CASE STUDY

CASE SITUATION
APPLES MYSTIQUE: THE DARK SIDE

Submitted to: Mohammed shartaj (Faculty of Indian ethos for management) (MDIMS; SHEETANGOLI)

Submitted by: Rafeek.j (3rd SEM MBA student MDIMS) Submission on:16\10\2011

CASE TITLE : APPLES MYSTIQUE

CASE INTRODUCTION
Over the years, the US-based technology giant Apple Inc. (Apple) have earned the reputation for its innovative products and for its ability to create a huge amount of hype surrounding its new product launches. In 2009, the company also attracted criticism for failing to disclose vital information regarding CEO Steve Jobs' health to its shareholders. Some critics opined that this strict insistence on absolute secrecy was robbing Apple of its humanity and has also become morally and ethically untenable. While some appreciated Apple's culture saying that it valued creative people, others felt that it was dysfunctional from a management standpoint and was largely influenced by its CEO Steve Jobs (Jobs) who had a very quirky style. The case study discussing some matters related to the company APPLE ,Worlds most reputed company .Its U S based technology giant Apple Inc.They are producing most innovative product and also they getting more surrounding when new product is launching. Some experts telling the success behind that is some mystique surrounding of the company Apple. They are maintaining a veil of secrecy. This secrecy has become the one of the key element of Apples

corporate culture. Some critics content is that Apples culture has become a dark side. The case also focuses on the career opportunities and employability security, rules, veil of secrcy, corporate culture and benefits offered to the employees by the company to all over the world. The case explains how Apple fostered a culture of secrecy. The demand for absolute secrecy and insistence on control were infused into the company culture right from the beginning. The various dysfunctional aspects of Apple's culture which led the company to the brink of disaster are also discussed

BACKGROUND NOTE
Apple was founded by Steve Jobs, Stephen Gary Wozniak (Wozniak), and Ronald Gerald Wayne (Wayne) on 1st April 1976. Working at Jobs' garage they designed a personal computer (PC) that was sold as Apple I. The company was incorporated as Apple Computer, Inc. on January 3, 1977

CASE FACTS
The case talks about at Apple had to run their own show and work in a challenging and creative environment. Apple adopted a style that was not too formal or hierarchical and a more results-driven approach which worked best for them. Apple is one of the coolest companies in the world, with some of the most iconic products ever seen in a geeks hand or

desk. But Apple is notorious for secrecy. Its obvious that Apple is a company that enjoys brand loyalty because of their corporate culture and veil of secrecy. Its brand success is not a result of dumb luck or forces beyond Apples control, it is part of a well thought out plan to deliver strong products and create an Apple culture. Find out more about these & other strategies that Apple employs to achieve its tremendous consumer loyalty. Apples product complements and complete, each other. Most Mac programs are produced by Apple. This sort control over the entire user process ,from HW to SW strengthen customer loyalty , Apple user encourages current new customers to get excited about what it has offer. The success of behind of this company is they are maintaining a separate corporate culture and also keeping their own veil of secrecy. This veil of secrecy is one of the most important factors to project the companys corporate culture. But some critics contend that the Apples culture also has some dark side.ie, Apple imposing harsh sanctions when the people who works in Apple violating the rules or disclosing the strategy or idea of the upcoming products. And also some criticizers are also telling they are not keeping humanity and also have become morally and ethically untenable.

THE MYSTIQUE SURROUNDING APPLE AND ITS PRODUCTS

Experts felt that Apple had achieved unprecedented success with its products not solely due to its technological prowess, but because of its culture that fostered innovation.

It was considered the most innovative company and also topped the list of 'Most admired companies in 2008 and 2009 (Refer to Exhibit III for a list of world's most admired companies; to Exhibit IV for industry rankings of Apple; and to Exhibit V for the list of top 10 most innovative companies in the world)

CASE ANALYSIS
Experts felt that Apple had achieved unprecedented success with its products not solely due to its technological prowess, but because of its culture that fostered innovation. Apple using their own innovative idea and technology and also they are maintaining a separate corporate culture. so, they are getting more surroundings .Apple has earned the reputation as one of the most admired brands and envied companies in the world. For the third year in a row Apple ranked as the company. They are strictly ordering to obey the rules of the company. If anybody is violating the rules of the company, they are imposing harsh sanctions .The main impotent thing is that the success of behind these company is not only this type of sanctions. Some criticizers are telling this type of culture becomes the out of humanity and unethical like that. But its a companys rule. Behind the success of this company there have some other reasons. The company Apple, the top level authority accepting or giving the opportunity to the lower level employees to become a part of decision making. Apple, they are self motivating the employees not illegally giving the work

load or strict rules towards the employees. The self motivated employees are working together unitely.Some of the critics opined that they are going out of humanity, morally and ethically untenable like that. But actually all business firms are doing business for the profit,maintaine in the market, long life, reputation etc.its a part of business .All firms are keeping their own rules , culture. Apple Inc has received criticism for the use of sweat shop labor, environmental destruction, and unethical business practices.

QUESTION & ANSWERS

 STUDY HOW APPLE MAINTAINED A CULTURE OF AT THE COMPANY? Apple placed a number of constraints on its employees and developers. The implications of not complying were severe as Apple was known to take strict action against employees who violated the company's edict on not sharing information. Employees were fired for leaking news to outsiders. Some analysts felt that maintaining a culture of secrecy provided Apple with a competitive edge. It served as a vital component in the company's advertising strategy. Experts were of the view that Apple benefited by being secretive about its products. Withholding information about upcoming products

built more anticipation and buzzes and generated a lot of excitement around product launches. Originally, the Apple culture is not that of the typical 70's company that is riddled with corporate rigidities. Thus, stiffness and regulation is just not on the list of policies that are set in place. This somehow reflects the casual and free atmosphere in the Apple headquarters. Apple is also very permissive in terms of dress codes, in fact they have none, has flexible working periods and the hierarchy of roles is blurred. This also created an atmosphere that encouraged geeks to work hard and not the count the time they gave to Apple. There is a collective intensity and enthusiasm to bring out the best products possible to outwit competition. It is said that the management issues in Apple revolved around how to make employees stop working and remind them that they have families and live outside of the Apple headquarters. However, it is said that things have changed within Apple. Along with the rise in its fortunes, it also began to take the form of a regular corporate environ. Some degree of control and regulations were introduced and in return, employees began to count time rendered as they are slowly being replaced with new ones as the hard core Apple originals retired or left the company for good. The changes in the chief executive, each of them have differing ideas on how Apple should be run, also led to changes in the organizational culture. Thus, some of the original character of Apple that made them the most admired company in the States was somehow lost. But Apple never lost touch of its reputation for nurturing individuality and

excellence among its people, especially upon the return of Steve Jobs as chief executive. Another thing that is clearly Apple is its secrecy. Surely, they are a bunch of people that is unhappy to share technology secrets, even to its employees, as rumors have it. Every upcoming Apple product is always shrouded in secrecy prior to the formal. The culture of Apple was based on an ideal that self-motivated individuals will work harder if they do not have a boss micromanaging every action. The unique structure of Apple had allowed it to grow and react more quickly to changes 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 initially grew fast, because decisions were made at the lowest possible level. Corporate headquarters made policy and oversaw all activities, but the local employees made the day-to-day decisions on the ground in countries all over the world. This type of top-down philosophy allowed for quick responsiveness and resolutions to situations without involving the corporate headquarters, thus avoiding corporate red tape .Organizational Structure .The organizational structure of Apple was almost non-existent and focused on placing decision making in the hands of the people in the field. Apple was doing incredibly well and had gotten the attention of many people because the company worked well and was very responsive to change.  UNDERSTAND WHY THIS CULTURE MAINTAINED AT APPLE , WHICH SUPPOSEDLY GAVE APPLE A COMPETITIVE EDGE, HAVE ALSO ATTRACTED CRITICISM FOR THE COMPANY?

Apple placed a number of constraints on its employees and developers. The implications of not complying were severe as Apple was known to take strict action against employees who violated the company's edict on not sharing information. Employees were fired for leaking news to outsiders. Some analysts felt that maintaining a culture of secrecy provided Apple with a competitive edge. It served as a vital component in the company's advertising strategy. Experts were of the view that Apple benefited by being secretive about its products. Withholding information about upcoming products built more anticipation and buzzes and generated a lot of excitement around product launches. In order to stand out in todays world, brands must engage people differently. The most successful brands recognize that they are more than just brands: they are cultural icons. Apple had this figured out a long time ago, and its brand loyalty ratings and market cap prove the point. It's hard to imagine that a company as sophisticated and innovative as Apple would not have a long-term business and brand strategy mapped out with the same level of attention to detail they put in to their product development. Every moment of engagement with the brand has been carefully thought through, to ensure the product experience is as good as it can be. That all stems from a clearly defined brand culture and vision, the hallmarks the DNA, if you like - of the most successful and valuable companies at any time in the past, present or the future. It's no accident that the companies we generally admire most in the world share this inherent - but carefully cultivated - quality.

Experts felt that Apple had achieved unprecedented success with its products not solely due to its technological prowess, but because of its culture that fostered innovation. As Apple was mainly into innovation, the company's policy was to keep things confidential. Secrecy was built into the corporate culture and the company always maintained tight control over information... Many experts praised Apple's corporate culture. They felt that like many other top companies, Apple focused on nurturing a culture that valued creative people in good times and bad. They said that the culture at Apple was deeply associated with Jobs. However, not all were impressed by Apple's corporate culture. Some felt that there were certain aspects of Apple's culture that were dysfunctional. Analysts felt that Apple had a laidback work culture which was dysfunctional from a management standpoint. Apple placed a number of constraints on its employees and developers. The implications of not complying were severe as Apple was known to take strict action against employees who violated the company's edict on not sharing information. Employees were fired for leaking news to outsiders.  DISCUSS WHETHER THE APPLES ACTIONS WERE ETHICAL

Although Apple has consistently won first place as the Worlds Most Admired Company, it has experienced several ethical issues within recent years. These issues could have a profound effect on the companys future success. Apples

sterling reputation could easily be damaged by serious misconduct or a failure to address risks appropriately. One issue requiring consistent oversight is product quality. Apples brand hinges upon product quality, so mistakes can create serious ethical dilemmas. In the fast-paced electronics industry, where several new products are introduced every year, mistakes can become hard to detect before product introduction. After Apple introduced the iPhone 4, consumers began to complain of reception problems. The problems were caused by antenna interference that occurred when users held the phone a certain way. Public relations experts have criticized Apple for appearing to minimize the problem rather than reacting quickly to remedy it. After Consumer Reports would not endorse the product, Apple provided free bumpers and cases for a certain period of time that resolved the reception problems. This product issue did not stop millions of consumers from purchasing the iPhone 4, but it does reiterate the great care Apple must take regarding product quality. Consumers view product quality as inseparable from Apple. Hence, a mishap in this area could damage the brands strength. Privacy is another major concern for Apple Inc. In 2011 Apple and Google disclosed that certain features on the cell phones they sell collect data on the phones locations. Consumers and government officials saw this as an infringement on user privacy. The companies announced that users have the option to disable these features on their phones. This was not entirely true for Apple as some of its phones continued to collect location information even after users had disabled the feature. Apple attributed this to a glitch that it remedied with new

software. Both Google and Apple defend their data-collection mechanisms, but many government officials disagree. The government is considering passing legislation on mobile privacy, actions which could have profound effects on Apple and other electronics companies. Intellectual property theft is a key concern at Apple, an issue that the company aggressively pursues. Apple is serious about keeping its proprietary information a secret to prevent other companies from stealing its ideas. This has led to many lawsuits between Apple and other technology firms. In 1982 Apple filed a lawsuit against Franklin Computer Corporation that highly impacted intellectual property laws. Apple alleged that Franklin was illegally formatting copies of Apple IIs operating system and ROM so that they would run on Franklin computers. Franklins lawyers argued that portions of computer programs were not subject to copyright law. At first the courts sided with Franklin, but the verdict was later overturned. The courts eventually determined that codes and programs are protected under copyright law. This law has provided technology companies with more extensive intellectual property protections. Another notable case was Apples lawsuit against Microsoft after Apple had licensed technology to Microsoft. When Microsoft released Windows 2.0, Apple claimed that the licensing agreement was only for Windows 1.0 and that Microsofts Windows had the look and feel of Apples Macintosh graphic interface system (GUI). The courts ruled in favor of Microsoft, deciding that the license did not cover the look and feel of Apples Macintosh GUI. Although there were similarities between the two, the courts ruled that Windows did

not violate copyright law or the licensing agreement simply by resembling Macintosh systems. Two other lawsuits involved more serious ethical issues on Apples part. One involved Apples use of the domain name iTunes.co.uk. The domain name had already been registered by Ben Cohen in 2000, who used the name to re-direct users to other sites. Cohen eventually used the domain name to redirect users to the Napster site, a direct competitor of Apple. Apple attempted to purchase the domain name from Cohen, but when negotiations failed the company appealed to UK registry Nominet. Usually, whoever registers the domain name first gets the rights to that name. However, the mediator in the case determined that Cohen abused his registration rights and took unfair advantage of Apple. Apple won the right to use the domain name, which led to complaints that the big company (Apple) was being favored at the expense of smaller companies. Companies are under heavy pressure to find the lowest-cost providers and typically are free to look globally to find them. While they often have guidelines for things such as green practices, bribery and child labor, there tend to be few in regard to enforcement. Companies tend to know who violates these guidelines, but often adopt a "dont ask, dont tell" stance with these suppliers to optimize margins and assure profits. The problem isnt that these practices go on, but that their existence and the related risks arent properly assessed against the savings that these low cost suppliers provide. In short, while the benefits, largely financial, of working with

these suppliers are well understood, the risks arent -- and this leads to lopsided decisions that dont take these risks into account. This should raise the risk for non-compliance unacceptably high. However, I wonder whether it might be wiser to simply avoid areas where these practices are common, so that political pressure is put where it needs to be, on effective government enforcement. Apple has tried to ensure that its employees and those with which they work display appropriate conduct in all situations. It bases its success on creating innovative, high-quality products and services and on demonstrating integrity in every business interaction. According to Apple, four main principles contribute to integrity: honesty, respect, confidentiality, and compliance. To more thoroughly detail these principles, Apple has drafted a code of business conduct that applies to all its operations, including those overseas. It has also made available on its website more specific policies regarding corporate governance, director conflict of interest, and guidelines on reporting questionable conduct. Additionally, Apple provides employees with a Business Conduct Helpline that they can use to report misconduct to Apples Audit and Finance Committee. Many of Apples product components are manufactured in countries with low labor costs. The potential for misconduct is high due to differing labor standards and less direct oversight. As a result, Apple makes each of its suppliers sign its Supplier Code of Conduct and performs factory audits to ensure compliance. Apple may refuse to do additional business with suppliers who refuse to comply with Apples

standards. To emphasize its commitment toward responsible supplier conduct, Apple releases an annual Apple Supplier Responsibility Report that explains its supplier expectations as well as its audit conclusions and corrective actions the company will take against factories where violations have occurred. So apple did all the action in an ethical way or it used ethics properly in their business.

 DISCUSS WHETHER THERE SHOULD BE A CHANGE IN THE COMPANYS POLICY IN THIS REGARD ? Apple appears optimistic about its future. The company has created a cult following of consumers who are intensely loyal to Apple products. Apples products or services are meant to offer superior solutions to those of competitors. Apple emerged as one of the most powerful brands in the world mainly because of its innovative products and good user experience. In order to continue being innovative and to maintain a competitive edge, Apple should leave its history of secrecy behind and become more open, experts said. The company should follow its competitors who were increasingly taking advantage of social media tools to strengthen their brands and to connect directly with consumers. In every field, there will be competitors and also be criticizers .its usual. According to the company Apple is a one of the most powerful and developed firm. So, competitors actions and also the criticizers opinion is usual matter like any other

company in India. Its a fact that each and every company keeping their own structure and policies. Its up to that company only. So, in my opinion that, its a strategy of Apple for maintaining and making competitive advantages in the world. Users are giving the good result to the Apples products. So no need to change the companys policy. In the last decade, Apple has excelled at keeping pace with the quickly evolving industry of computers and consumer electronics. Its diversification, collaborative corporate culture, and product evangelism propelled it to heights that could not have been envisioned when Jobs and Wozniak sold their first computer kit in 1976. The company shows no signs of stopping its momentum, while consumers have shown no signs of reducing their admiration for Apple.

CONCLUSION
The case study Apples Mystique : dark side discussed about the veil of secrecy , corporate culture, company policy ,Ethics , Monitoring, privacy, competitive edge, public relations, and dark side of Apple. In this case study discussed about so many factors. Some of them are good for all. But also there have criticizers opinion. Some analysts felt that maintaining a culture of secrecy provided Apple with a competitive edge. It served as a vital component in the company's advertising strategy. Experts were of the view that Apple benefited by being secretive about its products. Withholding information about upcoming products built more anticipation and buzzes and generated a lot of excitement around product launches need. One coin will have two sides. Likewise, each and every thing will have two sides. if

one may be good. But also have negative opinion. It is usual facts. So, no need to change the policy of the company. In the last decade, Apple has excelled at keeping pace with the quickly evolving industry of computers and consumer electronics. Its diversification, collaborative corporate culture, and product evangelism propelled it to heights that could not have been envisioned when Jobs and Wozniak sold their first computer kit in 1976. The company shows no signs of stopping its momentum, while consumers have shown no signs of reducing their admiration for Apple.