Case questions:Apple inc.

Question 1: Forces for change that best help Apple keep its creative edge, and explain why. Social Factor: Changes in lifestyles and trends and customers needs. y y Apple requires new ideas and strategies in order to meet the customers needs and maintain brand loyalty. Lifestyle and trends are changing fast. Therefore, Apple must make sure its innovation up-todate with the trends in order to stay in the market.

Technological factor: New innovations and discoveries y When there is a change in technology in the organizational environment and other organizations adopt the new technology, the organizations under focus become less cost effective and its competitive position weakens. Therefore, Apple has to adopt new technology in order to compete. They may need to improvise the new technology so that Apple will become more outstanding than the other rivals. Apple may also subject for changes due to pace of technological obsolescence and advance. Changes in technology may affect the work structure and a new equilibrium has to be established.

y y

Competition factor: a) Intensity of Rivalry y Competitive forces spur change, because an organization must equal or surpass rivals to sustain a competitive advantage in efficiency, quality, innovation, or customer responsiveness. y It is quite common for a company to change its delivery process, promotional and distribution practices, pricing and product so as to respond to rival position of the competitor. y Therefore, Apple should create different style in the above practices to be unique compared to the rivals. b) Threat of Substitutes y It may lead to change initiatives that drive up the performance or price feature of the product and services dealt by the company. Globalization: y y y Apple needs the culture, customs, political and legal differences with respect to the countries they operate in. Apple must therefore be sensitive to these differences in the formulation of operational and human resource (HR) strategies for the implementation abroad. Plus, Apple needs to come out with different approach in order to attract customers abroad as well as to motivate the employees.

Internal factor: a) Sustaining creativity y The organization may need to make some changes in order to sustain its creativity and innovation. y This has created a need for knowledge workers- hiring experts or a group of young newcomers for fresh, new ideas and perspective. y Changes to the workplace environment: Provide resources to inculcate creativity or environment that is conducive for brainstorming. b) Changes in the managerial personnel y Old managers are replaced by new mangers, which necessitated because of retirement, promotion, transfer or dismissal. Each new manager brings his own ideas and way of working in the organization. The relationships, more in the organization. y The relationships, more particularly informal ones, changes because of changes in managerial personnel. Moreover, attitude of the personnel change even though there is no changes in them. The result in that an organization has to change accordingly. y Death of Steve Jobs may affect the motivation and performance of the employees. c) Nature of the work force: y The nature of work force has changed over a passage of time. Different work values have been expressed by different generations. Workers who are in the age group of 50 plus value loyalty to their employers. Workers in their mid thirties to forties are loyal to themselves only. The youngest generation of workers is loyal to their career. y These work values affect their sense of belonging to the company and hence their understanding towards the goal and performance.

Question 2: Should Apples board of directors be expecting Steve Jobs to push transformational or incremental change or both at this point in time? Why? How will this change impact Apples operation internationally?

Transformational change: Radical or frame-breaking change that results in a major and comprehensive redirection of the organization. It is usually lead from the top and creates fundamental shifts is strategies, culture, structures and even the underlying sense of purpose or mission. It is intense, highly stressful and very complex to achieve. Incremental change: Modest, frame bending change. It basically bends or nudges the existing systems and practices to better align them with emerging problems and opportunities. The intent isnt to break and remake the system, but to move it forward through continuous improvement. Common incremental changes in organizations involve evolutions in products, processes, technologies and work systems.

Apples board of directors should be expecting Steve Jobs to push incremental change in the point of time and prepare the firm if one day Jobs is no longer around to run the company. With his absence, a lot of concerns were expressed over Apples ability to stay on its creative course. Besides, Apples reputation is at its top nowadays so doing any major transformation by transformational change will be too risky to be implied and if the change did not work, it will cause the company to lose huge amount of profit and its image locally and internationally will be ruined. For all this while, the focus on international markets have been rewarding venture for Apple and international operations are significant contributor to its over-all sales growth . And if the change did not successfully achieved, it is worried that the company cannot bounce back and reforming itself like before with the absence of Steve Jobs. Incremental change will be appropriate and wiser to be implied as by going through incremental change, the company only need to adjust its existing ways to improve their performance and sales. In the process of preparing the company, Steve Jobs need to improve their strategy in marketing and others now so that it will be strong enough to hold their position in the market in the future even without him.

Question 3: Describe change strategies employed by Apple throughout its history. Consider its relationships with Microsoft and Adobe. What model of change leadership do you feel Steve Jobs embodies, and why? Change strategies throughout history: A. By using Force-coercion strategy of change: -use power base legitimacy, rewards and punishments to induce change -Apple always changed their CEO. First, it started with a pair of Stevens, then hired John Sculley and ousting Steven Jobs, the Sculley was forced out and replaced by Michael Spindler, after difficult time in 1990 Spindler was replaced with Gil Amelio the former president of National Semiconductor, lastly Jobs returned to Apple. B. By using rational persuasion strategy of change: - bringing about change through persuasion backed by special knowledge, empirical data, and rational argument. -After Jobs develops Mac, Apple gathered Project teams to work around the clock to develop the machine and its operating system, MacOS. -Apple recognized the threat after clash head-on with IBM, realized it was the time for Apple to grow up and be run in more businesslike fashion. -Apple relies on expert power by continued to rely on innovative design to remain competitive.

C. By using shared power strategy of change: -Apple engages people in collaborative process of identifying values, assumptions, and goals from which support for change will naturally emerge. -in 1993, Apple persuaded John Sculley(Pepsi-colas president) to join Apple as president. As a result, ousting Jobs from the company -collaboration with other computer manufactures that would enable it to run on intel-based machines. -Apple purchased NeXT that belongs to Jobs, unofficially Jobs returned to Apple as advisor to the president. -Alliances with its former rival Microsoft to gain mutual advantages by sharing a five-year patent cross-license for their graphical interface operating systems. -expanding their business internationally to 36 countries, became significant contributor to its overall sales growth. -however, unable to collaborate with Adobe Flash Player causing dropped in Apple share price as much as 3%.

Model of change leadership Steve Jobs embodies, why? Change leader is agent who takes leadership responsibility for changing the existing pattern of behaviour of another person or social system. Model of change leadership that Steve Jobs embodies are proactive and embraces new ideas. His views are always wide and have long term effect. He wanted to make sure that Apple Inc will have no problems in the future thus he implemented rules regarding human and labour rights, health and safety, environmental impacts, and ethics. Steven Jobs also always embraces new ideas by providing innovative designs that are up-to-date and fashionable. The latest design is iPad with multi-application that was launched in April 2010 was sold 300,000 units on the first day it was launched.

QUESTION 4 Review what the analysts are presently saying about Apple. Make a list of all of the praises and criticisms, organize them by themes and then put them in the priority order you would tackle them if taking over from Steve Jobs as Apple new CEO. In what ways can the praises and criticisms be used to create a leadership agenda for a positive change and continuous improvement ?

CRITICISM
Environmental Concerns
y

E-waste Hall of Shame Apple Computer Inc. was one of the companies included in Greenpeace Internationals E-waste Hall of Shame. Greenpeace International discovered Apple products in their visit to a Chinese scrap yard. Apple, along with IBM, Panasonic, Toshiba, and Acer, has not committed to remove chemicals from products or be responsible for the safe recycling and responsible disposal of their products. Guide to Greener Electronics Greenpeace, a Washington, D.C.-based environmental advocacy group, released its annual Guide to Greener Electronics as part of an effort to encourage electronics companies to clean up their act. The Guide ranks 14 of the leading computer and mobile technology companies on a scale of one to 10 based on criteria relating to recycling phase out of toxic chemicals and corporate responsibility issues. Apple was dead last scoring 2.7, almost a full point behind the next lowest company, Panasonic. Exporting Re-use and Abuse to Africa Basel Action Networks (BAN)--a Seattlebased international network of activists seeking to prevent the globalization of the toxic chemical crisis--report entitled The Digital Dump: Exporting Re-use and Abuse to Africa, examines the current downside to the information technology growth in the industrialized world, focusing on the environmental ramifications in Lagos, Nigeria. The study demonstrates how Nigeria, representative of developing nations, has disproportionately carried the burden of toxic cyber waste. The formal and informal dumps have leached dangerous toxins, such as dioxins, polycyclic aromatic hydrocarbons, and heavy metals, into the air and groundwater. Apple products were among those found washed up on the West African import market. iWaste More Info According to the Computer Take Back Campaign, Apple's iPod digital music player contains toxic products such as "lead and other harmful chemicals that are associated with infertility and brain damage." The organization contends that iPod's batteries are difficult to replace and Apple offers only limited options for consumers to recycle the batteries.

If we are taking over from Steve Job s as Apples new CEO, we will apply Fiedlers Contingency Model in order to control this situation. We will post an open letter on Apples Web site in response to the environmental criticism levelled at Apple in which we detail the company's plans for removing many harmful chemicals from its products and increasing recycling. Based on Fiedlers Contingency Model, good leadership depends on a match between leadership and situational demands. Leadership is part of ones personality, and therefore relatively enduring and difficult to change. Hence, leadership style must be fit to the situation. This model explains how to approach the situation.

Business Ethics
y

iPhone ad rapped as 'misleading' The Advertising Standards Authority has ruled that an advert featuring Apple's iPhone is deliberately misleading. During the ad, the iPhone is triumphed as being synonymous with the more common PC web browsing experience, saying "all the parts of the internet are on the iPhone." The iPhone, however, does not support Adobe's Flash or Sun Microsystems Java platforms, two growing forces on the web. Flash, for example, powers the hugely popular Youtube video player. iPod Suit Apple Computer was the target of five class-action lawsuits based on accusations that the companys iPod did not perform as promoted. Plaintiffs in the suit claim that the battery life of the iPod did not last as long as advertised, and are suing Apple on the grounds of false advertising, fraudulent concealment and breach of warranty. Apple Computer offered a settlement of $50 vouchers and extended service warranties. Mac sellers say computer maker cuts them out in favor of its outlets Several computer retailers that sell Mac computers filed lawsuits against Apple alleging that the company was unfairly pushing customers to patronize Apple-owned outlets. Plaintiffs argue that the claim is evidenced by ongoing problems with billing systems and service. Tom Santos of San Francisco brought forth a multimillion-dollar lawsuit accusing the computer company of unfair competition, fraud, false advertising, breach of contract and violating the federal Racketeer Influenced and Corrupt Organizations Act. Worst Boards In 2002, BusinessWeek named Apple Computer as having one of the worst board of directors. The magazine cited interlocking directorship--Steve Jobs sits on the board of directors for the Gap and the Gap CEO sits on Apple's board--and the fact that the CEO of Micro Warehouse, which accounted for nearly 2.9 percent of Apple's net sales in 2001, sits on the company's compensation committee. The magazine used criteria such as board independence and stock ownership for the listing. Apple Computer facing $40M discrimination lawsuit Former Apple employee, Dan Riccio, filed a discrimination lawsuit against the corporation in October of 2001. Riccio claimed that he was overlooked for promotions, denied stock options, and kept segregated from white colleagues because he is African American. According to

Riccio, Apple suspended and ultimately fired him for having a guest with him on the Apple campus, which had never been a problem when done by his white co-workers.
y

Apple forced to drop iPhone ad After releasing an ad boasting a "really fast" 3G iPhone model, Apple has been forced to drop the advert. The ASA backed complaints from 17 consumers who claimed the ad was misleading as to the speed of the device. The ruling stated that the ad could not be shown in the same form again.

As the CEO, in order to increase the number of customers, we should apply moral leadership. Moral leadership is ethical leadership that is always good and right. All leaders are expected to maintain high ethical standards. Moral leadership begins with personal integrity, a concept fundamental to the notion of transformational leadership. Leadership integrity means acting in an honest, credible, and consistent manner in putting ones values into action. When a leader has integrity, he or she earns the trust of customers and followers. And when followers and customers believe leaders are trustworthy, they try to behave in ways that live up to the leaders expectations and the customers will be stick to the products sold. Based on the criticism, a person in charge for the tasks should be honest for the products sold. The leaders should always remind their workers to always apply moral leadership. The leaders also must treat all the workers fairly without discrimination.

Workers Rights
y

Apple admits excessive iPod hours Upon investigation, Apple Computer found that their suppliers in China have been violating the companys supplier code of conduct. Apple reported regular workweeks in manufacturing facilities in excess of 60 hours and workers labored more than six consecutive days 25 percent of the time. However, the company found no evidence of forced labor or use of child workers. Janek Kuczkiewicz, director of human and trade union rights at the International Confederation of Free Trade Unions (ICFTU), said he was unimpressed by the report: Apple interviewed just 100 people out of the estimated 30,000 iPod workers. Justice for Janitors Campaign The Service Employees International Union (SEIU) staged a hunger strike at the Apple Computer headquarters in California to protest the treatment of its contracted janitorial workers. Apple became a prime target for the "Justice for Janitors" campaign because of its contract with Shine Building Maintenance, Inc., which allegedly exploited its workers by paying them wages below the federal minimum, requiring workers to function under exploitative conditions, and offering negligible health benefits. The SEIU claimed that most of Shines workers were Latin and Asian immigrant female immigrants, and the union argued that Apple should extend its "progressive and enlightened" employee policies to improve the lives of its contracted workers as well.

If we are to replace Steve Jobs as Apples new CEO, we will apply Hersey-Blanchard situational leadership model which explains that leaders must adjust their styles depending on the readiness of their followers to perform in a given situation. Leaders must know how able, willing and confident followers are in performing tasks. In conjunction of the problems, one should consider the work hours for the workers. The period should be rational to the ability of ordinary people. Besides, leaders must take care of their workers welfare in terms of health and finance.

PRAISES
INNOVATION 1) Goldman Sachs analyst David Bailey:"Apple continues to reinforce its emphasis on and ability to innovate at levels that separate it from other companies . The analyst pointed at Apple's innovation-focused corporate culture and due to this culture, they can easily sell their products. MANAGEMENT 2) Andrew Scott research associate with Needham & Co.: The Company enjoyed solid sales growth while maintaining profitability during an otherwise dour time for computer makers. The credit, analysts say, goes to Apple's steady management and appealing products. "Overall, Apple did a superb job operationally during the March quarter." 3) When Gore was asked regarding Apple s future, he mentioned that everyone on that management team could be CEO of a world class corporation. Albert Arnold "Al" Gore, Jr. This proved that Apples management is very outstanding. We as the CEO will be practising performance appraisal. All the praises can be used to encourage the workers to increase their performance by performance appraisal that serve both evaluation and development process. The evaluation purpose of performance appraisal focuses on their past performance and measures result against standard. Performances are documented for the records and allocating reward. The development purpose focuses on future performance. Performance goals and obstacles are identified, along with possible training and supervisory support.