Emerging Issues In Strategic Human Resource Management Commerce Essay

This report is based on the case study ‘Apple Inc.’s Corporate Culture: The Good the Bad and the Ugly’. The report tried to investigate and find out what is good and what is detrimental to the organisational culture in terms of Human Resource strategy and practice in Apple Inc. The conceptual investigation was totally focused on Human Resource Management perspective issues of Apple, though the case study has included wide areas of analysis including Apple’s operations, marketing, accounts etc. This theoretical research provides a reasoned and academically underpinned critical analysis as well as provides coherent and justified recommendations for changes to HR strategy and practice in Apple Inc.

Based on the above mentioned case study, this essay reviewed the impact of people (employee) in apple’s magical success as well as it has reviewed the Apple Inc’s management and leadership styles. In the progress of the essay, Apple’s human resources policy is also critically evaluated and detrimental HRM issues are identified. Appropriate models and frameworks also has been identified which could be used for better managing of human resources. Good HRM practices also given credit which they can effectively keep implementing for sustainable future success.

Critical appraisal of the contribution people has made to Apple Inc

People, in organisational term employees have great impact towards organisation’s success or failure. Michigan model (Cited in Price 2007, pp 40) explains that employees are resources in the same way as any other business resource. So exploiting the peoples are crucial as with other equipment and raw material of the organisation.

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Peoples in Apple Inc. have made huge impact and they are the key of company’s success. Its CEO Steve Jobs is the person who has been the figureheads for the company. He is the founder of the company, however after his initial spell with the organisation he had to leave. When he came back after twelve years, he has made Apple most innovative and profitable organisation on earth. He is an iconic figure and everybody wants him around in the company. He is world’s greatest salesman (case study). Apple and Jobs have become synonymous. How one person can make a crisis-ridden company to a world most recognised company, what might be impact of peoples to an organisation, Apple and Steve Jobs would be used as an example surely for long.

It is not only Steve Jobs, apart from him it is peoples who works for Apple made the difference. As the case study suggests, totally awesome team of people working in the company. Everyone is respectful, intelligent and good at executing. Apples employees had high passion and believe in the corporate mission and it was the competitive advantage for the company.

Apple exploits it employees in various roles right from engineering to marketing to operations and sales. People working for Apple feels proud working for the most innovative company and work hard for the company which is phenomenal within the industry.

According to the case study the key people in the organisation are the position of technical, marketing and staff positions. The organisation’s success largely depends on attracting and keeping these peoples.

Redman & Wilkinson (2009) indicates that personal and organisational success is increasingly correlated with the profession of skills. Skilled individuals can command a premium salary in periods of high economic activity. It is the interests of any company to maximise its human resources by investing in the skills of its workforce: its human capital. Price (2007) suggests human capital is a crucial component of an organisation’s overall competitiveness. Companies like Apple where human resources become the driving force in the development of strategy; there is an overriding emphasis on developing their skills and capitalising on their competencies. Apple has successfully focused on the people resources and capitalised it to achieve competitive advantages in the market place.

Apple is acknowledged as the most innovative company within the industry and no doubt, its peoples (management and other employees) has made it world’s top innovative company.

Analysis of factors concerning the management of the human resource in Apple

Factors concerning the management of the human (people) resource vary within an organisation and across situations. The output of any organisation, however it is measured, relies heavily upon market factors which determine how the organisation operates. RDI (2010) suggests, future trends must be identified and the organisation must be able to adapt to them if it is to continue to function in a profitable and effective way. The HRM function must support these strategic perspectives.

In developing a strategic perspective, an in-depth understanding needs to be acquired of the relationship between an organisation’s environment and its people (HRM) strategy. HR professionals must therefore have an understanding of the strategic HRM process in term of people aspects. .

Most organisations are being held back by people issues. They need to be handled with care and effectively. It seems Apple has adopted a balance of Best fit and best practice approaches to manage its human resources. The objective of Apple’s Human Resources is to maximize the return on investment from the organization’s human capital and minimize financial risk. These responsibilities are conducted by human resource managers in an effective, legal, fair, and consistent manner. Human resource management in Apple serves these key functions:

Recruitment and selection, work analysis, training, job rotating, leadership development, performance appraisal, incentive compensation, benefit &profit sharing, employee development, employee security and health, employee relation etc. However some key factors concerning the management of human resource in Apple’s are discussed below:

Recruitment

Apple recruits people with computer based knowledge. Highly selective recruitment process was designed to hire only the best who would fit well to the organisational culture regardless of their experiences. Organisational fitness is more important in Apple than job-fitness. Case study suggests that selection process is a short procedure, where prospective employees’ organisational suitability is measured by verbal interview.

Equal opportunity and diversity

Apple is the equal opportunity Employer and promoted diversity within the organisation. Apples employees are from diverse background. Diversified workforce is one of the positive aspects of Apple’s corporate culture.

Compensation and benefit:

Apple offers various benefits to its employees and its compensation and benefits are very competitive. Benefit package varied depending on location and employment status. The common benefit included insurance coverage, flexible spending accounts, an employee stock purchase programme and a 401(k) saving and investment plan. Product discounts, on site fitness centre, and the opportunity to work on big projects with some of the experienced players in the industry were added bonuses.

Salary and compensation reviews include year-end bonuses, vacation time and other perks and reimbursements.

Apple also offered the FlexBenefits programme to its employees where they could choose benefits that best fit their lives.

Recognition and appreciation

In 1995 Apple created the Apple fellows program in order to recognise the best of its employees who had made extraordinary contributions to personal computing. Each Apple fellow acted as a leader and visionary guiding the company in their particular area of expertise.

According to the case study apple is well known to appreciate and value its employees. It is considered a great place to work for people who are passionate about innovation.

Career opportunity:

Apple’s positive recruitment policy emphasis on candidates’ suitability to suit the organisational culture rather than their skills to fit in a specific position. However opportunities are given to employees to gather skills within the organisation. Opportunities for training and development include internship, on-the-job training etc.

Internship with apple offered real learning experiences that led to prospective careers in diverse fields. Apple attracted most talented people to come as interns, as people valued Apple best place to learn, they joined them and worked for them as interns. They thought once they get chance to work at Apple, whatever basis it is , it would not be a problem for them to find jobs in elsewhere, the fact is that it wasn’t as according to the case study most of Apple’s interns were able to find jobs promptly once they had some experience from Apple.

On-the-job training is applied successfully in Apple. In this casual work culture employees get an opportunity to work with experienced and talented people with no end to challenges.

Employability security:

Apple has no mutual obligation between the company and its employees and the employees should opt for a better opportunity if it came along. Apple is always unapologetic about layoffs and made it clear that the company believed in employability security rather than employment security. The employability security means that an employee after working with apple would learn enough to be attractive to another employer if laid off. Apple emphasis on psychological contract rather than physical contract. Price, (2007) viewed psychological contract as an informal understanding between the employer and employee. Unlike the formal employment contract, this has no physical existence. It is a set of expectations held by both employers and employees in terms of what they wish to give and receive from their working relationship.

Comparison and contrast of the concepts of management and leadership in context of Apple Inc

The effectiveness of any organisation depends upon the structure of the management system in operation, as well as its cultural environment. According to the case study Apple is ranked in the top position for the people management within the industry.

Jobs is a charismatic CEO whose management style has influenced by Douglas McGregor’s Theory Y type attitudes (Price, 2007) who leaves his employee to work on their own, taking initiatives, being self-motivated and tending to work hard.

However when it comes to take final decisions, the case study suggests it is always one person who takes them and it is Steve Jobs himself as well as his job delegation was very selective only to whom he (Jobs) trusted which is named benevolent authoritative style of management by Likert (2009).

One of the problems of management was span of control and information communication gap. As the case study suggests one of the employees said, six different supervisors gave him six different answers and they did not communicate together. Apple’s management coordination is characterised by Japanese centralisation (Torrington et al 2008) orientation – the typical Japanese approach is for strong headquarters group to keep for themselves all major decision.

Steve Jobs is a visionary leader who has who has always identified the need of change and has vision of future desired state. Anon (2002) dubbed him as a transformational leader who has single-handedly turned the organization around and delivered it from crisis when he was called back to the company in the year 1997 after twelve years of his departure. Jobs inspired the employees at apple to come out with unconventional products by thinking differently.

However though Jobs leadership has brought success for Apple, it does not guarantee that same style would work for future leaders. According the case study Jobs leadership in Apple is supported by Great man theory of leadership where he practices CEO centric power. Anon (2008) suggests that he is secretive, controlling, hog credit, makes people cry and parks his Mercedes in disabled spots. In the world of continuous change this sort of leadership is ineffective for long run.

Jobs has been a successful manager who has showed his competency of managing task and people in Apple at the same time though he is a transformational visionary leader but on the other side of the coin he is a autocratic dictator who has been subjecting his employees to tyrannical outburst and fostering a culture of strict secrecy at the company. Apple’s future leader should adopt more integrating style of leading rather than Jobs’ traditional controlling leadership.

Apple’s organisational culture is ingrained by Steve jobs and he has made Apple an ‘Institutional mirror’ of himself. However the company thinks that they would keep operating the same way even when Jobs was no longer there.

As the case study suggest that Jobs put an executive team, trained and groomed in his way of doing things in place to take the company forward in his absence. It seems the scheme is successfully working as in Jobs’ recent six months absence period the company ran smoothly and even Apple’s stock price was up 66%. Steve jobs has put bold management succession plan in place as it is clear after Jobs’ sudden exit, Cook will take over as the CEO. Torrington et al (2008) describe it as individual succession analysis. This process is focused to an informal approach to promote with short-term focus on who would be able to replace senior people if they left suddenly.

However it is not undisputable that Apple is a visionary organisation or Steve Jobs is a visionary leader as some critics thinks they live just in present. Like Boivin, C. & Roch, J. (2006) said “Apple’s leadership are stonewalling; these people, accustomed to the veneer of emergencies, could find no heart or time in their calendars for thinking beyond next month’s products, next month’s programs. Too many Apple people, live only in the present and are so wrapped up in the present, so totally engrossed in fighting today’s battles, that they live unaware of the past and the future. All today, no yesterday, no tomorrow. They weren’t stonewalling on the strategy; the strategy dealt with tomorrow, and there was no time in their calendar for tomorrow.”

Leading and developing effective teams

Though Apple’s work culture is driven by intense work ethic, however it has also another side. In one side we can see a group of eccentric workaholic peoples who work unusually longer hours on the other side we can see that Apple’s work environment is relaxed and casual, which has certainly helped leading and developing effective team spirit. Employees are followed by casual dress code on the job. According to the case study, Apple’s employees think it has funny, brilliant, relaxed co-workers and modern, spacious, beautiful offices filled with comfortable couches. Case study also suggests, employees are upbeat about Apple’s workplace experience and corporate diversity and shared passion. Apple has been able to instil a sense of pride towards its employees.

The work culture at Apple was driven by passion for products and attention to the minutest details. Every department is equipped with smart, creative and hard-working people. The work culture is much more like club rather than family.

Product development team is formed at Apple with peoples from diverse experience background. By hiring innovative people from diverse background, apple was able to incorporate different perspectives and skills and achieve its goal of making the best products on the market.

Teams in Apple work in challenging and creative environment and explored new ways of performing common tasks. Apple provides them ample opportunities to learning and growing. There was amazing level of coherence among the executive teams at Apple.

However rather than team work in apple’s corporate culture encourages individual performance. In Apple, employees had to do their work independently and each individual was his/her best resource. Guidance was occasional. As a company policy employees were not allowed to take note in meetings. Apple appreciated hard working employees and rewarded those who demonstrated their skills and capabilities.

It seems Apple fostering an individualistic culture rather team culture. It selects independent thinker who likes to work alone. Apple created a club/community like environment to motivate and retain employees.

Analysis of HRM problems in Apple Inc and appropriate models to develop solutions

The absence of systematic standard human resource management tools is major problem for Apple. In the absence of well-structured systems and process, the corporate culture became dysfunctional. Many talented people left Apple, because they did not like Apple’s culture. Without systematic HRM strategy which should be aligned with organisational strategy the company will not prosper for long time.

Lack of proper tools to recognition and appreciation

Case study suggests that employee had to look after their career as organisation has no proper talent tracking system. Management did not care about interests of other employees, recognising their hard works. Employees’ innovative product ideas have never been accepted by the company. Though in the early stage employees were appreciated for their work e.g. those who worked for Mac their signature were engraved in the inside of computer case. However it was not the practice later on.

Promotion unfairness

According to the case study unfairness in promotions and overall employee treatment existed at Apple. Apple worked its employees ‘to the bone’ but did not reward their hard work and dedication. Only top executives were rewarded. In Apple, appraisal is not based on contribution to the team and support of others, rather based on individual outstanding performance.

Career progression and development

In a flat hierarchical organisational structure career advancement opportunities were very limited.

Reward and bonuses

Reward is not based on team performance and contribution, rather individual performance and individual effort. The top management seems in Apple is content with their pay. Lower level employees have not got bonuses or pay rise. Even lower level employees do not have stock option though they worked 60 hours per week. Pfeffer (1998) models suggests profit can still be made with higher pay rates if the right pay format is used such as gain sharing , stock options and pay for skills (cited in Price, 2007). When employees think they are fairly rewarded they will show more commitment. Apple’s management must pay attention on this. It is important task for any HRM department to aligning an organization’s payment arrangements and wider reward systems with the business objectives (Torrington et al. 2008, pp. 638).

Long work hours

Apple is criticised for its long work hours. Employees struggle to balance work and family life and Apple was blamed for having no regard for family life. Even the company was sued by its employee on the ground of breaking the Californian labour law.

Adopting a commitment model (Torrington et al 2008) and changing the organisational culture could solve most of the HRM issues for Apple.

commitment model:

Communication: Outlining the direction that the organisation’s strategy is taking and the purpose of any changes. Staffs need to understand why decisions have been before they will cooperate in their implementation. Apple’s top level management’s strict secrecy and rigid mentality must need to be changed.

Ownership: Ownership is encouraged by involving people in decisions and making them responsible for implementing specific action. Steve Jobs himself and his successor must stop taking all decisions without employee involvement and participation. Employee involvement is all about their participation with organizational decision making process. Employee involvement is largely concerned with preventing or alleviating alienation (Torrington et al. 2008, pp. 484). Staffs can be involved within the organization through ownership or empowerment. ABE (2001) HRM study manual suggests that empowerment involves people in the operation of organization, so they feel personal responsibility for their actions (pp. 115).

Emotional Identification: It is more likely in an atmosphere of enthusiasm. This can be created by acknowledgement and encouraging responsibility and recognising hard work.

Performance: Performance assessment and reward structure should be focused on commitment. Apple must put proper performance appraisal system in the place and act accordingly to identify well performing individuals and reward them accordingly.

Change of organisational culture:

Moreover organisational cultural shift is also needed which would change Apple from an excessive control cultural company to a collaborative cultural company. To survive in future transference and collaboration is essential.

A culture that is constantly in pursuit of operational excellence. Good organisational cultures flourish the organisational growth.

Leadership in control cultures is a function of authority, and decision making is tied closely to title and role in the organisational. Such organisations tend to be more hierarchical in structure (RDI, 2010). Apple belongs to this category.

Scholars place a high value on collaboration not just internally, but with its customers and partners. It emphasises the power of teamwork. By collaboration it seeks to be closely in ‘touch and in tune’ with the customer and the market at large.

RDI (2010) hints that leadership in a collaboration culture is role-based, not person or title-based, and authority is situational (dependent on the particular client engagement, project etc). The natural organisational structure of a collaboration culture is cross-functional teams aligned to market opportunities. According to the case study Apple has been subject to the criticism for an organisational culture characterised by Steve jobs’ over controlling, top management strict secrecy maintaining and practice of lack of transference. To attain sustainable customer trust, transference and collaboration are necessary in all levels of the organisation.

Conclusion

It is obvious apple has many good thinks which are strength for the company including strong management, leading, skilled and dedicated people resources. However it is also evident that company’s overall corporate culture is out dated which is characterised by absence of morale and lack of alignment of people with organisational strategy. So change in organisational culture is crucial and should be imminent for sustainable long term success. Future leader’s initiatives to address these issues, their openness to change and implementing changes to the organisation would become vital factor to success. It is also need to be seen whether Apple finds a perfect successor (predictably Cook) for Steve Jobs, a man who has always been well ahead of competitors to create future vision.

It is not drastic change Apple has to go through in near future in terms of its HRM strategy but they must implement some changes which will put the company from ‘one man show’ to a systematic practice. Apple’s existing workforce comprise by 35,000 employees worldwide (case study), however this number is inevitable to increase in future and without proper Human Resource strategy and defined policy it will be difficult to manage a diverse huge workforce. Future leaders and managers must set out a standard HRM policy aligned with organisational strategy addressing all emerging issues of HRM.

Reference

Anon (2002) “Transformational leadership; Organizational change; Management styles”. Review of Transformational leadership in the context of organizational change by Eisenbach, R. et al (1999). Strategic Direction, 18(6), pp.5-7 [Online] Available at: http://www.emeraldinsight.com/journals.htm?issn=0258-0543&volume=18&issue=6&articleid=869238&show=html [Accessed: 19 July, 2010]

Anon (2008) “Leading personalities”. Review of The trouble with Steve by Elkind, P. (2008). Strategic Direction, 24 (11), pp. 17-19 [Online]. Available at: http://www.emeraldinsight.com/journals.htm?issn=0258-0543&volume=24&issue=11&articleid=1747898&show=html [Accessed: 19 July, 2010]

Bovin, C. & Roch, J. (2006) “Dominant organizational logic as an impediment to collaboration” Management Decision, 44 (3), pp. 409-422 [Online]. Available at: http://www.emeraldinsight.com/journals.htm?issn=0258-0543&volume=18&issue=6&articleid=869238&show=html [Accessed: 19 July, 2010]

Likert, R. (2009) Management Operations. Harlow, England: Pearson Education

Price, A. (2007) Human Resource Management in a Business Context. 3rd Edition, London, UK: Cengage Learning EMEA

rdi (2010) “Managing the Human Resource Manual” [Online] Available at: http://moodle.bl.rdi.co.uk/course/view.php?id=168 [Accessed: 18 July, 2010]

Redman, T. & Wilkinson, A. (2009) Contemporary Human Resource Management Text and Cases. 3rd Edition. Harlow, England: Pearson Education

Torrington, D. et al (2008) Human Resource Management. 7th edition. Harlow, England: Pearson Education