English 3355 Business Team 7

Apple Inc. Communication Challenges: Case Study Analysis

Written By: Fernanda Vazquez and Alicia Venegas

The Purpose of the Case Study Analysis Apple Incorporated is a company that creates gadgets and programs that is not only accessible for the corporate world, but also for consumers to be used in the leisure of their homes. From when the company was first initiated to its present day, its products and technology have evolved to where it is known and has sales in 14 different countries. For instance, the first computer was produced in a form of a box with the monitor included and it would only process little information in a minute. Nowadays, the personal computer has revolutionized into an iPad, which has the same functions as a laptop, takes pictures, and may be used for media due to its latest operation system. Apple Incorporated not only sells its products at its own retail stores in the U.S. and across the globe, but it also has its own convenient website to purchase products or to download applications and software. Although new technology is emerging and its market segmentation is increasing internationally, a company must have strong communication with its employees. By having so, employees will feel motivated to work in teams and will not have trust issues with other coworkers. This will also contribute to new ideas and that is essential in order to gain competitive advantage among other technology companies. By having employees feeling motivated in the workplace, this will also increase company loyalty and diminish the chances of employees selling ideas to competitors. A corporation that has a corporate culture of too much secrecy will only create a culture of fear. This is one of the main problems that Apple Incorporated faces at the moment. A Brief Description of the Problem After conducting research regarding Apple, a substantial communication problem in the company is prevalent. Even though it has been known to be one of the fastest growing companies of its time, Apple has lacked communication from its high management to its lower positioned employees within the corporation. For instance, top management has given misleading information to their workers and has secrecy within the company. By the time a new product is released into the market, even Apple employees will receive information about the gadget on that day. By doing so, the company may not see an increase on sales after the employees have done research and used the product to see how it functions. In the case of Apple, employees have to go through several security doors to reach their work area and when working with a new product, security is set in high alert to prevent from spilling information to sources outside the company. A Brief Description and History of Apple Incorporated Apple Incorporated is a multinational corporation that creates electronic products such as personal computers, computer software, and digital media content. At the moment, Apples main products are the iPhone smart phone, iPad tablet computer, iPod music player and the Macintosh computer line. The founders are Steve Jobs and Steve Wozniak and they incorporated the company on January 3, 1977, in Cupertino, California. The name Apple was chosen for the

following reasons: alphabetically it would be the first name in the list of companies and Steve Jobs used to work at an Oregon apple farm, in which he had fond memories. Apple Incorporated is recognized by its product and technology worldwide. The company has opened up retail stores and its online content is available in many countries. Also, it is known to be one of the wealthiest companies in the world. Apple started building its first computers at a home garage and also using space from family and friends. In 1977, Apple I computer was the first machine to be built and sold by the company. At that time, Apple Incorporated was able to offer a monitor, an up speed system and other several features, that other electronic companies did not offer. Later in the year, Apple was able to create a home computer known as Apple II that was a success until the 1980s. Although it had its ups and downs, Apple introduced Macintosh into the market. By producing the Mac, the company was able to offer new software, such as the MacWrite and MacPaint. With the Mac success, Apple later teamed up with Adobe systems, in which they created the laser printer and Adobe page maker. By the end of the 1980s, Apple was known for producing popular products and it also created apple.com on the internet. Although Steve Jobs resigned from the company in 1986, his company NeXt was bought out from Apple in 1996 and he was rehired. Jobs became one of the managers for the company and later became CEO of Apple. With the two companies emerging, this would become the foundation of a better operating system. In the late 1990s, Apple created the Apple Store online and it later opened up the Apple retail store throughout the US. At the 1997 Macworld Expo, Steve Jobs announced its partnership with Microsoft and Internet Explorer; this would help Apple return to success. By 1998 and up to this present day, not only did Apple create the computer, it helped create a better operating system for the new line of computers and managed to help its consumers to replace their old system with the new one. By 2001, iTunes Music was available online after the iPod and its sister devices were sold to the market. By the millennium, Apple developed the iPad tablet and added the phone features to the iPod, which is known as the iPhone. With the success that this company has had throughout the years, Apple Inc. is known worldwide for its elegant technology designs and its user-friendly products. A SWOT Analysis of the Current Corporate Culture Below is an overview of considerations that Apples chief executive officer and other executive officers from the board should take into consideration. It summarizes the potential issues, but highlights the strengths of the current corporate culture. Although Apple products exude innovation and creativity, Apple has successfully managed to create a corporate ambiance of discipline and structure as well. Employees have often said they feel motivated to be productive, but sometimes the motivation itself stems from fear. The following is a brief SWOT Analysis that explains Apples corporate culture in terms of strengths, weaknesses, opportunities and threats.

1. Strengths Apple has managed to revolutionize the tech industry worldwide and has also grown sufficiently enough to expand to other countries abroad, such as Spain, France, China, Japan and Germany. Due to the fact that Apple consistently searches for top talent and the interviews are rigorous, the corporation does an effective job in employing tech savvy individuals. Potential employees must participate in a hiring seminar, group interviews, and single interviews and take a challenging test that demonstrates technical knowledge. Although the process is intimidating, Apple only hires driven and talented individuals that have successfully formed the capacity to develop products, such as the iPad, iPhone, Macintosh, etc. This strong pool of talent has made the share of apple stock that was only $2.75 in 1980 grow all the way to its all time high price of $705 in 2012. 2. Weaknesses Although Apple must maintain a level of secrecy in order to protect the company from external competition, the top level of secrecy has affected the maximization of employee work satisfaction. Certain employees have mentioned that they feel a culture of fear when working and this has caused them to feel very little trust among other employees. Shareholders have also expressed frustration regarding the limited transparency that Apple provides to the marketplace. Gene Munster, an analyst at Piper Jaffray, a growing investment bank, has mentioned that Apple does not communicate and it is similar to a black box. Shareholders might be hesitant to invest in shares of stock if they feel they that Apple is acting as a closed system to the marketplace. 3. Opportunities Last year, Apple became the most valuable company in history in terms of market capitalization, which consisted of $62 billion. In addition, the net income for that year was $13.1 billion. It is evident that Apple has managed to gain presence and financial profits across the globe. Recently, 20 percent of Apples revenue comes from China and has transformed into the second most important marketplace for Apple. In essence, the iPad was introduced three years ago, but since customers are luring away from traditional computers, the tablet market marks a substantial opportunity for growth in the future. Some speculate that an Apple TV will be a breakthrough for new market opportunities. A benefit for Apple is that it has developed significant market presence and has gained customer trust; therefore people will continue to be curious to find out what products Apple will introduce to the market in the future. 4. Threats Samsung products have been gaining momentum abroad, according to StatCounter. Compared to Apple, Samsung has been spending heavily on advertisement and have been gaining market share. Samsung invested in a twominute Super Bowl advertisement and Samsungs worldwide tablet shipments

totaled to 27.8 million units in the third quarter of 2012. Samsung offers a wide range of tablets and different screen sizes and colors, hence attracting the attention of more buyers. Unfortunately, Apples market tablet share decreased from 65.5 percent in the second quarter of 2012 to 50.4 percent in the third quarter. Apple must either consider investing more in the advertisement budget or pay close attention to products that are in the mature stage of the product cycle. Apples Communication Challenge Apple has attracted the attention of its competitors worldwide, mainly because the management strategies are unknown and the corporate culture is somewhat of a mystery to the external world. Apple is one of the most secretive companies in the world and it has been compared to an intelligence agency in the past. Although it is essential that a tech corporation or any other profitable company maintain a level of secrecy to not disclose projects, Apple has created a corporate culture of fear to some extent. In essence, when Steve Jobs was struggling with his illness, many employees were not informed. Some federal regulators and other governance experts questioned if Mr. Jobs approach to maintaining a high level of secrecy violated public disclosure laws. If employees are not allowed to work around other employees without being highly secretive, it is difficult to assume that they can properly communicate with each other. This could debunk creativity and productivity. If more employees are allowed to work on a single project together, then the creativity among a group could increase. It also diminishes the notion of individuality and lowers risk that a single employee will go out and exploit the company. Employees also have trouble communicating with the upper administrative levels. This gives employees a limited chance to ask for a raise, provide input on a project or simply raise any awareness on an issue affecting the company. An article in The New York Times, titled Apples Obsession with Secrecy Grows Stronger, provides numerous interviews with former Apple employees and they offer an insight on the corporate culture. An employee by the name of Mark Hamblin worked on the touch screen technology and left Apple approximately four years ago. Here are some of his insights: They make everyone super, super paranoid about security. I have never seen anything else like it at another company. Secrecy at Apple is not just the prevailing communications strategy; it is baked into the corporate culture. Employees working on top-secret projects must pass through a maze of security doors, swiping their badges again and again and finally entering a numeric code to reach their offices, according to one former employee who worked in such areas. Work spaces are typically monitored by security cameras. Some Apple workers in the most critical product-testing rooms must cover up devices with black cloaks when they are working on

them, and turn on a red warning light when devices are unmasked so that everyone knows to be extra-careful. Apple employees are often just as surprised about new products as everyone else. The above statement highlights the extent of security and secrecy that Hamblin felt at Apple. It demonstrates the fear that employees feel when they are working and this could become a challenge to create a corporate culture of healthy motivation. In order to increase company loyalty, employees must be able to feel engaged with work and have a positive image of its executive officers and the strategies that are being implemented. Solutions to Communication Problems The above communication problem that is rooted in the corporate culture can be resolved or diminished to a healthy level of security. First of all, there is no question that Apple must maintain a level of secrecy in order to decrease the chances of information on a project to spill in the hands of competitors. Second, Apple has done an efficient job in organizing the different departments and providing training to master the competency of challenging projects. However, there is always room for improvement. Here are some suggestions that can maximize employee work satisfaction and can have an effect on employee turnover rates in the long-run. Expand the responsibilities of the Human Resource Department The Human Resources Department could handle more responsibilities and have stronger communication with Tim Cook, the Chief Executive Officer. The HR Department would also separate into teams and each team would handle one specific department within the corporation. The HR Team would be in charge of handling any employee concern regarding pay or a threat that could harm the outcome of a project. The HR Team or another executive officer that would have strong ties with the CEO, would meet once a week and provide any updates. Encourage Group Work to 2-3 Members Per Project Since individual work dominates the corporate culture and distrust among employees is existent, the encouragement of group work on one specific project could give the opportunity for two to three employees to communicate and expand ideas. However, group work can only be allowed to people that have been in the company for at least seven years. This is a suggestion because studies have shown that the longer an employee has been working at a company, the higher level of loyalty that employee will feel for his or her job. This will decrease the chance of any product leakage to the external world. Offering group work to employees will increase productivity and make work seem less solitary. Organize Motivational Seminars after Products Have Been Released The development of Apple products require a substantial amount of time and energy. Every employee puts his or her part into the final product to make it a success. In order for an

employee to remain engaged with a company and his or her work, motivation often comes into play. Another suggestion would be that when a new product has been released, to organize a motivational seminar for employees. This will give the executive officers a change to show appreciation for everyones hard work and make employees feel that they have contributed to something significant in the marketplace. This will boost employee work satisfaction. By affecting employee work satisfaction, employees will most likely stay longer with the company. Conclusion Apple Incorporated has revolutionized the technology industry and has paved the way to the tablet, computer and phone market. While it offers innovation in its products, it still manages to execute a user-friendly product. Its product simplicity has allowed Apple to expand overseas and become one of the most profitable companies today. Although Apple promotes a corporate culture of discipline and structure, it is important to pay attention to the concerns of lower-level employees. By increasing communication and encouraging group work to a healthy extent, employee loyalty will increase. This could also contribute to a creative distribution of ideas and make employees feel less fear through the management system. The above problem and solutions offer insights based on research and from students who have been employees for a long period of time. Based on experience, the idea of enhancing employee motivation will only affect productivity in a positive manner and increase corporate loyalty.

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