ROYAL UNIVERSITY
COLLEGE
SALES MANAGEMENT GROUP
ASSIGNMENT
NAME AND ID (MM2)
1. Dagmawi Zeleke 0454/11
2. Robel Elias 0521 /11
3. Tewodros Tufa 0501/11
4. Rahel Gizaw 0529/11
5. Meaza Bogale 0588/11
6. Eleni Chane 0581/11
7. Betelhem Yohannis 0536/11
Table of Contents
Contents
The Firm.......................................................................................................1
1. Planning..................................................................................................2
1.1 Current Strategy.......................................................................................................... 3
1.2 Past Strategies and Implications..................................................................................3
2 Organizing..............................................................................................4
2.1 Organizational Structure.............................................................................................4
2.1.1 Pros and Cons of the Organizational Structure.........................................................................4
1.1. Organizational Culture...............................................................................................5
3 Leading...................................................................................................6
3.1 Apple Inc. Leaders......................................................................................................6
3.2 Leadership Approach..................................................................................................7
4 Controlling..............................................................................................8
4.1 Controlling Mechanisms...........................................................................................8
References................................................................................................10
The Firm
Technology, in these days, has a major impa ct on the lives of people worldwide
(Tar, 2013). All modern societies rely on it significantly and the advances that
have oc curred in the last decades have changed the way that peop le live,
react and communicate (Tar, 2013). Apple Company, nowadays Apple Inc.,
has stunned and kept the world under its grasp in the last half of the century,
by changing an industry radically (Linzmayer, 2004). From 1976, when the
company was launched, until now, the technological advances and the
products manufa ctured, have brought about a new generation of goods and
services on the hands of the general public (Linzmayer, 2004).
Stephen Gary ‘Steve’ Wozniak and Steven Paul ‘Steve’ Jobs co -founded the
Apple Company in 1976, when they introduced the first
Apple I computer (Isaacson, 2012) . A few years later,
the organization was incorporated , and in 1980 went
public with a value per share of the amount of $22, a
record Initial Public Offering, IPO, since Ford entered the
Figure 1. Apple Computer I
stock market (Nair and Quay, 2012). Afterwards, in 1984 the
Macintosh computer was introduced, which led the way in the mass business
sector of the graphical client interfa ce (Cusumano, 2008)
Conversely, even though, it was a success , a year later, in 1985, Steve Jobs was
overthrown from the corporation , due to the great cost of the device
(Isaacson, 2012) . But, in 1997 he was re -esta blished in his position as CEO and
directed Apple to its forer unner position in the industry of digital devices
(Isaacson, 2012).
Currently, the organization creates and promotes smart cell phones and
devices, personal computers and transferable music pla yers (Apple Inc., 2015).
The main products manufactured are iPhones, iPads, Apple Watches, iMa cs
and Apple TVs (Apple Inc., 2015). Moreover, the firm is in charge of the iCloud
service, the iOS and OS X operating systems and man y more patents (Apple
Inc., 2015). Furthermore, a range of correlated services, accessories, software
and applications are marketed, as well as, a variety of retail Apple stores
opera ting worldwide (Apple Inc., 2015). Lastly, it is a California based
1
organization which not only vends to consumers but also to businesses of all
sizes and government al instruments (Apple Inc., 2015 ).
1. Planning
Planning, being one of the four primary functions of management , can be
characterized as the ability of a manager to distinguish and select f itting
objectives and courses of action , so as to fulfill them (Jones and George, 2014,
Schermerhorn, 2010 ). The significance of planning is crucial, it sets the direction
the organizations want to follow , and is the basis where the other managerial
tasks and functions are built upon (Schermerhorn, 2010). The p rocedure
followed consists of three stages (Jones and George, 2014).
Firstly, is establishing the corporation’s main objectives , where you strive to form
a competitive advantage. The second stage is evaluating the existing situation
and devising an appropriate strategy based on the goals chosen . Lastly, the
third stage is applying the strategy by allotting capital and duties (Jones and
George, 2014).
1.1 Current Strategy
Apple Inc. is focused on conveying t he best client experience to thei r
customers through their creative equipment, programming and benefits
(Apple Inc., 2015) . The organization incorporates , constructing and growing its
own retail an d online stores and its related circ ulation system to viably obtain
more clients and offer extensive deals and post -sales support experience
(Apple Inc., 2014) .
It has a ccomplished its remarkable performance through viabl y actualizing an
unusual system: differentiation through innovation with concurrent serious
degrees of efficiency, resulting in the most reduced expenses in its industry
(Loizos, 2013). Yet, when companies endeavor to utilize both of these
strategies, in the long -term, they get “stuck in the middle” , as, it is not feasible
to differentiate a product at low cost (Jones and George, 2014) . Nonethel ess,
this combination, called quantum strategy, is the key to success of the firm
since producing i nnovative products enabled them to charge premium prices.
Furthermore, by reducing the cost of production and outsourcing a low -cost
strateg y is attainable ( Loizos, 2013).
1.2 Past Strategies and Implications
In 2001 inertia had ensued in Apple Inc., a loss of, approximately 6% of turnover
was reported and the sal es had decreased (Ashcroft, 2012). In order to capsize
the situation a number of options was discussed , eventually though, music was
chosen , since it was evident that it was beneficial by two basic strategy analysis
tools, market grow th rate and market share, best identified by employing BCG
Matrix (Aschroft, 2012, Schermerhorn, 2010). The iPod was launched within an
industry where no key competitor exi sted and, moreover, the trend for storing
music within digital devices was in full swing (Ashcroft, 2012, Lynch, 2012) . Its
distribution was a chieved by multiple med iums, such as the online and retail
Apple stores but also through retailers around the world leading to full customer
experience (Apple Inc., 2015, Ashcroft, 2012, Lynch,2012).
Once, the company entered the music industry by forming alliances with the
major record companies their market segmentation started to change
dramatically, roughly, 74% of sales in 2000 were to businesses and professional
markets but by 2011, approximately, 75% of sales were transferred in the
personal user and education markets (Ashcroft, 2012, Lynch, 2012).
In 2007, the company introduced the iPhone , just one year later they launched
the upgraded iPhone 3G and ea ch year after that a new, high quality gadget
was unveiled including the iPad line (Ashcroft, 2012, Lynch, 2012). This incessant
product development caused the “cannibalization” (Ashcroft, 2012, p.13) of
the previ ous editions, however, kept them a step ahead from their competition
(Apple Inc., 2015, Ashcroft, 2012, Lynch, 2012).
2 Organizing
AP Organizational structures are results of organizing process. They provide a
clear portrayal of responsibilities and roles, relationships and lines of authority.
(Jones and George, 201 2) "By reviewing an organization’s structure, a manager
will be able to determine which human, financial, and technical resources are
available, how they should be allocated, and which resources are la cking. "
(Pathfinder, 2010, p.1) .
An unconventional and unique organization al chart with Timothy Cook at its
centre.
2.1 Organizational Structure
In Apple’s case, the organizational structure is in a hierarchical system. Its
organizational structure contains rudiments from other organizational structures
and has enabled the maintenance and sustainment of their leadership style.
Now, under Tim Cook’s leadership, Apple has undergone some small c hanges
in its organizational structure to match the market and industry demands.
(Meyer, 2015)
2.1.1 Pros and Cons of the Organizational Structure
Pro: Enables a strong control over the corporation. Top leaders of Apple are
authorized to control everything going on in the organization and through
function -b ased and product grouping, it certifies that Cook and Senior Vice
Presidents control all organizational processes (Meyer, 2015)
Con: The limited flexibility of the organizational structure. The structure foils lower
levels of the chart from rea cting flexibly to business matters. Furthermore, they
cannot do rapid changes because everything has to be run by Cook's office.
(Meyer, 2015)
1.1. Organizational Culture
"Organizational Culture is the shared set of beliefs, expectations, values and
norms that influence how members of an organization relate to one another
and cooperate to a chieve organizational goals" (Jones and George, 2012, p.
319).
In Apple’s case, the following characteristics cement its organizational culture
are:
Top-notch excellence: Apple aims to employ people that are the best at what
they do. Brilliance is accentuated as a crucial element of success, particularly
when designin g and producing products. Nothing short of excellent is
accepted and anyone whose performance does not meet the expectations
is fired without hesitation (Meyer, 2015)
Creativity: Creativity is a valuable asset at Apple, especially for employees who
work in designing and developing products. Furthermore, this feature has
served helpful in problem -solving and when determining what the consumers
want (Meyer, 2015).
Innovation: Innovation highly emphasizes in their organizational structure.
Apple is applauded for its innovative spirit in the business and constantly
encourages its employees to come up with inventive, original and contributive
ideas on product design and production (Meyer, 2015).
Secrecy: Secrecy is an important part of their organizational culture because
it shields the company from thievery of information or espionage. Every
employee at App le agrees to a non -disclosure agreement that prevents them
from spreading informatio n (Meyer, 2015).
Moderate combativeness: This feature was highly linked with Steve Job's way
of leading. Steve Jobs even used to provoke his employees just to see whether
they had what it took to be a part of Apple. Today, under Tim Cook, it is
practiced but in a more abated manner (Meyer, 2015).
3 Leading
According to Prentice (2004, p. 102), “the accomplishment of
a goal through the direction of human assistants” is how
leading is outlined. Moreover, recognizing and
comprehending individual motivations , and enrolling
employee involvement in a fashion that personal needs
and interests are integrated to the corporation’s
objectives , should be aims of a fruitful leader (Prentice,
2004).
Ea ch manager has a different approa ch and style in the
manner they attempt to guide workers and associates (Jones and George,
2015). Consequently , there are three main types of leader ship approach ( Rauf,
2014, Schermerhorn, 2010). Firstly, there is autocratic , where managers keep
authority and information within their absolute control and act in a command
and control manner , which would be more efficient in a crisis condition (Rauf,
2014, Scermerhorn, 2010) . Secondly, the laissez -faire style , represents managers
who let the employees make decisions by themselves without having any
control over them ( Rauf, 2014, Schermerhorn, 2010). Lastly, when managers
encourage personnel to contribute in the decision making process and assist
them a cquire k nowledge and know -how, they are considered democratic
(Schermerhorn, 2010). For example, in order to manage the marketing
department , the last two approaches could be more beneficial (Rauf, 2014).
3.1 Apple Inc. Leaders
Apple Inc. has witnessed t he leadershi p styles of five individuals since 1976 that
it was created (Nair and Quay, 2012). When Steve Jobs was overthrown from
the company in 1985 , he was, already, not the company’s CEO for the duration
of two years (Nair and Quay, 2012). However, that caused a “ power struggle”
(Nair and Quay, 2012, p. 21) between the two men, thus being one of the
reasons Jobs departed from the firm (Nair and Qauy,2012).
Therefore , from 1983 to 1993 the company’s CEO was John Sc ulley, a Pepsi
sales and marketing executive (Isaacson, 2012), w ho even though managed
to pull the corporation through the economic crisis in the USA , in the 80s,
effectively, with a stock market price up by 75%,
afterwards, was replaced by Michael Splinder (Nair and
Quay, 2012). Moreover, Sculley had to compete the
major rival that was Microsoft at that time which was a
futile endeavour (Nair and Quay, 2012). As a result, in 1996
he, too, was dismissed in favour of Gil Amelio(Nair and
Quay, 2012). Gil Amelio, tried to transform the company
by implementing new programmes and instigating
numerous dismissals (Nair and Quay, 2012). Nonetheless,
in 1997, Steve Jobs was reinstated as the firm’s CEO, who
initiated the change in the g adget technology we have
today (Isaacson, 2012). Unfortunately, he passed away in
2011 and Tim Cook is in charge for the company until
today (Tar, 2013).
3.2 Leadership Approach
Steve Jobs was the CEO who revolutionized the organization from its core , after
he retook control in 1997 (Isaacson, 2012). His leadership style is characterized
as an integration of all three types depending on the circumstances, since he
was a visionary leader (Kutsar et al, 2014, Rauf, 2014, Nair and Quay, 2012).
When he returned he focused and simplified the procedures in the production
process but also, took into consideration the creative proposals of his
subordinates, giving them the freedom to conceive innovative ideas
(Isaacson, 2012).
On the other hand, John Sculley’s approa ch is considered more autocratic
(Nair and Quay, 2012). Unfortunately, even though he was an exemplar choice
for the firm at that time he did not manage t o fa ce the comp etition effectively
(Nair and Quay, 2012). Whereas, Michael Splinder was a strong advocator of
expanding globally but was dismissed early (Yoffie and Baldwin, 2015).
Following that, Gil Amelio’s stay was brief as well but his influence was great
(Nair and Quay, 2012). The style he favored was autocratic and systematic, he
sa cked a number of employees and recommended strategies that promoted
them in the Internet and audiovisual fields (Nair and Quay, 2012).
When Tim Cook took over in 2011, an amount of Apple’s staff quit their jobs
because they could not imagine the firm without its visionary leader (Nair and
Quay, 2012). However, the company continues to prosper financially, the
revenues between 2011 and 2014 increased by 70% while the stock market
price at the same time frame doubled (Yoffie and Baldwin, 2015). Moreover,
his leadership method is thought to be autocratic by some but democratic by
others, since, innovative devices such as Apple Watch and Apple Pay continue
to be produced this i ntegration of styles is considered effective in the
organization (Yoffie and Baldwin, 2015, Nair and Quay, 2012).
4 Controlling
The controlling function of management is the most important because here
you see the results of the three afore mentioned functions: planning, organizing
and leading. In the controlling process, managers keep a close eye on people
and their performance of the job, and then assemble and interpret the
information and make any corrective changes that need to be made. N othing
is guaranteed to go as planned, so plans must be adjusted and improved to
ensure fut ure success. (Schermerhorn, 2010 ).
4.1 Controlling Mechanisms
The first step to con trolling process involves set a quantitative evaluation
process on the execution o f future objectives. Apple's current goals are
constructing and growing their retail and online stores, operating systems and
innovative products.
The second step is measuring the measurement of the current performance of
the objective. Their performance standards are assessed by the following
criteria:
1. Revenue per Square Foot - productivity of Apple Stores (Rowland, 2015)
2. Product Units per Time - productivity of Apple suppliers and supply chain
3. Milestone per Time - productivity of Apple employees in product
development (Rowland, 2015)
On the third step, they make a comparison of the current performance and
execution of the goals opposed to the criteria (Jones and George, 2015,
Schermerhorn, 2010). If the outcome is positive managers may change the
assessment criteria making them more adaptable to more challenging
situations. Moreover, a bonus may be given to celebrate the successfulness of
the end eavors (Jones and George, 2015 ). However, if the performance does
not meet the standards, the n corrective steps may be followed, for instance, if
the Apple retail stores do not procure enough revenue, then the managers
should research the problems and act upon them (Jones and George, 2015).
Lastly, the fourth step includes the exact corrective me asures the firm might use
(Schermerhorn, 2010). If a negative outcome occurs in the long -term,
managers may decide upon altering the whole infrastructure of the firm (Jones
and Geo rge, 2015, Schermerhorn, 2010).
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