’s rival firms in the market concentrate on the manufacture of low-end products so as to increase their competitive advantage in the market. Often, these products employ cheap technology that can easily be copied by other rival firms and hence reduce market competition in the long run. However, Apple’s strategy should be to maintain focus and concentration of high end market products and devices in order to establish a unique market niche in the industry. Apart from the fact that high-end market product is likely to register higher operational margin, often they employ high standard technology that can hardly be emulated by competitors. In this context, Apple will be locking out the industry to its own advantage by concentrating on both cost effective and highly competitive technologies whose capabilities can hardly be rivaled by competitors. Buyers will effectively associate Apple products with quality and high efficiency levels, thus making price a non issue. In other words, Apple products will uniquely stand out in the market and every buyer will work hard in order to acquire and own them (Tipton, Bharadwaj & Robertson, 2009).

Conclusion Organizational analysis and the evaluation of leadership methods adopted is a perfect way of establishing future plans of the organization and effectively achieving high performance. Apple Inc., one of the great companies of the 21 st Century has an organizational structure that recognizes the company’s CEO as the senior most personnel in the firm. The company is further divided into fourteen other divisions each of which is headed by a manger that ensures daily operations go on as planned. Different management theories are also adopted at the company, like the scientific management theory as was postulated by Fredrick Taylor. In essence, employees at the firm are systematically trained in order to ensure that they have

ORGANIZATIONAL ANALYSIS AND LEADERSHIP EVALUATION 15 high and competitive skills in their operation (Sahoo, 2012). The administrative theory is also evident in the company where managers take their time to forecast about the future and put relevant strategies in place that help the company attain its goals and objectives. Additionally, Apple also integrates Elton Mayo’s behavioral theory by virtue of its management insisting on the creation of perfect working environment in order to motivate the workers into producing their best. Several theories of leadership have also been adopted and integrated into the Apple’s culture, including the transformational leadership theory, and the situational leadership theory. However, it is important that the company also adopts the contingency leadership theory so that it may optimize its overall results and performance. One of Apple’s greatest strengths is its global presence which translates to high revenues. On the contrary, the company’s greatest weakness of dependency to sole suppliers for some key components limits the degree of its competitive force in the market. Although price competitions remain a key threat to its overall performance, the company should focus on increasing its research and development activity so as to be able to manufacture highly competitive products in the market that will consequently draw the market.

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