CHANGE MANAGEMENT

IN APPLE, INC.

PRESENTED BY MEMBERS OF GROUP 4

GROUP MEMBERS:

Ashraf Qatarneh 21058751

Kanokwan Saengthongpinij 20265788

Monica Izarra 21030880

Said Rahim 21049852

Pavan Kumar Gunturi 21062317

Sanjoy Karmakar 21059447

Ijeoma Njoku 21050315

APPLE, INC.
 1. INTRODUCTION

Why the need for change?

• The need for strategic change arises from the formulation and
implementation of the strategy that underpins the direction and activity of
an organisation (Senior, 2002).

• Alterations to the strategic direction and activity of an organisation may

therefore necessitate changes to its structure, systems, culture,
managerial approach and technology (Lynch, 2005)

2. AIMS AND OBJECTIVES

• Understand how strategies were planned, implemented, performed and

restructured to comply to organisational objectives.

• Focus on organisational changes that have occurred in APPLE INC. in the

last 5 years in terms of:

- Structure

- Technology

- Strategic approach

- Leadership

- Culture

3. CORPORATE BACKGROUND

• Apple is engaged in the design, development and marketing of personal

computers (PC) and related software, peripherals, network solutions,
portable digital music players, and related accessories.

• The company’s portfolio of offerings comprises Mac computing systems,

iPods, iPhones, and servers.

• The company’s software applications include Mac OS, iLife, iWork, and
internet applications like

• Safari and QuickTime, among others.

• The company mainly operates in the US. It is head quartered in Cupertino,

California and employs 32,000 employees (www.apple.com).

APPLE’s MISSION STATEMENT:

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 “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”.

TOOLS FOR ANALYSIS ON APPLE, INC.

Political Factors:

• Apple has outsourced its components, product manufacturing,

transportation and logistics management to many third-party
manufactures to lower operating costs.

• Many of these third-party manufactures are located outside the U.S.A. For
example, the final assembly of the company's products is being performed
in countries such as Cork, Ireland, Korea, China and Czech Republic.

• The manufacturing or logistics in these countries might be interrupted by

political events. Once it is delayed by such political events, Apple may not
be able to deliver its products to its customers on time. Such events will
damage the credit image of the company to both consumers and retailers
(Buxton, 2007).

Economic Factors:

• The rise of oil and food prices has led inflation to the world economy while
the consumers' income has not been much reduced. Since consumers are
also facing a greater risk of being unemployed, it will push them to spend
less in consuming luxuries goods, like update their current computer or to
buy a new iPhone. This will have a quite big influence on Apple's retail
business (Ranchhod & Gurau, 2007).

Social Factors:

• A variety of regulations and laws may adversely affect the company's

financial condition and operating results by requiring a safe disposal or
recycling of Apple's products (Datamonitor report, 2009).

• Particularly, there are now various countries within Europe and Asia,
certain Canadian provinces and certain states within the U.S adopting
such regulations against companies like Apple Inc. Certain products of the
company actually face health issues because of the design problem
(Rogers, 2002).

• It is reported that the improper use of iPod may lead to hearing loss for
users (Rogers, 2002).

APPLE, INC. Page | 3

 Technology Factors:

• The market for PC, portable music player, mobile phone and other
consumer electronic products are subject to not only huge competition but
also fast technological changes.

• The short product life, frequent introduction of new products and the
continual improvement in product performance and design require the
company to continually invest in research and development in order to
stay on top of the industry (Ramaswamy & Namakumari, 2007).

• Apple's control over the entire production procedures of personal

computer and the continual innovation on iPod and iPhone is a clear
advantage over its competitors (www.apple.com).

• On the other hand, the increasing cost on R&D causes Apple to spend its
capital reserve compared with its competitors. For example, Dell uses
Microsoft's operating system in all of its products while Apple installs its
own brand operating system (Pump up the volume, 2008).

Environmental Factors:

• Apple calculates it’s recycling according to a measurement done by Dell, it

started off 2005 with 6.1%. It improved during 2006 and 2007 reaching
worldwide recycling rate of 41.9% in 2008. Apple’s aim is to have a
recycling rate of 50% by 2010.

• Toxic substance removal: During 2006, Apple’s MacBook pro included

many materials that were not as environmental as Apple aims. Yet in 2008
all its products including iPod, iPhone and Mac were free from PVC, BFR
and Lead.

• Therefore, Apple manufactured “Green Products” with less

environmentally harmful substances. To do so, Apple was not waiting for
any legislation that ban any of these harmful substances (Lynch, 2005).

Legal Factors:

• In many countries such as South Africa, Greece, Singapore, Slovakia, and

Italy; Apple iPhone is sold unlocked because of rules and regulations in the
country itself that is against Apple’s laws of providing locked phones
through certain carriers and mobile providers.

5. PRODUCTS’ TRANSFORMATIONAL CHANGES:

iPOD:

Strategy changes in terms of:

- Design evolution
- Technological advances
APPLE, INC. Page | 4
 - Marketing and advertisement
iPHONE:
Strategy changes in terms of:
- Design evolution
- Technological advances
- Marketing and advertisement

APPLE NEW TABLET: New product introduced by APPLE, INC. in 2009.

6. ONGOING CHANGES

Transformation Evolution

- Apple always thinks ahead over competitors

Scale Type 2: Incremental adjustment

- Expanding sales territory

- Improved production process technology

- Shifting the emphasis among products

7. STRATEGIC APPROACH

Miles & Snow (1984)

Mintzberg et al (1998)

• Design
• Planning
• Positioning

8. TRANSFORMATIONAL LEADERSHIP

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 Brown & Eisenhart (1995) identified 3 key characteristics of successful
managers:

• Provide clear responsibility and priorities with extensive communication

and freedom to improvise.

• Enhance learning of future possibilities by experimenting with ideas.

• Link current projects to the future with predictable intervals.

Change management literature emphasizes the importance of the leader in

enacting change. In organizations where change occurs frequently, the
leadership style that will produce the best results is one that can motivate
followers to identify with the leader’s vision of the future and to sacrifice self-
interests for the benefit of the organization as a whole. Known as
transformational leadership, the leader may also be charismatic and somebody
whom the workforce trusts and whom it emotionally identifies.

Transformational leaders engage in a process that includes recognizing the need

for change, creating a new vision and then institutionalizing the change.
Therefore by creating a vision and properly communicating group goals,
effective leaders can change the basic values, beliefs and attitudes of followers,
so that they become willing to perform beyond the minimum levels required by
the organization.

When applied to an organization operating in an industry of continuous change,

charisma and the ability to provide intellectual stimulation to the workforce
become very important. Whether this approach is successful and accepted
throughout the organization will depend upon the abilities of each individual
leader.

It is believed that organizations will be more receptive to transformational

leadership approaches when adaptation as opposed to efficiency is the goal.

Change champions

Transformational leaders can successfully change how things are done in an

organization by displaying appropriate behaviours at each stage along the way.
When there is a realization that old ways of operating are no longer going to
work, a good leader will be able to develop a new and appealing vision of the
future, and this vision will be able to provide a strategic and motivational focus.
Providing a clear statement about the purpose of the organization can inspire
workers and lead to greater commitment. Leaders may provide a vision of the
future that is attractive and engaging rather than simply disagreeing with what
has been done in the past (for example, Steve Jobs’ vision of the Apple Mac PC).

Specialists in this area suggest that the leader must be a “change champion”
who can assemble and motivate a group in order to “pull” followers towards a
new vision. Once the vision is developed, the implementation of change can be
done by the setting of challenging goals for employees.

APPLE, INC. Page | 6

 The leader must work at getting large numbers of people involved in the process
of change in order to avoid resistance. The skill becomes the creation of a
system or organizational culture that is neither too rigid (over-control) nor too
chaotic (lack of strong leadership).

There is no doubt that the importance of successfully enacting change is a

critical issue facing today’s managers. The Steve Jobs example illustrates how,
as time moves on, ideals and approaches that were once frowned upon can
become the catalysts that save an organization. In his book The Second Coming
of Steve Jobs, Alan Deutschman highlights how many colleagues and co-workers
see Jobs as a “role model” and “icon.” One colleague even described Jobs as one
of the most charismatic people in the computer industry. These facts go a long
way to support the idea that a particular leadership style can be one of the most
important factors in successfully motivating followers and turning round the
fortunes of an organization.

9. CULTURE:

10. IMPACT CHANGE

• New brand image.

• Quick response to customer demands
• Helps to align existing resources within the organization
• It allows for organisational assessment
• Change can be implemented without negatively effecting the day to day
running of business
• Organizational effectiveness and efficiency
• Time management

12. CONCLUSIONS
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 Does Apple, Inc. have a succession plan?

11. RECOMMENDATIONS

Apple's history of innovation and its motto of "thinking differently" will be the key
advantages for keeping current Apple users and for enticing new consumers.
Originality has been a hallmark for Apple from the very beginning, and it is that
sense of style that enables Apple to prosper in this ever growing and changing
market.

Apple's recent successes and expansion have led Apple's CEO Steve Jobs to
predict that Apple's market share will double from 5 percent to 95 percent in the
near future (www.apple.com).

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