1. Demonstrate a critical understanding of the key tools for analysis of the internal and external environmental context within which businesses operate in order to exhibit knowledge and analyse the impact of changing and challenging environments on businesses and business functions in different sectors.
2. Critically evaluate a number of business functions and their contribution to organisational success across a range of business settings.
There are several types of changes which the organizations come across at different stages of business. Internal managerial problems, significant changes in organizational structure, technology upgrade or technological advancements etc are a major part of organizational changes (Gabriel, 2015). On the other hand, strategic changes are different from other types of change as they have an impact on each level of the company. Thus, strategic change can be described as the specific changes that are included in the firm’s strategy defined by synergy, competitive advantages, resource deployments and scope. In other words, strategic change can be said to be a way or method to change vision and objectives of the company to acquire greater business success (White et al., 2016). Implementation of strategic change requires lot of knowledge, effort and planning and thus, there are many managerial issues that arise in the process of implementation. The leaders or managers who are responsible for strategic change implementation should mainly consider employee behaviour and the organizational culture (Ali Naghibi and Baban, 2011)
The main purpose of the essay is to discuss the strategic changes that have occurred in a specific global organization and what are the impacts on the stakeholders and the organization has also been discussed. The organization chosen for detailed discussion is Apple Inc. Key areas in Apple Inc that were involved in strategic change in organization and the business functions have also been covered in the essay.
Apple Inc is an American - based leading manufacturers of world – class electronic products and computer software and was founded by Steve Jobs. Today, Apple Inc is very popular in many countries and the concept of Apple is “Imperfect makes improvement”. All the Apple products are highly innovative and Apple is known for manufacture and sales of high technological electronics (Company Overview: Apple Inc, 2014). Some of the popular Apple products are iPhones, iPad, Mac Computers etc. In order to be successful globally, Apple Inc has considered and implemented several strategic changes in their organization to achieve their business goals and objectives. The mission statement of Apple Inc clearly defines the wide range of products and services provided by the company and exhibit a unique and single core value – “Superiority”. Apple Inc aims to be the best in global markets and thus, in this way they outperform their global competitors. Considering the major changes that come in the industry, Apple Inc is highly committed to provide best quality and innovative products and computer software. Having understood the overall company’s goals and mission, it is clear that Apple Inc has undergone many strategic changes within their organization in order to constantly improve their products and meet their customer expectations and demands and also make use of latest technologies in their wide range of products. The application of “Blue Ocean Strategy” for Apple Inc is a clear win in this case (Johnson et al., 2012).
Former Apple Inc CEO and Chairman, Steve Jobs is considered to be one of the unconventional leaders in the World who showed the World the excellence of quality electronic products which are a class apart. During the era of Steve Jobs, the Apple Inc’s organizational culture was classified and defined as ‘Power Culture’. Steve Jobs was more focussed on making most of the important decision making powers and constantly challenged his subordinates to meet his expectations and ensure better performance (By and Burnes, 2013). The strategy of using power culture as the organizational culture pressurized individual employees and teams to improve performance and develop an organizational culture of high performance level (Proctor and Bicknell, 2012). The strategy of “Power Culture” was both an advantage and disadvantage to the Apple Inc. Apple Inc was capable of achieving high success level among the global competitors and global market place because of the contribution of benefits of power culture strategy. Steve Jobs possessed the visionary leadership skills and effectively used his intuition, creativity, overall competence and self – confidence as a leader in Apple Inc. In this way, Apple Inc managed to become the most valuable global company by market capitalization (Dudovskiy, 2013).
Strategic Changes Undertaken in Apple Inc and its Impact on the Organization
The era of Steve Jobs came to an end and there was a complete change in leadership in Apple Inc when Tim Cook took over the powers withheld by Steve Jobs in the year 2011. Steve Jobs departure from Apple Inc Organization from the top position created major chaos and issues for Apple Inc associated with the organizational culture (Soyka, 2013). The strategy of power culture was a major disadvantage here, as the organization has a very high tendency to experience a major performance drop as well as experience drawbacks if the leader (chairman or CEO) of the organization does not possess leadership and business competencies. High competency level, exceptional creativity level and effective business acumen has efficiently helped Steve Jobs to make Apple Inc a very successful organization in the strategic environment of power culture. There were major significant changes that were observed in Apple Inc when Tim Cook took the lead of the organization (Dudovskiy, 2013).
Under the leadership of Tim Cook, the organizational culture of Apple Inc and the business approach in global markets has entirely changed. Earlier during the leadership era of Steve Jobs, the Apple’s official website offered 14 products of Apple only. Now, the line – up has boosted to about 27 different products that are available for global customers in more than 200 different variants. It is very clear that, Tim Cook did not follow the footsteps of Steve Jobs and effectively replaced the minimalist approach used by Steve Jobs and this has helped the Apple Inc to grow extensively in the global market place (Financial Post, 2017). Apple Inc has been highly successful to sell all of their innovative products in global markets and the company has been extremely successful to maintain steady growth in their other / peripheral products such as watches and AirPods. Apple Inc has seen a very drastic growth and has occupied a very different position in global markets after the emergence of Tim Cook’s leadership skills. There was a drastic increase in revenue of Apple Inc of about 52 percent in the presence of Tim Cook’s leadership. Currently, Apple Inc has annual revenue that exceeds US $ 200 billion which was impossible under the leadership of Steve Jobs (Financial Post, 2017).
Having understood the key strategic changes that occurred in Apple Inc from past ten years, it is also very important to understand the key areas that were affected by the strategic changes within the Apple Inc Organization. Following is the detailed analysis and assessment of the key areas that were impacted by the strategic changes in the Apple Inc Organization. Also, in order to understand the effectiveness of the key strategic changes, SWOT (Strengths, Weaknesses, Opportunities and Threats) Analysis has been used.
Tim Cook not only focused on changing the strategic leadership type and Apple’s minimalist culture, but also focused to make certain significant strategic changes in the company’s marketing and sales domains to achieve high degree of success for the global organization. One of the important strategies considered by Tim Cook include his business visits to China to interact with the Chinese government officials as well as to audit Apple’s manufacturing units and factories in China. His leadership skills are so effective as now China is considered to be fastest growing sales market of Apple Inc by far and the company has been capable of generating about US $ 5.9 billion in revenue from Chinese market for a specific quarter. According to a Financial Analyst called Thomas Husson at Forrester, Tim Cook has taken strategic moves towards betterment of the global organization and recognized China to be Apple’s leading market in the world (Hoang, 2017). Tim Cook’s leadership paved off in terms of finance too and was extremely successful to diversify the core products of Apple in global market place. Part of the success (financial) of Apple Inc lies in the fact that the company manufactures a comparatively smaller – scale of products that are sold on a larger scale. Tim Cook took the decision and somewhat deviated from the strategy and introduced different variants of their products, such as – iPad called iPad Mini and in the iPhone called as iPhone 5c, which serves as comparatively cheaper alternatives to the flagship and high – end devices of Apple Inc (Edson and Beck, 2012). More significant than the increased sales, it is very impressive that Tim Cook has been capable of maintaining margins of Apple Inc very high and has also added new production costs. Steve jobs leadership was more focussed to develop their premium electronics products such as iPhone and iPad and whereas, under the leadership of Tim Cook, there has been a considerable extension to all those products and also this has improved the profitability of the company in global markets (Lashinsky, 2016).
Key Areas in Strategic Changes in Apple Inc
Also, Apple Inc has successfully increased their partnerships as well as acquisitions after the emergence of leadership of Tim Cook. Steve Jobs made certain acquisitions which were generally smaller, but, whereas, under the leadership of Tim Cook, Apple has bought about 23 new companies. Also, recently Tim Cook announced a new partnership deal with a former nemesis IBM in order to introduce a suite of enterprise apps to their Operating Systems, which is iOS (Sander, 2012). Apple’s growth has taken the form of an exponential trajectory and the sales of iPhones and other premium Apple products has gone very high and the company is under high profits. Thus, the leadership of Tim Cook and his strategic approaches to organizational changes has been extremely successful and thus, Tim Cook is said to be an excellent executor (Luckerson, 2014).
After having researched and assessed the leadership changes, organizational changes and strategic changes experienced by Apple Inc, the next step is to conduct a SWOT analysis to identify the effectiveness of the strategic change implemented in Apple Inc.
Table – 1 shows the SWOT Analysis conducted on Apple Inc.
· A clear market leader in the global marketplace
· Increased sales and thus, increased revenue
· Enhanced innovation in products and different variants released in markets
· Strategic changes implemented by Tim Cook encouraged employee giving strategy
· Increased partnerships and acquisitions
· Core products of Apple Inc were diversified in global markets for increased profitability
· Immediate actions and strategies affected the ongoing organizational culture
· The workflow in Apple Inc and the productivity of employees was slightly affected during the transition in strategic change management
· Enhanced employee engagement and improved employee giving
· Entry into new markets
· Frequent visits to China by Tim Cook made it the leading sales in the global marketplace
· Entrants of new companies into markets
· Apple designs and features are often copied by other competitor global companies, which can be a major threat to Apple Inc in the industry
Table – 1 The SWOT Analysis conducted on Apple Inc for Strategic Changes implemented in Organization
- Social: Social factors that has an impact on the business environment of Apple Inc are increasing use of social media and mobile access. Both these factors are considered as an opportunity for the Apple Company to develop its business verticals. Apple has been continuously developing strategies to exploit this opportunity via Apple Watch, iPad and iPhones. Social media is also a great opportunity for Apple Inc as the demand for Apple products are increased using this platform.
- Technological: With the significant changes in organizational culture of Apple Inc, there are drastic changes in technological aspects as the production rate and other important factors are also changed. Quality has been the major element of every Apple product and with organizational changes, quantity and variant products made significant changes in technology (Cusumano, 2008)
- Economic: Considering the organizational changes in Apple after the Steve Jobs era, there has been drastic increase in the economic factor of the company as the new leader Tim Cook managed to produce variants, wide range of products and also increased business relationships with external stakeholders .
- Environmental: Environmental changes observed in Apple Inc are similar to the ones observed in the technological aspects. Employees were not harassed at work and each one of them was provided an opportunity to showcase their talent at workplace. Significant environmental changes observed in Apple include: trend in labour rights, product energy efficiency and business sustainability.
- Political: Lastly, political changes observed in Apple Inc after strategic organizational culture changes include increased privacy regulations and also increasing telecommunications. These factors can pose a big threat as it gives rise to challenges for Apple to design products that include exchange of private information (Thao and Tsanthaiwo, 2017).
Apple Inc considers the concerns and interests of various stakeholders in its programs and policies that are a major part of strategic changes in the organization. Following are the important stakeholders who were involved in the strategic change process in the organization:
- Higher – level management – This includes the CEO, Chairperson and other high – level management individuals who have the authority to take key decisions within the organization.
- Investors – Investors are the people having majority of shares in Apple Inc and thus, their involvement in strategic change process was considered for betterment of the company
- Employees – They are the second main stakeholders involved in the strategic change process within the organization. The marketing team ,sales team, resources team etc are some of the key employees who were involved in the process (Budnikas, 2011)
After the era of Steve Jobs, Apple Inc has undergone various changes in their organizational culture, due to various strategic change moves made by the new CEO, Tim Cook. Steve Jobs believed in minimalist approach to sell the Apple Inc products which was entirely replaced by Tim Cook and made variants available in their official website. This clearly proves that the organizational culture of Apple Inc was made more effective and innovative and the organizational culture now focused on their employees and helped them to improve individual as well as product performance and innovation (Budnikas, 2011). Organizational culture of Apple Inc is now being effectively managed and the functionality of various business functions have also been managed. The acquisitions and partnership deals signed by Tim Cook are also a major part of the company’s culture to deal with different companies and people around the globe. The focus on increased profitability, variants, and employee giving, and focused employee performance etc form the major highlights of the changes observed in the organizational culture of Apple Inc (Asay, 2007).
The organizational culture of Apple depended on a perfect that self-spurred people will work harder in the event that they don't have a supervisor micromanaging each activity. The extraordinary structure of Apple had enabled it to develop and respond more rapidly to changes than its rivals (Dunphy, Griffiths and Benn, 2014). The explanation behind the snappy responsiveness is straightforward; it is substantially less demanding to kick a task off if there are just a couple of individuals to get endorsement from. Apple at first developed quick, since choices were made at the most reduced conceivable level. Corporate home office made approach and administered all exercises, however the nearby representatives settled on the everyday choices on the ground in nations everywhere throughout the world. This sort of best down theory took into account fast responsiveness and resolutions to circumstances without including the corporate headquarters (Sawayda, 2015).
Having considered the strategic changes implemented in Apple Inc and the changes that were seen in the organizational culture of the company, it is quite clear that the business functions in Apple Company are very significant. The strategic change management in Apple has significantly managed all the business functions within the organization (Rosenberg and Mosca, 2011). The sales and marketing team was highly innovative and attractive to introduce the new variants of iPad and iPhones in the global markets. Whereas, the human resources were made to quickly adapt to the new organizational culture of the most valuable company in the World. Employees of Apple Inc were a major success factor for effectively managing all the business functions in the company (England, 2015).
Strategic changes and its effective management are a part of every organization. Managing strategic changes is a very complex and challenging task for any organization. Strategic change is described to be structured approach to transition organization and the individual employees from a present state to a desired future state. From the research, assessment and analysis carried out on Apple Inc, it is quite clear that the organization has mastered the concept of strategic changes and its management and has effectively and efficiently managed to develop customer loyalty and users’ following and has introduced new technologies and new concepts and also has successfully achieved complete implementation of changes within the organization. Under the leadership of Tim Cook, Apple Inc has experienced much higher growth in the global market place, both in terms of sales and revenue. Also, the popularity of Apple Inc’s products is increased as the company has been successful to release about more than 200 variants of their products in the official website. Tim Cook considered the strategic changes in Apple Inc very seriously and ensured that Apple Inc stands apart from other leading global electronics manufacturers. All the new device features are released slowly and Apple Inc strategy is to follow their own cycle of updates release. The company do not release updates or any new device in market pre – maturely to compete in global market and catch up with the electronics industry. Also, there has been a significant change in the organizational culture of Apple Inc under the leadership of Tim Cook. Apple Inc employees are provided an opportunity to increase the performance and develop innovative features in the devices and updates released in markets. Apple Inc’s organizational culture is now well structured and they give a very high priority to make unique – innovative designs in their products and enhance their user experience. Also, it can be concluded that all the business functions of Apple Inc are functioning effectively and are in precise place and make Apple Inc a very successful and most valuable electronics manufacturing company in the World.
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