- Application of OB’s Macro Topics to the Apple Case Study - ORGANISATIONAL CHANGE TIMEFRAME THEORIES EVIDENCE & ANALYSIS Early 1980s: John Sculley’s entry into Apple and his initial change plan Planned Approach to Change 1. WHY – Identify the forces causing the change 2. WHO – Identify who should be responsible for the change 3. WHAT – Identify the problem (what needs to be changed); Identify the solution (what type of interventions) 4. HOW – Implement the change (unfreeze, change, refreeze) 5. EVALUATE – Monitor results, review and get feedback 1. External forces – By 1983, Apple was facing a very different environment where competition had increased as competitors had found it relatively easy to enter the PC market. Technological factors – the technology was not particularly sophisticated Capital was available and distribution channels were expanding rapidly Socio-cultural factors – the market was dividing into five broad segments (home, education, small business, corporations and the professional user), where each had different needs As a result, Apple found itself squeezed on both sides (from both superior proprietary technology and low priced Apple imitations) and it was losing market share, dropping from 29 to 24 percent. Internal forces – Apple’s products (e.g. the Apple II) were losing competitive advantage – rapidly aging, too expensive for many home users and unable to meet needs of professional and corporate segments. Apple also lacked the significant advantages of a “ready made network” and “massive sales force” that IBM had. 2. Internal change agent – On May 1983 John Sculley became president and CEO of Apple. (In a way, Steve Jobs, who was previously the change agent given his position as board of directors/chairman, abdicated the decision to an expert by courting Sculley and bringing him to Apple). Advantages: An ‘outsider’/fresh perspective to bring about the change; right knowledge, skills and attitudes – had the qualifications and experience as President of Pepsi-Cola Co.; innovative – credited with several innovations; had longstanding interest in technology and engineering. Disadvantages: Costly for Apple – compensation package rumored to be nearly $2million. 3. What needs to be changed – Apple needed to improve/upgrade and engage itself in innovation of products – in terms of quality to compete with rivals’ products and to satisfy unmet needs of different market segments. In other words, Apple required a new strategy/plan to achieve sustainable competitive advantage in order to gain back its falling market share. - Application of OB’s Macro Topics to the Apple Case Study - Type of intervention – In the case of Apple, Sculley adopted new strategies and reformed the company’s structure. As a result, the transformation started as a revolutionary change where there was an organisation-wide impact a new equilibrium was seeked as the new underlying strategy/vision of the company transformed the entire organisation and the new structure caused shifts in power. However, it is important to note that once the organisation settles into its new pattern and people adapt to their new roles, it does not mean that change has stopped. Rather, the change at Apple then becomes evolutionary and can be thought of as a continuum, as Apple continues to undergo further changes in the upcoming years. 4. Implementation of the change – the status quo of a decentralized structure around loose product groups was unfreezed to give way to change in Sculley’s new strategy of the rationalization of product lines into two product divisions – Apple II Division, headed by Del Yocam, and Macintosh Development Division where Jobs was Vice-President – each with decentralized manufacturing, product development and marketing functions aimed to facilitate a coherent product strategy. Other structural and processes changes include: - control costs, reduce overhead & rationalize product lines - centralized reporting relationships – 15 general managers who had previously reported to group vice-presidents now reported directly to him - downsizing – almost half of the 15 member senior management team was replaced or left; workforce of 5300 was reduced to 4600 - the generous profit sharing programme was suspended - marketing budget increased to $80million from $12million in two years Also, the Macintosh became the mainstay of Sculley’s strategy, which was aligned with Job’s vision as well. Both wanted Apple to have a basis of a technologydriven, product-oriented strategy and increase sales by not being IBM compatible, but “by making a second industry standard” – achieving for unique and differentiation position in the market. 5. Results – By end of Sculley’s first year, two successful computers were introduced. The Mac promised to be a major success and the Apple II extended the life of the Apple line which continued to provide more than three-quarters of the company’s revenues. Record earnings were announced by quarter ending Sept - Application of OB’s Macro Topics to the Apple Case Study - 1984, sales were up 54% and stock prices had rebounded. Mid 1980s: Problems resurface, which ultimately led to Steve Jobs leaving the company Beer & Eisenstat’s “Six Silent Killers” 1. Management style is either too top down or laissez-faire 2. Unclear strategy and/or conflicting priorities 3. Ineffective senior management team 4. Poor vertical communication 5. Poor horizontal coordination 6. Inadequate skills at lower levels Beer & Eisenstat’s Organisational Fitness Profiling – “Cures” 1. Partnership forged to include upper and lower levels 2. Top management develops a common business direction 3. Top team is involved in change process 4. Honest, fact-based dialogue is established at lower levels about strategy and barriers 5. New roles, responsibilities and structures to get the right people to work together the right way 6. Skills developed at lower levels via coaching, training, recruitment, firing if necessary In 1984, despite the initial success, competitive pressures and various internal problems caused problems to resurface and inhibit the successfulness of the initial change plan. Sculley experienced difficulties in changing the organisation because of Job’s resistance, as well as in resistance to changes in the strategy. Evidence of external forces from the case shows: − Competitive pressures continued Apple’s market share fell from 21 to 19 percent − Environment grew increasingly hostile in 1985 PC industry went into recession Evidence of internal problems from the case shows: − Still lacked coherent strategy to sustain growth and maintain market share − Lack of IBM compatibility and limited communication capabilities continued to hurt sales of Mac Jobs’ ‘go-it-alone’ vision was no longer such an effective strategy consider strategic alliance − Advertising strategy needs changing It would seem that Apple was not much prepared for this change as much of the problems that caused the change to originally failed can be attributed to the “Six Silent Killers” as follows: 1. Management style is either too top down or laissez-faire − It appears that much of the authority and power for decision making (e.g. company procedures, strict control of costs/overhead, etc.) lies on Sculley, as the CEO 2. Unclear strategy and conflicting priorities − Jobs and Sculley advocated different strategies for placing Apple on a firmer footing Sculley turned to focus on ‘how quickly can we bring down inventories and control expenses’, while Jobs wanted the original orientation of ‘how fast can we build them’ to continue − Sculley was ‘sandwiched’ between Job’s two positions as vice president and chairman of the board conflicting priorities 3. Ineffective senior management team − Jobs’ and Sculley’s different perspectives on Apple’s strategy and the fact that Jobs was both above and below Sculley (in terms of organisational structure) - Application of OB’s Macro Topics to the Apple Case Study - somewhat made the senior management team to be ineffective, which ultimately forced Sculley to asked Jobs to step down as vice president 4. Poor vertical communication − Throughout the change process, little evidence exists to show that Sculley (or the management team) has made efforts in communication towards lower-level employees to incorporate them towards making the change a success. New procedures/organisational processes and structures have simply been ‘forced’ down their throats for them to accept. Feedback/evaluation of employees’ response to the change seemed nonexistent. 5. Poor horizontal coordination − Jobs’ dismissive attitude towards the Apple II division and the company’s biased attention on the Mac division proved that there was poor horizontal coordination at Apple. The situation suggests that a greater amount of focus and resources were allocated towards Jobs’ department, while Apple II employees were ‘segregated’ from company’s annual meetings. A culture that was perceived to becoming increasingly corporate in nature and the difference in treatment may contribute to the reasons as to why several of Apple’s key personnel left the company. Late 1980s: Life at Apple after Steve Jobs left Planned Approach to Change 1. WHY – Identify the forces causing the change 2. WHO – Identify who should be responsible for the change 3. WHAT – Identify the problem (what needs to be changed); Identify the solution (what type of interventions) 4. HOW – Implement the change (unfreeze, change, refreeze) 5. EVALUATE – Monitor results, review and get feedback Soon after Jobs left, Sculley implemented another significant (structural) organisational change at Apple. 1. Internal forces – Sculley was determined to reduce duplication and ensure a lower breakeven point. Also, the intense rivalry between Apple II and Mac personnel had sapped morale in the organisation, which Sculley hoped to resolve by merging the two product divisions. 2. Internal change agent – again, Sculley would be primarily in charge of making sure that the change is successfully implemented. 3. What needs to be changed – the morale/culture between the two product divisions needs to be reinstated and improved, not only for the sakes of the organisation’s productivity but to increase employees’ motivation as well. It would appear that Sculley also needs to implement cost-cutting - Application of OB’s Macro Topics to the Apple Case Study - measures in order to lower the breakeven point and improve profit. Type of intervention – at first glance, a one-off change of unfreezing-change-refreezing was infused into Apple. The ‘unfreeze’ stage removed the status quo of the old company structure and ‘changing’ it by reshaping the structure into two functional groups. The ‘refrezee’ process consisted of reinforcing the change through norms, policies and practices. 4. Implementation of the change – Sculley decided that Apple should undergo another structural change by splitting Apple into two functional groups – one for product development and manufacturing, and the other for marketing and sales – instead of the previously decentralized divisions. Sculley also laid off one-third of the 6000 workers and closed three of its six factories. Finally, he reinforced the change by instituting strict financial controls, formal reporting procedures and tough product development deadlines. 5. Results – Sculley was able to pare the breakeven point to quarterly sales of $325million from $400million. Profits also doubled between 1985 and 1987, with its stock price soaring more than 500 percent. Sales of Mac doubled and other products, such as Desktop publishing and Microsoft’s excel also exceeded expectations. Hence, Apple’s 1986 earnings increased by 150% and shares were trading at over $40. Despite the company’s improved results, Sculley restructured the company again in 1987 – into three sales and marketing divisions by geographic departmentation, and separate division to handle development and manufacturing. The results, however, proved to be dismal. The new product development caused some problems, earnings fell by 30% in 1989 and market share dropped to 9% in 1990. Furthermore, major cuts (including salary freezes, layoffs, phasing out company cars and modifications to the profit sharing plan) were announced to reduce spending levels, and senior managers were forced to resign. 1990s onwards: Sculley as Chief Technologist and Job’s Implementation of another change: − 1990 – Sculley became Chief Technologist, which aroused considerable criticism − 1991 – IBM and Apple announced a technologysharing alliance − Perceived to be the decade in which Apple moves - Application of OB’s Macro Topics to the Apple Case Study - return to Apple from being a wild card in the industry to playing in the mainstream Results – despite Sculley’s best efforts and strategy of joint ventures with IBM, Apple’s shares fell over 60% in 1993 while a new product, called the Newton Notepad, turned out to be a major disappointment. In the end, Sculley exited the company as he became “too enchanted with the future of technology to manage Apple in the here-and-now”. 1996 – Jobs reunited with Apple, initially to act as parttime product strategy adviser to Gil Amelio but after Amelio’s departure, Jobs was made ‘interim chief executive’. RECOMMENDATIONS – Developing a Realistic Change Plan for Apple • Develop a thorough guideline/analysis as a way to establish whether the organisational change is necessary – Looking at the case of Apple, the company has undergone several substantial changes in terms of structural transformations and renewals of organisational processes/procedures. What must be taken into account, prior to the implementation of these changes, is whether they are even necessary in the first place. Although the first two big structural changes in the early 1980s and right after Jobs left the company appeared to be necessary due to escalating external and internal forces and unsatisfactory performance results, the same cannot be said for Sculley’s decision to restructure the company again in 1987. The causes leading to this decision needs to be explored as improvements in previous years’ earnings and stock prices have already been achieved, and thus, perhaps a substantial restructuring was no longer the most efficient and effective approach to heighten productivity even further. Therefore, it is crucial that management develop criteria in which problems must be diagnosed and interpreted correctly as a way to determine their criticality. • An analytical view of the changes at Apple shows that it has often been right on the spot in terms of knowing who should be responsible of the change and what needs to be changed and the associated interventions required. However, it seemed that Apple had often fell short when it comes to the implementation and evaluation stages of the change process. Below are some suggestions that Sculley should take into account in order to ensure a more cohesive and successful change plan: − Craft a detailed implementation plan – how, specifically, are the different elements of the change going to be achieved? Is there a time frame involved? When developing enabling structures, elements such as remuneration system, recruitment drive and technology must also be taken into account. Sculley must also consider taking preventive measures with regards to possible resistance that may emerge from other employees or management in response to the change plan. Such tactics for dealing with resistance to change that may be helpful in the case of Apple includes: Education and communication – Sculley should aim to communicate with employees to help them see the logic of the change to regain back Apple’s falling market share, which was caused by both external and internal forces. Hopefully, resistance can be avoided if employees receive the full facts and get any misunderstandings cleared up. This can be achieved through one-on-one discussions, memos, group presentations or reports. Participation – Sculley may choose to involve initial key personnels, such as Steve Wozniak, Mike Markkula and/or Steve Jobs himself and use their expertise to make useful contribution in hopes of obtaining their commitment and thus increasing the quality of the change decision. - Application of OB’s Macro Topics to the Apple Case Study - Facilitation and support – Sculley (and other middle-level managers that can assist with the change) can offer a range of supportive efforts to reduce resistance, especially when employee fear and anxiety are high due to transformation of processes, culture, structure, etc. Supportive efforts can include counselling and therapy, open forum discussion where feedback is encouraged, etc. Negotiation – this tactic requires the exchange of something of value for a lessening of the resistance. For instance, if the resistance is centred in a few powerful individuals, such as Steve Jobs in the case of Apple, a specific rewards package can be negotiated that will meet their individual needs. During the implementation stage, Sculley should emphasize on frequent use of good communication skills and being honest/forward towards the employees (and perhaps other affected stakeholders) as well as having emotional strength. − Establish a plan on how results and feedback will be monitored – by what standards or benchmarks will the successfulness of the organisational change be measured? So far, evidence from the case study have only stressed on figures and numbers, such as the increase in earnings/profits and stock prices, as a result of the change. However, it is essential that Sculley uses both financial and non-financial goals, especially in the long run, as a yardstick in which to measure the effectiveness of the change plan. Nonfinancial assessments may include Sculley should also consider setting a timeframe/deadline over the period in which the change program will be assessed, perhaps in a periodic manner to ensure continuous review and where the conclusions of those reviews should be fed back into the plan. For example, previous analysis using the “Six Silent Killers” as a way to diagnose the causes of failure in the change plan reveals that Apple suffers from: management style that is too top down, unclear strategy and/or conflicting priorities, ineffective senior management team and poor vertical and horizontal communication. In addressing these problems, Beer & Eisenstat’s Organisational Fitness Profiling will be applied: 1. Too top down management style – Sculley should aim to forge a partnership to include upper and lower levels, so that a more participative leadership and environment will be generated when it comes to decision-making. 2. Unclear strategy and/or conflicting priorities – Sculley’s and Job’s position as top management requires that the two develop a common business direction, instead of the current contradicting strategies that both tries to enforce on each other. Sculley might consider using negotiation (as one of the tactics for dealing with resistance to change previously discussed) to influence Jobs’ on his roles and establish boundaries that Jobs needs to adhere to, as his situation of being both the boss and subordinate of Sculley will only continue to complicate matters if left unaddressed. 3. Ineffective senior management team – Again, Jobs’ position in the company must first be sorted out in order to determine of who will have the final say in terms of decision-making power so that management can become more effective. Also, Sculley may find it helpful to involve the two department heads – Yocam and Jobs – and/or other middle-level managers to facilitate the change, given that they all act within the standards/duties that Sculley have assigned them with. 4. Poor vertical communication – Establish an honest, fact-based dialogue at lower levels to inform them about the company’s new strategies and barriers. 5. Poor horizontal communication – Sculley needs to be clear in the new roles, responsibilities and structures that have been set to get the right people to work together the right way. In the case of Apple, an inclusive culture between the two product divisions must also be handled with care. - Application of OB’s Macro Topics to the Apple Case Study - ORGANISATIONAL COMMUNICATION THEORIES EVIDENCE & ANALYSIS Key communication problems occurring in the case: 1. Lack of/poor vertical communication Lack of communication to the employees with regards to the organisational changes planned by Sculley Lack of monitoring/feedback system to assess the organisational changes being undertaken Recommendations to solve the problems identified: 1. FUNCTIONAL APPROACH When Sculley decided to bring about a major organisational change to Apple in order to improve sales and regain market share, it is important that he designed communication that focuses on the change. Some factors to take into consideration include incorporating face-to-face communication works for initial information about the change and eventually works towards following up with other channels, e.g. emails on support (relationships) and procedures (organising, e.g. how people will be selected for relocation, what compensation will be paid, etc.) Therefore, to ensure that Sculley engages in effective change communication and allows for a smooth transformation of Apple the functional approach will be used as a guideline: Function – Change communication is required prior to the implementation of the change, where Sculley needs to address the employees the causes/forces for the change (e.g. falling market share, unsuccessful products, etc.) This would help the organisation to adapt what they do and how they do it because they will have been aware and anticipate for the change about to take place. When effective, this also allows for employees to process the new ideas and information as well as the altering of existing procedures and processes, thus giving way to an organizing function of the message. Here, Sculley would establish an honest, fact-based dialogue at lower levels to inform them about the company’s new plans, including informing them of the planned restructuring, strategies and barriers. Finally, as the change comes into a progress Sculley may make the transition to focus on the relationship side of communication to provide further support for the employees. Networks – Both the formal and informal network will be used to communicate this change. In the formal network, Sculley may refer to the ‘organisational chart’ where he may choose to address his messages only to those that report to him directly (e.g. the rest of the management team that includes head departments/middle level managers), where afterwards they will then in turn forward the message to the rest of their subordinates/employees. However, Sculley must be aware that the informal - Application of OB’s Macro Topics to the Apple Case Study - network might also intrude in on his communication where rumors regarding the change may already been infiltrated across the organisational grapevine. Channels – Face-to-face communication seems to be the most effective means for the transmission of messages towards the beginning of the change due to its high media richness and allows for open discussions where employees can pose questions and receive direct answers. However, such communication mode calls for high time commitment and low spontaneity, and thus must be well-prepared. To facilitate the organising and relationship functions in the long run, Sculley may utilize other modes of communication, such as written memos and/or emails. Direction – Taking Sculley’s point of view as the new CEO, most of the communication will move in a downward direction – from a person in position of authority to subordinate groups of head departments and the rest of Apple’s employees. There is also possibility for Sculley to engage in upward communication if he chooses to communicate the change to the Board of Directors, and/or external communication should he decide to send out a press release. Load – Sculley needs to make sure that the message contains an optimum load, where the volume, rate and complexity of the messages processed by the individuals/organisation does not exceed or fall below the system’s capacity. There should be enough details abou the change, in terms of the planned restructuring and new strategies hoped to be implemented, lest ambiguity that may lead to more fear or anxiety among the employees. Distortion – When communicating the change, Sculley also needs to be aware of potential distortions that can alter meaning as the messages move through the organisation. This can be caused by inappropriate design in the messagel, wrong mode of channels/networks or simply due to perceptual differences between individuals. Thus, in order to mitigate these communicational distortions, Sculley should consider establishing a monitoring/feedback system that allows for continual assessments of the organisational change. Such a feedback system provides a medium for employees to address any concerns, misunderstandings or suggestions that employees may have to improve the change process, while at the same time allowing management to track their performance and measure their understanding of the new system/structure in progress at Apple. - Application of OB’s Macro Topics to the Apple Case Study - 2. Lack of/poor horizontal communication Not all divisions had access to the same information/meetings There were mixed messages in relation to the different strategies – Mac had high status but Apple brought in the revenue 2. The fact that not all divisions had access to the same information/meetings suggests either a lack of trust between the two departments or poor coordination between different areas of the organisation in terms of handling information. Therefore, functional barriers needs to be broken down in hopes that a more inclusive and participative culture will result throughout the organisation and ease the flow of communication so that all parties receive the required information. Sculley can facilitate this process by setting up meetings that aims specifically at bringing the the head of departments (e.g. Yocam and Jobs) together. Here, Sculley can act as an intermediary for Jobs and Yocam as they are ‘forced’/encouraged to exchange information regarding the difficulties and progress made in their respective departments, or even to express how they feel about each other’s leadership as well as sort out the mixed messages in relation to the different strategies (e.g. Mach’s high status vs. Apple bringing in the revenue). Hopefully, by spending more time together both individuals can gain a sense of trust and where mutual respect can also flourish. To ensure that all divisions have access to the same information/meetings, Sculley should send out emails/written memos and/or notices in the intranet/bulletin board informing all divisions and employees of the annual meeting that will take place and that they are all expected/required to attend. This way employees from all departments are made aware of the event and the expectations that come with it. Sculley can also exploit his power/influence for the benefit of the company where he needs to step up and lead the annual meeting as the President/CEO of Apple, and not have the meeting become a one-man show where all the ‘power’ falls to Jobs. In preparing for a more successful annual meeting, Sculley may draw up an agenda that is more inclusive in nature, which perhaps consisted of showcasing/introducing products from all departments (i.e. not just Mac) and recognizing achievements/accomplishments made in all different divisions. In addition, Sculley may choose to release information and let everyone know that those who participates in the meeting (e.g. by giving feedback, regardless of whether it is positive/negative, ask questions or bring suggestions to the company) will be rewarded. As a result, there is more incentive for employees to attend and Sculley can also reduce the marginalised perceptions that Apple II employees may have due to their prior exclusion from meetings or lack of attention, and ensure them that Apple still foster a collaborative environment. - Application of OB’s Macro Topics to the Apple Case Study - MEANING-CENTRED THEORIES OF COMMUNICATION Meaning-centred approach – way of understanding organisational communication by discovering how organisational reality is generated through human interaction. The approach describes organisational communication as the process for generating shared realities that become organising, decision making, sense-making, influence and culture. 1. How do meaning-centred theories provide additional insight into the situation? 2. What metaphors are present/used and what are its effects? 3. How do power, culture and decision-making affect formal and informal communication? a. How does the communication shape organising and decision making? b. How does the communication shape power and influence? c. How does the communication shape culture and socialisation? MEANING-CENTRED APPROACH Organising & decision making – Communication appeared to reflect organizing and decision-making that is mostly top down, where Sculley as CEO handles all decisions regarding to new structures and organisational procedures. Jobs also appeared to have one-sidedly handled communication and excluding other managers (e.g. Del Yocam) from the process (e.g. annual meeting). There seems to be no opportunity for feedback, which means that decision making processes are not particularly participative. Power & influence – Sculley has influence over the matters regarding to the organisational change being undertaken at Apple, but at the same time he face resistance from Jobs as he exerts his own power/influence over his department to the detriment of other divisions in the organisation, to the point where Sculley felt that he “had given Steve greater power than he had ever had and ... had created a monster”. Sculley therefore needs to communicate this discension through confrontation and making Jobs aware of his charisma but domineering leadership style that fostered ingroups (Mac division) and outgroups (Apple II division), which tends to take control of decision amking and not listen to the opinion of others. Hense, there is a need for a more collaborative environment, where leadership roles and boundaries are clearly established, and for the use of effective negotiation to resolve conflicts. Culture & socialisation – Employees attitudes, e.g. satisfaction & commitment changed over time as the structure and culture of the organisation changed. For example, in the mid 80’s the restructuring at Apple seemed to have caused the culture to differentiate, bringing with it two distinct sub-cultures of Mac vs. Apple II division. Thus, the absences of communication between the two functions helped shape this culture, which is one that appeared to lack trust and/or coordination and reinforces superiority to the Mac employees. This meant that some individuals became increasingly dissatisfied with their jobs. This resulted in a number of key personnel leaving Apple. Metaphor – transformational metaphor that seeks to liberate and recreate how Apple is run under the new management of Sculley, which brings about new ways of doing things (strategies), structure and Steve Jobs’ eventual exit from the organisation. - Application of OB’s Macro Topics to the Apple Case Study - FUNCTIONAL THEORIES OF COMMUNICATION Functional approach – way of understanding organisational communication by describing what messages do and how they move through organisations 1. What is the function/type of the message? (Organising, relationships, change) 2. What networks are targeted/used? (Formal, informal, technological) 3. What channels are used? And what are the advantages/disadvantages? 4. What is the direction of the message? (Horizontal, upward, downward, external) 5. Is the information load appropriate? 6. What are the main causes of distortion, and what can be done about them? (Encoding & decoding, wrong network, wrong channel, overload/underload, feedback) 1. Function – In confronting Jobs to step down from his position and asking the Board’s help to support Sculley with his decision, Sculley is in a way attempting to get across a message that establishes both a change and relationship function. In this case, Sculley’s message of change is one that stems from an individual decision making as Sculley may have felt the need for continual adaptation to the Apple’s working environment as Sculley felt that Jobs could no longer work effectively under the Mac division. In doing so, Sculley also tries to meet the complex needs of inviduals (e.g. Jobs and Sculley’s strained relationship) to be able to work together. Sculley’s decision in asking Steve to relinquish control also serves as a relationship function, as Sculley tries to define his firm role in the company given that he was ‘sandwiched’ between Jobs’ two positions as vice president and Chairman of the Board, and thus assessing the compatibility of him and Jobs to be able to work cohesively to achieve the organisational goals. 2. Networks – Sculley uses a formal network, where he refers to the ‘organisation chart’ as a guideline and chooses to ask for the support of the Board of Directors as a means to communicate his decision to ask Jobs to step down, thereby bringing change and affecting his working relationships with Jobs. 3. Channels – The mode(s) chosen for communicating the message is a face-to-face/group meeting between Sculley, Jobs and the rest of the Board of Directors. In communicating such a delicate matter, this seems to be the best approach as a face-to-face meeting has a high media richness to it, which leads to a more effective channel compared to simply sending out a memo or email. However, the high time commitment associated with such a channel must also be taken into consideration. 4. Direction – Upward communication describes the message movement when Sculley scouts for the Board’s support to back him up in asking Jobs to step down. However, at the meeting when all parties met to discuss the issue, Steve Jobs was both the Chairman of the Board and below Sculley as vice-president, thus making it both an upward and a downward form of communication. 5. Load – the information load seems to be appropriate, as Sculley is clear on his decision to have Jobs stepped down from his position and has defended this with the rationale that Jobs can no - Application of OB’s Macro Topics to the Apple Case Study - longer work effectively. In getting the Board’s support Sculley was also clear on his determination to resign if the Board does not comply with his request, thus leading the Board’s unanimous decision to ask Jobs to step down as executive president. It appeared that Jobs fully understands what has been asked of him, given that Sculley signed the paperwork removing him from his position. 6. Distortion – In this scenario, there seems to be a bit of misunderstanding, perhaps due to perceptual differences, the way the message have been encoded and decoded by the sender/receiver or an underload in the content of the message as Jobs failed to fully disclose his intentions to the Board. When Jobs announced his plan to start a new venture, the Board initially was considering to purchase a 10% stake in the new enterprise but on learning that he was taking five key employees with him, immediately demanded his resignation. Encoding and Decoding Encoding – the translation of a message/information into code/characters/symbols, etc. by a sender so that it can be relayed through a medium to the receiver Decoding – the step in the communication process in which the receiver accepts and interprets the message, and thus provide feedback to the sender ORGANISATIONAL CULTURE - Application of OB’s Macro Topics to the Apple Case Study - THEORIES 1. Define the term ‘culture’ Culture – in its simplest terms, it is a system of shared meaning within an organisation 2. List the different ways we can observe/identify culture Observable sysmbols, communication patterns, stories, physical layout, practices and behaviours, values, assumptions, feelings and beliefs 3. How would you describe Apple’s culture? What clues tell you about this culture? List the visual things that you notice about Apple – specific artefacts and practices or the way people behave – that indicate the organisation’s culture 4. What do these artefacts and practices tell you about organisational members’ beliefs, values and assumptions? Integrationist Theory 1. What position does this theory take? 2. What to look for in an organisation when using the theory 3. How is culture managed according to the theory? 4. What are the strengths and weaknesses of the 5. theory? 6. Is the culture organization-wide? Is there emphasis on a strong, single, unified culture? 7. Is the culture deliberate, i.e. is there evidence of culture being “engineered”? 8. Is the culture supported by consistent management practices? 9. Are people socialized into the culture? 10. Does it benefit organizational performance? 11. What else would lead a researcher to think there is an integrationist culture? EVIDENCE & ANALYSIS The culture changed over time as the company grew and its strategy changes. Integrationist theories describe the early Apple well, while differentiationist theories describe the Apple vs. Mac situation. In the beginning of Apple’s development under Steve Jobs, Apple’s culture is one that resembles a fun, unique and eccentric yet competitive in nature. Indications of this organisation’s culture come from the firm’s emphasized values on individual achievement, entrepreneurialism and commitment/devotion to the company. As a result, an outsider looking into Apple may see that some kind of ‘evangelical spirit’ had pervaded the company to the point that employees carry an attitude and believe somewhat self-righteously that it was their ‘mission’ to bring computer literacy to the masses. The fun and eccentric atmosphere can also be described as laid back and cocky, with Michael Jackson music blasted in the lobby and the employees’ casual dress code of jeans and sneakers. Thus, interaction was often informal. Furthermore, rooms were named after creative artists like Picasso and Rembrandt, and aesthetic values were important – from the design of the product to the design of the working environment. Integrationist theories is characterized by consensus on external adaptation i.e., agreement of the organisation’s goals and mission and on the strategy of how to achieve them, which in this case describes the early Apple well. We can see evidence that the “old” Apple integrationist culture emphasized on a strong, single, unified culture (dominant culture) that values individual achievement, entrepreunalism and consist of individuals with strong organisational commitment. The unique culture of Apple appears to be part of a deliberate strategy or “engineered” by Apple founder, Steve Jobs to alleviate productivity and innovation as well as establish a sense of a “we” belonging in the organisation. Apple seems to function and thrive under a non-conventional way of doing things, and this is also supported by consistent management practices, e.g. where Jobs himself solved the lack of software problem in a typical counter-cultural move by publishing the technical specifications of the Apple II. The various activities and cultural elements of the organisation would constitute a fairly clear socialisation process whereby new members coming into the organisation can learn about the explicit norms that govern behaviour, identify with the organisation through compatibility assessments of personal’s and company’s - Application of OB’s Macro Topics to the Apple Case Study - goals. Thus when socialisation is effective and a strong culture is shared organisation-wide, it can benefit the organisational performance to help reduce turnover, increase motivation, and the culture of fun appears to be appropriate for what is relatively a young workforce. With respect to the organisational change being undertaken at Apple, the “old” Apple integrationist culture seemed to still exists in the “new” Apple under the management of Sculley. Thus, even though Apple had been set up to carry out a different strategy and operated under a different structure, the lingering effects of the old integrationist Apple culture (where Jobs under his own Mac division continues to perpetuate the unorthodox culture) is enough to prevent the new organisational change at Apple from being successful. Differentiationist Theory 1. What position does this theory take? 2. What to look for in an organisation when using the theory 3. How is culture managed according to the theory? 4. What are the strengths and weaknesses of the theory? 5. What evidence is there to support the differentiation view? Do you see any evidence of a differentiated sub-culture? 6. What would a researcher have to do to see if the culture was differentiated? 7. Think about the different groups of people at Apple , e.g. managers, employees, different individuals. If you compare these groups, can you think of different ways to describe their subcultures? After Sculley became the President and CEO of Apple, we start seeing a different approach to the company’s culture that can be well described through the differentiationist outlook. An organisation is characterised by a differentiationist culture when it comprises a cluster of separate sub-cultures related to particular challenge, task or responsibility of a unit or group – which in the case of Apple describe the Apple vs. Mac situation well. We can see evidence of a conflicting relation among the subcultures emerged under the two very separate departments of the Apple and Mac division. The Mac division is the most powerful and has a high status, where employees’ motivation are high due to the luxury of resources (e.g. fruit juice, masseur and fun atmosphere filled with Rock music) endowed by Steve Jobs and the unorthodox culture that he perpetuated and encouraged. Moreover, Mac division employees can even be seen to be in a more superior position and more appreciated for their work as they had the privilege of sitting in the front row seats during the annual meeting while Apple II employees watched on a closed circuit TV from another room. On the other hand, the Apple division headed by Del Yocam was made to feel inferior as he found it difficult to compete with a manager who had 12% of Apple’s shares. The feeling is further illustrated by an employee’s statement saying that “We used to say that the Mac people had God on their team”. Thus, different parts and employees of the organisation have different views and reactions toward the culture, where those in the Apple division felt that it had become increasingly disenchanted with the lack of attention and facing a culture that they perceived to be becoming increasingly corporate in nature. The fact that the two departments have developed separately means that they don’t communicate with each other and are not aware, therefore, of the different - Application of OB’s Macro Topics to the Apple Case Study - challenges faced by each in relation to the new, yet still incoherent, strategies under Sculley’s organisational change. In addition, they do not identify with the larger organisation but with their individual departments, which makes it difficult for them to work together effectively. In order for a researcher to determine whether the culture was differentiated, people in different parts of the organisation, and perhaps even those outside the organisation, needs to be observed and interviewed. But in doing so, the researcher needs to gain their trust so that they are honest about the culture. Critical Theory 1. Describe the theory 2. What does this theory identify and explain? 3. 4. 5. 6. 7. 8. 9. Who benefits from the culture? How easy is it to resist this culture? What would happen if they did resist? Why might people go along with this culture? What other forms of resistance are there? On the other hand, some people like to work at Apple. So why/when might such a culture benefit individuals? What does a critical researcher have to do when studying culture? What are the disadvantages of working at Apple from an employee’s point of view? What type of people do you think would find it hard to work at Apple? Why do you think that is? ORGANISATIONAL POWER & POLITICS A critical theory of culture focuses on how employees are affected by the culture and particularly on the issue of how power is embedded in the culture. We can see that in the culture at Apple, most of the power seems to lie with the Macintosh division, but more specifically with Steve Jobs, who seem to use it for his own department’s purposes and, as a result, are not interested in the accomplishments or problems facing employees in other departments. It can be argued that benefits from the culture (e.g. increased employees’ motivation and innovativeness) are not captured entirely by the whole organisation but rather benefits only for those working under the Mac division, which ultimately acts to the detriment of the rest of the organisation. An individual working under the Mac division may find it difficult to resist the culture, as it is one that is fun, rewarding and attractive in nature. On the other hand, other employees may feel pressured to conform or feel that they can’t speak/act out against the parts of the culture that they don’t like due to peer pressure or for fear of losing their job. In the end, other forms of resistance begin to surface as people withdraw from the organisation. The fact that the Mac division’s, and therefore Steve Jobs’ power is part of the culture is shown by Jobs’ dismissive attitude towards the Apple II division (despite its performance), such as addressing its marketing staff as members of the dull and boring product division and failure to say anything regarding the Apple II computers or the people who had made it a top selling product. The lack of attention and differential treatment (e.g. segregation of Mac vs Apple employees in the annual meeting) also helps to explain the low morale and departure of a number of Apple’s key personnel because employees have become dissatisfied with this process. A critical researcher needs to get beyond the culture as espoused by both managers and employees when studying the culture, identify whom the culture benefits and whom it disadvantages and finally avoid taking sides. - Application of OB’s Macro Topics to the Apple Case Study - THEORIES EVIDENCE & ANALYSIS First Dimension of Power • Source of power – access to ability to hire & fire, rewards, punishments, funding, authority, expertise, etc. • Outcome of power – principles of behaviour modification can be used to enforce or encourage new behaviours • Limits to power – behaviour may revert to previous patterns without continual use of resources to encourage a certain type of behaviour; repeated use of the resources may be counter-productive First dimension was generally used to encourage and reward innovativeness. In addition, Sculley uses his authority power to restructure the organisation and made necessary changes, such as company’s downsizing, suspending the generous profit sharing programme and increasing the marketing budget. By reinforcing and instituting strict financial controls, formal reporting procedures and tough product development deadlines, Sculley hopes to reach an outcome where individual members prioritize behaviours to enhance product quality and innovation, and at the same time lowering costs, pare the breakeven point and increasing sales and profits. Perhaps there was also a struggle between Sculley and Jobs with respect to the first dimension of power, as Sculley tries to allocate resources to accommodate the organisational change while Jobs asserts his own power and expend resources to his own department to facilitate the unorthodox culture that typified Apple and pursue his own strategies to bring Apple to a firmer footing. Second Dimension of Power • Source of power – access to decision making processes, participants and agendas, etc. • Outcome of power – new awareness can be created by opening up processes to new participants, issues, ideas and agendas • Limits to power – new awareness helps to sustain new behaviour as long as it remains within the existing beliefs embedded in the organisational culture; if it challenges existing beliefs the new processes may be undermined Second dimension was used in two different scenarios, the first being to exclude Apple II employees from meetings, giving Mac employees more power, and the second where Sculley sidelines Jobs (resistance) when he approached the Board of Directors for support in his decision to ask Jobs to step down from his position – thereby changing the allocation of responsibilities within the organisation. This way, Sculley removes the main source which had caused the problematic dissension of being able to move forward with his strategy. The outcome of power results in Job’s leaving the company that he had founded. Third Dimension of Power • Source of power – access to symbols, language, etc. • Outcome of power – new beliefs about the “best” way of carrying out one’s work; desired changes can be made to appear legitimate, desirable, rational or inevitable • Limits to power – beliefs and the culture in which they are embedded may change but the impact is general rather than specific; precise changes in behaviour and awareness are unclear and difficult to target; people may not know what they should be doing differently Sculley had to manage meaning in relation to his own position – he came from a soft drinks company and needed to be seen as legitimate by computer geeks. This is accomplished by Sculley’s efforts to manage to fit into Apple’s unique culture and sending out Indiana Jones and the Temple of Doom tickets to the employees, while he also mastered the intricacies of hardware and software technology, and abandoning his business suit in favour of a more casual look.
Right man, wrong jobIntroduction-1-
Deewakar Hansa - vice pressident of catalyst solution(consultancy)2-
Amit Roy - business head.3-
Dave - country head.4-
Keith - Asia pacific head.5-
Boss -who sits at London .6-
David jones - business advisor to Dave.Dave asked Deewakar hansa to hire Amit Roy because he knew that, hecould turn around the fortune of the business. For xanites India was ontop priority for outsourcing the call centre operation. Dave clearlymentioned that he needs a business head who understands the Indianmarket properly. Dave thought that it would be good to hire a skilledperson especially for the operation in India. Amit Roy a guy had anexperience of 18 years in two different companies. He was an activeperson who always motivates hi subordinate to give their 100%. He waswell suited to the needs of xanites. After three months Amit Roy joinedthe XANITES. Amit roy was not proving himself as the organisation hadexpected. Amit Roy finds what exactly needs to be done but after severaldiscussion and presentation nothing moved.Deewankar hansa asked why?Amit roy replied, they still wanted to know the Indian market and culture.After sometime Amit Roy said to deewankar hansa , my boss Keith , thehead of Asia Pacific operations has agreed with the plan. But sanctionshad to come from higher authorities. Keith spoke to lies boss who made acall to commercial director and so on and our competitor had alreadyimplemented. After seeing Amit Roys sad face deewankar hansa pickedup phone and spoke to no. of people that he has a very big plan whatxanite needs. Some youth management told that we should implement