Introduction to Management (MGT101)

Company







Apple Inc.


California, USA.













ACKNOWLEDGEMENT

A very special thanks to all those who over all these years have admired the work of Apple Inc.
and Steve Jobs and have recorded it in the form of online articles, books, journals and research
papers. Without any of these, this work would have not been possible.
&
A special thanks to Farhana Ferdousi ,Assistant Professor, East West University, who assigned
us to finalize a report about management task of Apple Inc.















ABSTRACT

Apple Inc. (previously Apple Computer, Inc.) is an American multinational corporation that
designs and markets consumer electronics, computer software, and personal computers. As of
September 2011, the company operates over 300 retail stores in eleven countries, and an
online store where hardware and software products are sold. As of September 2011, Apple is
the largest publicly traded company in the world by market capitalization and the largest
technology company in the world by revenue and profit. On August 9, 2011, Apple briefly
surpassed ExxonMobil to become the world's most valuable company and surpassed them
again the following day. Established on April 1, 1976 in Cupertino, California, and
incorporated January 3, 1977, the company was previously named Apple Computer, Inc., for its
first 30 years, but removed the word "Computer" on January 9, 2007, to reflect the
company's ongoing expansion into the consumer electronics market in addition to its
traditional focus on personal computers. As of September 2010, Apple had 46,600 full time
employees and 2,800 temporary full time employees worldwide and had worldwide annual
sales of $65.23 billion. For reasons as various as its philosophy of comprehensive aesthetic
design to its distinctive advertising campaigns, Apple has established a unique reputation in the
consumer electronics industry. This includes a customer base that is devoted to the company
and its brand, particularly in the United States. Fortune magazine named Apple the most
admired company in the United States in 2008 and in the world in 2008, 2009, 2010 and 2011.
The company has also received widespread criticism for its contractors' labour,
environmental, and business practices






Corporate Management


Executives Profile

Tim Cook CEO:
Eddy Cue Senior Vice President (Internet Software & Services):
Scott Forstall Senior Vice President (iOS Software):
Jonathan Ive Senior Vice President (Industrial Design):
Ron Johnson Senior Vice President (Retail):
Bob Mansfield Senior Vice President (Mac Hardware Engineering):
Peter Oppenheimer Senior Vice President and Chief Financial Officer:
Philip W. Schiller Senior Vice President (Worldwide Product Marketing):
Bruce Sewell Senior Vice President and General Counsel:
Jeff Williams Senior Vice President (Operations):











Board of Directors

Steve Jobs Chairman of the Board:
Bill Campbell Chairman and former CEO of Intuit Corp.:
Tim Cook CEO Apple:
Millard Drexler Chairman and CEO of J. Crew:
Albert Gore Jr. Former Vice President of the United States:
Andrea Jung Chairman and CEO of Avon Products:
Arthur D. Levinson Chairman Genentech:













APPLES CORPORATE CULTURE
Apples transition from a computer to a consumer electronics company is unprecedentedand
hard to replicate. Although many can only speculate about why Apple succeeded so well, they
tend to credit Steve Jobs remarkable leadership abilities, Apples highly skilled employees, and
its strong corporate culture.
The concept of evangelism is an important component of Apples culture. Corporate evangelists
refer to people who extensively promote a corporations products. Apple even had a chief
evangelist whose job was to spread the message about Apple and gain support for its products.
However, as the name evangelism implies, the role of evangelist takes on greater meaning.
Evangelists believe strongly in the company and will spread that belief to others, who in turn
will convince other people. Therefore, evangelists are not only employees but loyal customers
as well. In this way, Apple was able to form what it refers to as a Mac cultcustomers who
are very loyal to Apples Mac computers and who will spread a positive message about Macs to
their friends and families.
Successful evangelism can only occur with dedicated, enthusiastic employees who are willing to
spread the word about Apple. When Jobs returned to Apple, he instituted two cultural changes:
he encouraged debate on ideas, and he created a vision that employees could believe in. By
implementing these two changes, employees felt that their input was important and that they
were a part of something bigger than themselves. Such feelings have created a sense of loyalty
among many at Apple.
Apple prides itself on its unique corporate culture. On its job site for corporate employees, it
ensures potential applicants that the organization has a flat structure, lacking the layers of
bureaucracy of other corporations. Apple also emphasizes that it does not adhere to normal
work environments in which employees are at their stations from 9:00 a.m. to 5:00 p.m.
Instead, Apple markets itself as a fast-paced, innovative, and collaborative environment
committed toward doing things the right way. By offering both challenges and benefits to
applicants, Apple hopes to attract those who fit best with its corporate culture.





Apple also looks for retail employees that work well in its culture. Apple wants to ensure that its
retail employees make each consumer feel welcome. Inside the Apple retailers are stations
where customers can test and experiment with the latest Apple products. Employees have
been trained to speak with customers within two minutes of them entering the store. To ensure
that its retailer employees feel motivated, Apple provides extensive training, greater
compensation than employees might receive at similar stores, and opportunities to move up to
manager, genius (an employee trained to answer the more difficult customer questions), or
creative (an employee who trains customers one-on-one or through workshops). Apple also
offers young people the chance to intern with Apple or become student representatives at their
schools.
Another benefit that Apple offers combines employee concerns with those of the environment.
In an effort to reduce its overall environmental impact, Apple offers incentives such as transit
subsidies for employees who opt to use public transportation. Its Cupertino facility is equipped
with shuttles for employees, including free bus service between the Apple headquarters and
the train station. Apples free buses are powered by bio-diesel. These incentives reduce fuel
costs for employees while simultaneously lowering emissions released into the environment.
















APPLES ETHICS
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.








ETHICAL ISSUES AT APPLE INC.
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.
PRODUCT QUALITY
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
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.




SUSTAINABILITY
Apple has taken steps to become a greener company, such as reducing its
environmental impact at its facilities. However, the company admits that the majority of its
emissions come from its products. In 2009 Apple stated that its operations contributed to 9.6
million metric tons of metric gases being released. While 3 percent came from its facilities, 97
percent came from the life cycle of its products. Since Apples success hinges on constantly
developing and launching new products, the environmental impact of its products is a serious
issue.
One practice for which some consumers have criticized Apple is planned obsolescence
pushing people to replace or upgrade their technology whenever Apple comes out with an
updated version. Since Apple is constantly releases upgraded products, this could result in older
technology being tossed aside. Apple has undertaken different approaches to this problem. The
company builds its products with materials that are suitable for recycling, it builds its products
to last, and it recycles responsibly. To encourage its customers to recycle, Apple has created a
recycling program at its stores for old iPods, mobile phones, and Macs. Consumers that trade in
their old iPods can receive a ten percent discount on a newer version. Consumers recycling old
Macs that still have value can receive gift cards. Apple partners with regional recyclers that
comply with related laws. Despite this recycling program, many consumers feel that tossing out
their old products is more convenient, particularly if they have no value. E-waste will remain a
significant issue as long as consumers continue to throw away their old electronics.
Apple has also publicly stated its achievements in reducing toxic chemicals within its
products. According to Steve Jobs, Apple has eliminated cathode-ray tubeswhich contain
leadfrom its products. Its iPods are constructed with light-emitting diodes (LEDs) rather than
fluorescent lamps, which do not contain mercury. The company has also eliminated the use of
two toxic chemicals, polyvinyl chloride and brominated flame retardants, from its products.







INTELLECTUAL PROPERTY
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.




Apple faced another trademark lawsuit from Cisco Systems in 2007. Cisco claimed that
Apple had infringed on its iPhone trademark. Cisco had owned the trademark since 2000. Apple
and Cisco had been in negotiations to discuss whether to allow Apple to use the trademark.
However, Apple walked away from the discussions. According to Cisco, the company then
opened up a front organization, Ocean Telecom Services, and filed for the iPhone trademark in
the U.S. Some stakeholders saw Apples actions as a deceptive way to get around negotiation
procedures. The lawsuit ended with both parties agreeing to use the iPhone name. However,
Apples actions in this situation remain controversial. PATENTS
With the many products Apple releases each year, it makes sense for it to protect its
technology from theft. Apples aggressiveness regarding patent protection has led it to file
lawsuits against some powerful companies. For example, the company filed a lawsuit against
Samsung, claiming that Samsung had copied the designs of its iPhone and iPad for its own
products. It also filed a lawsuit against HTC Corporation, a Taiwanese smartphone manufacturer
that makes phones for Googles Android products. Apple accuses HTC of replicating a range of
cellphone features protected under Apples patents. Although the lawsuit is directed toward
HTC, it also indirectly targets Google since it is a major client. If HTC is found guilty of patent
violation, then Googles phones could also be implicated. The ethical issue is whether Apples
claims are legitimate. Is it pursuing companies that it honestly believes infringed on its patents,
or is it simply trying to cast its competitors in a bad light so it can become the major player in
the market? Although it might seem that Apple is being too aggressive, companies that do not
set boundaries and protect their property can easily have it copied by the competition, who can
then use it to gain a competitive foothold. It is up to the courts to determine whether Apples
allegations have any validity.
Finally, a more recent lawsuit accuses Apple of patent violations. Kodak has filed a
lawsuit against Apple and Research in Motion, alleging that the companies infringed on its
patent on digital-imaging technology. In response, Apple countersued Kodak by claiming it
violated Apples patents. Unfortunately for Apple, a U.S. International Trade Commission judge
ruled in Kodaks favor in Apples lawsuit. The issue still stands regarding whether Apple
infringed on Kodaks patents. Kodak is seeking $1 billion in licensing revenue.





How Apple Innovates Despite Hierarchy

Apple is now almost the most valuable company in the world due in large to the organizations
ability to keep innovating. Year after year, Apple keeps coming out with revolutionary and
beautiful products such as the iPhone and the iPad and the iPod Nano and the list goes on and
on. Yet, Apple the Corporation seems to stick to a very strict hierarchical organization structure
filled with top secret research and projects where one employee has no idea what another one
is doing. However, if you look closer, you will find a different story

In traditional assembly line type of development, the designers start the process by designing
the product and its basic features, the developers take a look at the design and shrink it down
to what is possible, the manufacturers then figure out how to produce large quantities of this
product taking out more parts and features along the way, and then the marketing and sales
people figure out how to sell it. By the time the product goes to market, it is stripped down
from a Ferrari to a Honda Civic.

Apple, however, has a parallel production model a documented by Steven Johnson in Where
Good Ideas Come From: The Natural History of Innovation:
Apple call it concurrent or parallel production. All the groupsdesign, manufacturing,
engineering, salesmeet continuously through the product-development cycle, brainstorming,
trading ideas and solutions, strategizing over the most pressing issues, and generally keeping
the conversation open to a diverse group of perspectives. The process is noisy and involves far
more open-ended and contentious meetings than traditional production cyclesand far more
dialogue between people versed in different disciplines, with all the translation difficulties that
creates. But the results speak for themselves.

So the key to Apples success is not as it appears its hierarchal structure. Instead, the key to
Apples success is having strong cross-functional teams.



SUCCESS STORIES

The biggest success - Apple Itself

Apple has to be one of the greatest success stories of all time. The beginnings of Apple started
with Wozniak assembling a simple built computer machine. It was in the summer of 1971
Wozniak 21 and Jobs 16 were introduced to each other by a mutual friend Bill Fernandez.
Wozniak had shown Jobs his simple built computer machine and this impressed Jobs to
the point Jobs believed he could sell it for a profit. It was here they would form a strong
friendship because they not only shared a passion for computers, but because they were both
known as outcasts and for the first time they had a great understanding, admiration and
respect for each others abilities, personality and intellect. They would begin the Apple project
by selling some of their possessions: Wozniak's HP scientific calculator and Jobs' Volkswagen,
they raised $1300 and assembled their first prototypes in Jobs bedroom. When the project
became too big for the bedroom they moved the project into Jobs family's garage, it was on a
huge wooden work bench that served as their first manufacturing base. The computers were
hand built by Wozniak and first shown to the public at the Homebrew Computer club. After
selling a number of the machines Apple was established on April 1, 1976 and went public on
December 12, 1980.

So the question is how has Apple been able to maintain its great success? Apple has maintained
its great success with its ability to understand what the consumer wants before the consumer
even knows what they want; Apple effectively creates wants by their constant creative
innovation and unique design which is stylish, user friendly and affordable. They have also
been able to create a brand in the high technology world just as Chanel has in the fashion
world. People can easily recognize an apple whether it's the I-Pod, the I-Phone, the Mac Air or
the I-Pad. It has become a product that defines one's identity in how they desire to be seen by
society that is a person who is highly innovative, intelligent, stylish and apart of the in crowd.
This is pure marketing genius. This marketing genius of Apple has seen this company
outperform beyond the business world's expectations. While so many companies are struggling
to break even in the current recession Apple is getting stronger by the day.


Nine key attributes of reputation Industry
rank
Innovation 1
People management 1
Use of corporate assets 1
Social responsibility 1
Quality of management 1
Financial soundness 1
Long-term investment 1
Quality of products/services 1
Global Competiveness
2

The last three years has seen Apple's profits soar, take a look at these figures:

A profit of 8.2 Billion in 2007 followed by a profit of 11.2 Billion in 2008 and most recently a
profit of 17.2 Billion in 2009. That is more than a 100% growth in profit from 2007 to 2009.
With these profits and Apple's constant innovation, what will they think of next? My bet is
another great innovated product that we never thought we would want or need, but will end
up on our wish list.

The great success of Apple can be easily understood by looking at its current standing as
mentioned by fortune 500.


Apple stats courtesy (Fortune 500, 2011).

Apple Stats










Steve Jobs

Steve Jobs is the co-founder and CEO of Apple and formerly Pixar. Steve Jobs regularly
makes most rosters of the rich and powerful. It is surprising for a guy who takes home an
annual salary of U.S. $1. The reasons why he is on all power lists are; Apple, Next, iPod
and Pixar. Jobs is also known as the one man who could have upstaged Bill Gates.
But Jobs was as excited about innovation as Bill Gates was interested in making money.
Steve Jobs was born in Green Bay, Wisconsin to Joanne Simpson and a Syrian father
Abdulfattah Jandali (who became a political science professor). Paul and Clara Jobs of
Mountain View, Santa Clara County, California then adopted him. The writer Mona
Simpson is Jobs biological sister. In 1972, Jobs graduated from Homestead High School in
Cupertino, California and enrolled in Reed College in Portland, Oregon. One semester later he
had dropped out. But instead of going back home he hung around college and took up the
study of philosophy and foreign cultures.
Steve Jobs had a deep-seated interest in technology so he took up a job at Atari Inc. which was
a leading manufacturer of video games. He struck a friendship with fellow designer Steve
Wozniak and attended meetings of the Homebrew Computer Club with him. Wozniak and
Jobs developed a system with a toy whistle available in the Capn Crunch cereal box to make it
possible to make free long distance telephone calls. They called off the amateur venture after
someone told them of the possible legal consequences.
After saving up some money Steve Jobs took off for India in the search of
enlightenment with his friend Dan Kottke. Once he returned he convinced Wozniak to quit his
job at Hewlett Packard and join him in his venture that concerned personal computers. They
sold items like a scientific calculator to raise the seed capital.
In 1976, Jobs, then 21, and Wozniak, 26, founded Apple Computer Co. in the Jobs family garage.
The first personal computer was sold for $666.66. By 1980, Apple had already released three
improved versions of the personal computer. It had a wildly successful IPO,which made both
founders millionaires many times over. Steve Jobs had managed to rope in John Scully of Pepsi
to head the marketing function in Apple.



A tiff with the Apple board and John Scully led to the resignation of Steve Jobs. As soon as he
resigned he immersed himself in his brand new venture. Steve Jobs decided that he wanted to
change the hardware industry. The company was called NeXTStep and the new machine was
called NeXT Computer. He ploughed in more than U.S. $250 million into the company. The
machine was a commercial washout but it did help in object -oriented programming,
PostScript, and magneto-optical devices. Tim Berners-Lee developed the original World
Wide Web system at CERN on a NeXT machine. Bitterly disappointed with NeXTStep, Jobs
accepted the offer that Apple made him.
Steve Jobs also started Pixar Inc., which has gone on to produce animated movies such as Toy
Story (1995); A Bugs Life (1998); Toy Story 2 (1999); Monsters, Inc. (2001); Finding Nemo
(2003); and The Incredibles (2004). This venture has made him one of the most sought after
men in Hollywood.
Post Pixar, Steve Jobs wanted another round of revolutionizing to do. This time it was the music
industry. He introduced the iPod in 2003. Later he came up with iTunes, which was a digital
jukebox. A million and a half iPods later, the music industry still does not know whether this
invention will save it or destroy it. Apple has a great advertising track record and its Rip, Mix,
Burn campaign was another feather in its cap. Now the industry uses a Mac to make the music
and an iPod to store it.
Steve Jobs lives with his wife, Laurene Powell and their three children in Silicon Valley. He also
has a daughter, Lisa Jobs from a previous relationship. In 2004, there was a cancerous tumour
in his pancreas, which was successfully operated upon. Jobs continued to struggle with his
health, and in 2009 he underwent a successful liver transplant.
Jobs resigned as CEO of Apple in August 2011 and subsequently assumed the role of Chairman
of the Board. He is without any doubts one of the most innovative and successful entrepreneur
this world has ever seen and according to few Apple will never be the same without Jobs.







A Pictorial Demonstration Proving Steve Jobs Necessary for Apple Inc.



NOTE: The y-axis shows amount in billion ($) and the x-axis shows years.
















APPLEs VISION and MISSION

Apple is known for keeping secrets. Many employees and workers who worked for Apple were
most of the times not even aware of what was happening around them. Many of them
reported that they were not even aware of Apples upcoming products and were as much
shocked and surprised to see the product on its launch as any other ordinary person. Same
goes with Apples mission or vision statement of Apple. There has been a lot of speculation
about Apples mission statement and its vision. Although nothing can be said for sure but out of
many available with the name of Apples vision/mission statement few of them are as below:

Mission Statement:

As mentioned in Apples investors website Apples mission statement is (thus can be
considered to be the most authentic):
Apple designs Macs, the best personal computers in the world, along with OS X, iLife,
iWork, and professional software. Apple leads the digital music revolution with its iPods and
iTunes online store. Apple reinvented the mobile phone with its revolutionar y iPhone and App
Store, and has recently introduced its magical iPad which is defining the future of mobile media
and computing devices.

Another mission statement that is attached with Apple as its mission statement is:
"Apple is committed to bringing the best personal computing experience to
students, educators, creative professionals and consumers around the world through its
innovative hardware, software and internet offerings."




Vision Statement:

"Man is the creator of change in this world. As such he should be above systems and structures,
and not subordinate to them."

Explanation of vision:

Apple lives this vision through the technologies it develops for consumers and
corporations. It strives to make its customers masters of the products they have bought. Apple
doesn't simply make a statement. It lives it by ensuring that its employees understand the
vision and strive to reach it. It has put systems in place to enable smooth customer
interaction. It has put objectives in place to continuously move forward; implemented
strategies to fulfil these objectives; and ensured that the right marketing, financial and
operational structures are in place to apply the strategies. (Hamilton, 2011)













Current Standing

Business Volume


According to techcrunch.com, if you look at how Apple fares on the public markets today,
compared to other tech powerhouses, youll notice that the Cupertino computer giant is
currently valued at roughly $301 billion, which is close to the sum of the market cap of three of
its closest rivals: Microsoft (~$200.3 billion), Hewlett-Packard (~$72.8 billion) and Dell(~$29.3
billion).

Market cap is of course just one metric and arguably not even the best one to make
comparisons between companies. It is, nevertheless, a most excellent trend barometer and a
simple way to compare valuations.
Income Statement (Bar chart) of 13 weeks ending 25th July, 2011. in Millions of USD
(Quarterly Data)