The concepts of corporate culture to management
Corporate Culture is a relatively new concept to management science. Since its discovery in the eighties, it has become a relevant tool in understanding and evaluating how organizations function similarly to living systems.
Apple Inc under the stewardship of Steve Jobs has evolved into a truly multinational company, and has carved its own niche into the annals of the personal computer industry. Consistently posting high earnings with an ever increasing portfolio and a rapid expansion into new territories prove that the company is ‘doing’ what they do very well. However, analysts argue that there are many aspects of the corporate culture that needs to be discarded, or at the very least changed for Apple to remain relevant in a future that is viewed with ever increasing complexities. They believe that Apple’s strong attachment to its charismatic leader will prove to be inimical upon his departure by creating a negative domino effect on other components of the corporate culture.
This paper attempts to act as a window to view the health of Apple’s corporate culture and provide a diagnostic and prognostic commentary on the corporate culture of Apple Inc, taking into account the correlation between the various components that make up the corporate culture.
1.0 WHAT IS ORGANIZATIONAL CULTURE
Senior (1997) describes culture as ‘the way things are done round here’, it is typical of the organizations habits, prevailing attitudes and grown up pattern of accepted and expected behaviour. Culture has also been expressed as the ‘social glue’ that connects the organizational structure and management style to its strategy (Pettigrew, 1985). Different elements of an organization combine to make up its culture. The model shown in Fig 1.1 shows the complex interrelationship that exists between these various elements and illustrates that no individual component can be independently altered, without having an effect on all the others. Hycynski & Buchanan (2007) went further to explain that, the culture of an organization could be divided into formal or informal culture. Formal culture had to do with the organizations perception on its policies and procedures, spans of control, mission and vision statements, and production efficiency measuring systems. The informal culture comprised of intangible aspects such as the personal relationships that exists between employees, grapevines, group norms, informal leaders, prestige and power structures, personal/group goals, emotions and needs.
STRATEGY CULTURE LEADERSHIP
Fig 1.1 interrelationship between culture and its elements
Deal and Kennedy (1982) postulated that, the formation of an organizations culture incorporated five essential elements: the business environment, values, heroes, rites and rituals and the cultural network. In their arguments they offered that external influences like government policies, and competition from other organizations, influenced the corporate culture. They added that ‘values’ were the subconscious fundamental concepts, usually espoused by the founder and shared by employees. The routine behavioural rituals and the grapevines of the company also shaped the culture. They claimed that the figure head of organization, who was often the founder, transmitted their personal ideologies into the organization
1.3 WHY IS APPLE’S CULTURE UNIQUE
Apple has a unique culture because it doesn’t conform to the principles that governed established thought patterns in conventional management systems. Their strategy was to adopt ‘bits and parts’ of these systems and apply them specifically to different business units across the entire organization. This made the organization’s design very flexible and suited for the high tech industry. The downside to this strategy was that they had to forgo the stability and predictability that these systems offered, and live in the present with the unpredictability that was associated with it. This strategy also made for contrasting styles of management. For example, Apple employees were given freedom to be expressive and creative at work but were also heavily censored by Jobs and management when it came to interacting with colleagues both within and outside Apple. They could neither relate with each other on projects nor speak with external sources like the media, or blog about their work at Apple. Another example was while the work environment and dress code looked casual and informal, it veiled the strong work ethic and tough empathy shown to workers by management who stepped out of line, or employees who Jobs saw as being inefficient.
Another unique attribute of Apple’s culture was the level of secrecy espoused employees of the organization was somewhat unusual for a commercial organisation. They were parsimonious with information, to the public and punishments for contravening these standards were exceptionally harsh. Terminating and criminally prosecuting employees who were perceived as traitors weren’t uncommon. Apple also did not feel mutually obligated to their employees and openly stated that they offered employability and not employment. Conventional organizations might utilize such a strategy but would not go as far as openly stating it as one of their policies.
2. ORGANIZATIONAL CULTURE AND LEADERSHIP
Steve Jobs has been credited with transforming Apple the into a successful enterprise. His charismatic nature and expertise in the technological industry, accord him the power to influence the prevalent culture at Apple. Leaders have a role in creating and maintaining the corporate culture of an organization (Schein, 1992). Equally, the ability for the leaders to understand and work within a culture is a needed for effective leadership (Hennessey, 1998). Burns (1978) offered the concept of transforming leadership. He implied that such leaders had a mutual relationship with their followers because as they inspired them to achieve extraordinary results, they also developed their own leadership skills simultaneously. (Howell and Avolio, 1993) believe the visionary, and inspirational skills of transformational leaders, motivate followers to deliver superior performance. The performance of an organization is dependent on the conscious alignment of employee values with the espoused values of company by the leader. Ogbonna (1993)
However, for the employees to perform at a high level it is necessary for management to ensure they are properly motivated to carry out their goals. (HAYWARD desktop) Fiedler and House, 1988) opined that effective organisations require effective leadership, implying that organisational performance will decline if leadership is ineffective. Furthermore, effective leader behaviour facilitates the attainment of the follower’s desires, which then results in effective performance (Fiedler and House, 1988) These theorist explain the link between leadership an employee performance. The organizational culture of Apple can be said to reflective of the ideologies of their iconic leader Steve Jobs. By using a ‘hands on’ style of leadership, he is heavily involved in product development and the day to day running of Apple. (Bass and Aluvio, 2006). Merenda (1999 is in Bass) are of the view that organic structures are better suited for transformational leaders to perform in, because it allows the transformational leader to have interpersonal dialogues and physical meetings with their subjects as often as possible
Although known for his quirky idiosyncrasies, most employees admired him because of his expertise and charismatic nature. They identified with his vision for the organization and were to bein part of its realization. He was able to use the power accorded to him by the employees to shape and mould the culture at Apple. Jones and Scholes (1999) claimed that leaders are accorded referent power, because of their special knowledge and skill in a discipline, or their ability to use punishment and intimidation as coercive tool of control. They called this ‘expert power’ and coercive power’ respectively. His critics believe the tough empathy and treatment meted out to his employees, made employees to fear him rather than aspire to become like him, this implied that the possibility of raising sycophants instead of protégées was present. Collins (2001) suggests that the “moment a leader becomes the primary reality people worry about, rather than the reality being the primary reality; you have a recipe for mediocrity”. Other analysts validate his style of management claiming it brings clarity and direction and if properly implemented serves as a good motivational driver.
Jobs created dual functionality role for himself as a leader and manager due to his affinity to micromanage every process.(leader manager theory) As a visionary he had the ability to see the big picture but needs to allow professionals, who had been trained in management, to take the organization to that realization. Mumford et al (2002) opined that in the present digital age, transformational leaders were more inclined to be involved in creating an environment that will foster workers creativity and then assess their results rather than being looked up to as a source for inspiration for innovation. Analysts fear that his passion for the realization of sought out goals could make him ignore ‘red flags’ dysfunctional management if he continued to function as a leader/manager.
Another area of concern was that his enthusiasm could wear down some of the employees, because one style of motivation could not be universally applied across the entire company, since people were motivated by different reasons. His strong leadership and consistent returns on profits gave employees confidence in his abilities to lead. Adversely, being too strong made his decision making process very autocratic and rarely incorporated other people’s suggestions. Apple as an organization was also criticized for being attached to Jobs. There was the fear that if he should leave the future of the company could be in jeopardy if they couldn’t find somebody to fill those ‘big shoes’. He was also known as the cheif proponent of the secrecy and self sufficiency policy of Apple, thus the question as to whether these aspects of the culture would change with him in the driving seat was highly unlikely. Gagliardi (1986) contends that “changing an organization with a strong culture is limited, because members are especially resistant to changing those strongly held and widely shared values, even when the change is beneficial, resistant members may prevent the change from occurring”.
(.....) belive that innovative companies need transformational leaders who are strong and desicive, however it would be prudent, for Jobs to make some changes to his style of leadership. He should endeavour to allow his subordinates to become more participative in desicons and also treat workers with more empathy. Jobs should also initiate coaching and mentoring programs to groom more leaders like himself so he can transfer will be smooth and efficient.
CULTURE AS DETERMINANT OF MOTIVATION AND PERFORMANCE
Organizations are inanimate entities, however, the people who work within the organization give it its identity, by defining the behaviour of that organization (ref). Steve Jobs uses his transformational style of leadership to drive the employees at Apple to aim for lofty goals. (Bycio et al., 1995; Howell and Avolio, 1993) suggest that transformational leaders are visionary and enthusiastic, with an innate ability to motivate subordinates by encouraging them to adopt the organisational vision as their own, through inspiration. New graduates were motivated to join Apple because they viewed the company as ‘cool’ to work with, and relished the opportunity of working alongside Jobs and other great innovators. Jones and George, (2001) contend that for employees to be properly motivated it is crucial to have a clear understanding of their psychological needs, as this denotes the behavioural pattern of the employee within the organization.
Maslow (1960) postulated that all peoples have five basic kinds of need, which could be arranged hierarchically, starting from the most fundamental basic need of all which where physiological needs. He stated that when those needs are fulfilled there is a shift in the level of expectation by the individual, and they progress to next level of needs consequentially. Self actualization needs were the pinnacle of the needs pyramid and was need to fulfil one’s potential as a human being. Fig 2 shows a model on Maslow’s Hierarchy of Needs
Highest level Self actualization needs
These young graduates were eager to join Apple regardless of the company’s reputation of overworking their employees, without offering any special bonuses or benefits. Applying Maslows model to this example, their belonging needs, which was to become part of the Apple family, superseded their safety needs which would have offered job security, and ensured good working conditions in another company. Other employees at Apple strived to win the approval of Steve Jobs, because they needed to fulfil their esteem needs, and as such, didn’t mind undermining their self actualization needs by accepting Jobs autocratic and sometimes bashful behaviour. Getting recognition from him and their colleagues validated their accomplishments, and pushed their needs to the self actualization level. However, some employees favoured recognition by the Apple Fellows program and being included into the FlexBenefits program, which were rewards directly tied to their achievements in their endeavours at Apple.
Apple’s implemented a task culture which encouraged individualism. They believed that, people would strive to do their best, if given the proper motivation and platform for creativity (Schein, 2004). Handy (1976) using work earlier developed by Harrison (1972) proposed that, a ‘task culture’ built their systems around goal accomplishment. Employees were pooled from the different units to work on particular tasks, and returned to their traditional roles after completing the project. This culture of individualism ensured that the products offered by Apple had a diverse range of applications due to the multi dimensionality incorporated into their design. It gave their product leverage in comparison to other brands, and was a key factor for their consistent financial returns ( Exhibit ). The task culture also ensured that, the company maximized their human resource assets, because unproductive employees couldn’t dsapear in teams and groups.
The fact that Apple made consistent profitability in their earnings (case study) made their employees to believe, they had a winning culture. Individually, success at their tasks, meant enhanced reputation and recognition by colleagues, perks and privileges such as working on big projects and a host of other financial rewards. Poor performance or failure on the other hand, resulted in abandonment and sometimes job disengagement. “At Apple you were only as relevant as you last hit” (Schein, 2004). Seniority on projects wasn’t defined by roles and responsibilities, but by the expertise and skills, the individual possessed in relation to the task at hand.
This system of rewards strategy associated with the culture at Apple proved to be effective because it provided the drive and motivation, most employees needed to succeed. However, it also had the potential of creating competition amongst colleagues because of the disparity in the treatment of workers based on their performance. Such competition if not channelled constructively, can bring about sabotage and office politics which would be inimical for the performance of the organization. There is also the danger of creating insubordination, jealousy and resentment amongst colleagues, if a clearly defined hierarchy of authority isn’t used to control decision making processes concerned with projects. Another point of concern was, as long as Apples culture remained individualistic, employees who joined organizationin with the expectation of working with great innovators sooner rather than later became disillusioned because they realized everybody was their own resource repository. This could become a de-motivating factor and have an adverse effect on their performance
At Apple although deadlines were issued to employees, they were not giving specific goals to aim for. This meant that everybody to ‘did their own thing.’ The rationale was, since no goals were set, they had the freedom to explore into diverse range of ideas which will further stimulate their creative thinking. This strategy though a good idea in enhancing creativity, could also be a de-motivating factor because, every individual is different and some people need to have a set out target to aim for. Locke and Latham (1981 price) suggested that the motivational drive of an employee was determined by the goals set before them, because it affected their performance in the achievement of such goals. It would be beneficial for their management to endevour understanding the motivating determinants of their employees, so as to know what motivates them individually, rather than applying one standard across the entire company. Goal setting should be incorporated for workers who required such for motivational purposes and freedom to should be allowed to those who prefer to work that way taking note that ‘one size doesn’t fit all’. Eliminating set out goals may cause some workers to lose their momentum in seeing projects to the end, and this could lead to overall poor performance. Their strategy of using only results to gauge performance without inquiring about the processes that lead to the result causes management to make a hurried evaluation of workers who underperform, and as such lead to wrong dismissals. It is necessary for Apple to pay more attention on the processes involved in achieving the objectives, because this shows the employees that the company is interested in their development and doesn’t just view them as a ‘pair of hands’. Such a strategy would boost morale and give extra motivation to work harder at improvement. It can also reduces the employee turnover rate of the organization and helps them retain their personnel which is key for a company that tries to be as self sufficient as possible. By evaluating employee needs and motivator factors, Apple can incorporate mentoring and coaching programs into their culture which would help retain more staff and give confidence to workers who need to be brought back on board
STRUCTURES AS PLATFORMS FOR STRATEGY IMPLEMENTATION
Wilson and Rosenfeld (1962 from notes) offered that structure distinguishes parts of an organization and delineates the relationships between them. Organizational structure could be defined as the “relatively enduring allocation of work roles and administrative mechanisms that creates a pattern of interrelated work activities, and allows the organization to conduct, coordinate, and control its work activities" (Jason and Morgan, 1982) seen in structure desktop). Hierarchical structures are affiliated with large organizations, and originate from ideologies of classical management theories, originally established by Max Webber (1947). These theories known as principles of management, were structured on “hierarchy, authority and notions of control and they considered the use of rational approaches, and long term planning processes as highly desirable.” (McMillian culture desk top). (Jones and George 2008) added that these mechanistic structures had a centralized authority with clearly specified tasks and rules.
In a bid to improve the cross functionality of business units within the organization, and better socialization between employees, Steve Jobs flattened the structure at Apple and encouraged a corporate culture were fun was seen as an integral part of work (case study). A Flat structure unlike the hierarchal structure, is a much simpler in its design, and is referred to as being organic because of its ability to adapt and change continuously as the environment in which it operates changes (Mintzberg etal, 1995). They are informal and decentralized, with fewer levels of management. Employees are empowered to make decisions at their respective levels, thus are giving greater responsibility and freedom (Thompson). This flattened structure was implemented by Jobs to eliminate the ‘red tape’ affiliated with bureaucratic organizations, because it facilitated the free flow of information due to the fewer levels of management and provided the opportunity for inter personal communication which in turn lead to exchange of ideas for better creativity. It is was viewed as suitable for a company like Apple that needed to continuously innovate products, in an industry were product life cycle was limited to a few months.
Realistically, at Apple, this flat structure was only utilized in lower end of the organizations structure. The actual structure gradually evolved to a mechanistic structure with increasing levels of management. Apple couldn’t implement such a simple structure because of the complexity associated with the environment they operated in. They have tried incorporating some aspects of mechanization into the culture to give a better overall operational performance. For example their Apple recently ventured into vertical integration in a bid to remain competitive with the bigger players like Microsoft (http://www.newsweek.com/2010/01/29/going-vertical.html). However, they struggle to maintain an efficient distribution system as could be observed during the recent launch of their latest product; the iphone 4 in the United Kingdom. Metro (2010) states that, Apple experienced distribution problems which hampered sales to their customers. Apple is likely to continue to experience such problems across different units of their organization, because of the refusal of Steve Jobs to adapt a more efficient structure or allow other companies with core competencies in these disciplines, work with them. Jobs strategy is to sacrifice mechanization for innovation, believing that the unique nature of Apple’s products validate the premium price paid for them by customers.
The indecisiveness of Apple’s leadership in selecting a particular structure to employ, has created a hybrid structure. This amalgam of structures which Apple implements will have an adverse effect on the organization because it is devoid of any standardized or predictable process on which to deliver their strategy. Apple’s attempt to use a more organic structure creates a dissonance in the fact that, Apple’s culture supported individualism, thus conflicting with the application of this structure. Also, the idea of ‘work hard play hard’ seems out of sync, for a company known for showing tough empathy to its workers, who they were ready to fire anytime. Macleand and Clarke (notes 2009) reasoned that to get maximum performance, mutual trust needed to be established between an organization and its employees.
Apple’s corporate strategy was anchored on innovation, thus they were understandably sensitive about any information concerning their products and were very secretive about any information coming out on their organization. This culture of secrecy evolved when Apple realized that details of a product it was yet to launch had leaked into the possession of its competitors (case study). This situation posses the key question, as to if such this culture is something that it has to ‘have’ or was ‘developed’ over time, in regards to its changeability. The mushroom syndrome given to both insiders, and external sources concerning happenings at Apple serves both as an advantage and disadvantage to the company. They are able to create a lot of hype for their products prior to launching, which is great for marketin. It also gave the customers that ‘cool’ factor about owning an Apple product, because they were unique products that had been developed by an enigmatic company. Nevertheless, the consensus was that the level of secrecy at Apple, was on the verge of becoming paranoid (http://www.nytimes.com/2009/06/23/technology/23apple.html). Apple went as far as firing and criminally prosecuting employees it has perceived as having betrayed the organization by sharing any information on current or past projects. Again, this contradicts the ideas of Jobs returning to a flat structure to enable the free flow of information and communication, Although the secrecy, a tighter structure and constant monitoring of their employees gives them better control, and a certain level of predictability concerning the activities of the workers, it also raises concern as how to discern, the internal processes of the company. Reports received from organizations working for Apple in China tell of workers committing suicides allegedly in protest of their working conditions and pay (REF). Such reports can prove to be inimical to the continued profitability of Apple, due to issues concerning corporate and social responsibility. The idea of keeping shareholders and customers in the dark while such stories abound can cause a cessation in relations with Apple, so as to avoid any claims of associating with a company perceived as unethical.
Considering Apple’s operational requirements and its ....demand. It may be recommended that an adhocracy structure should be implemented. Mintzberg (1983) described such structures as having very limited formalization and were highly organic. It functioned by grouping specialists from various units across the organization and deployed them into small project focused groups, that but relied on liaisons between them to encourage mutual adjustment to the overall strategic goal of the organization.
Apple Inc pursues a strategy that depends on its ability to continuously deliver innovative products to its consumers. Implementingng such a strategy requires an organizational culture that provides the flexibility and also allow horizontal integration of ideas across the organization. Individualism is a technologically driven organization requires a culture that will suit with The influence Steve Jobs leadership has had a positive influence at
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