RESEARCH / FINAL PAPER
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Usethistoredit.docxRunning head: MANAGERIAL BEHAVIORS IN DIFFERENT COUNTRIES
MANAGERIAL BEHAVIORS IN DIFFERENT COUNTRIES
Managerial Behaviors in Different Countries
Angela Diaz
12/01/2019
Barry Univeristy
Apple Inc is a US multinational technology organization based in Cupertino, California. Apple designs, develop and sells computer software as well as consumer electronics, among others. The organization is ranked among the most prominent top four tech companies amongst Facebook, Goggle, and Amazon. Apple is one of the biggest electronic companies that “markets and manufactures personal computers, portable digital music player and media devices, and mobile communication." The reason why I picked China and Apple Inc. is that recently, the company has been trying to penetrate the Chinese market, and it has been an easy task. Moreover, most of the Apple products are manufactured in China.
The company sells a lot of products apart from devices; they include varied products associated with softwares, third-party digital contents, network solutions, and peripherals services that can be availed through the company's devices. However, the company has famously known products, including iPad, Macintosh computers, iPhone, and iPod. Macintosh is one of the most famous devices in the company, and it was first developed in 1984. Macintosh was the first computer to apply a graphic user interface that allowed the user to activate the pictures on the device by use of the mouse (Schmidpeter, Stehr, & Huang, 2015). The triumphant story of Macintosh encouraged a lot of development in the computer industry, and all modern computers apply a graphic user interface. iPhone was also the first smartphone the company created. iPhone has similar functionality just like a computer; however, it is small. Apart from acting like a computer iPhone is a mobile phone as such receive calls as well as text messages. Besides browsing and checking emails, the phone also allows it can store music and audio files. The videos can be downloaded into the device as well. One of the popular features the iPhone enjoys is taking the image directly from the device.
Apple is an American company; however, today, the company outsources its product from China. Most people believe that Apple is only operating in China to maximize profit. However, the iPhone cannot be manufactured in the US due to economic reasons- there is not enough workforce to manufacture the products of Apple in the US. There is a factory in China, where the products of Apple, including the iPhone, undergoes the final stage of assembling, has more than 230,000 workers. Contrarily 83 cities in America have the same people as the factory’s number of workers. This implies that there is no possible number of employees in America to meet the needs of the Apple Company.
Moreover, in China, the estimated quarter of the workforce lives in the company-owned dormitories. The barracks are also founded in the properties of the factory. Therefore, a lot of people are not only living in the factory but working there as well. Factory jobs are in high demand in China, and many people can be employed or hired overnight (Schmidpeter, Stehr, & Huang, 2015). The case in America is different because most people do not like unprofessional works. Similarly, this example confirms that the speed, efficiency, and measures of Chinese manufacturing surpasses anything America can deliver.
Besides the workforce China can offer, the material used in manufacturing Apple products is shipped from overseas. A lot of the materials are gathered within a short distance of the final assembly plant. Shipping the products to America can be difficult and costly, leading to manufacturing delays. Also, based on traditional outsourcing and manufacturing, it is expensive to manufacture in the US compared to China (Weihrich, 2019). In the US, workers are paid more compared to China, and this increases the overhead expenses of the organization. In the US, Apple Inc. has to incur costs related to insurances, worker's benefits, and a higher amount of taxes. Therefore, since the organization wants to generate revenue, the added cost is therefore inevitably transferred to the consumer leading to the increased price of goods. As such, American manufactured apple products would even cost more.
“The Apple decision regarding outsourcing its manufacturing to China is about who can build the most number of Apple products within the shortest possible time; as such, China can remain flexible and immediately adaptable to the varied needs of the organization." According to the recent report, the Apple executive stated that America no longer has the people with skills required by the organization. One specific example is the release of the iPhone. There is an increasing demand for the product, and Apple is aware that the product is to be completed in time.
Apple Inc. executives found out that manufacturing the product in the US will result in a lot of delays, and this will affect the market of the iPhone. With this in mind, the organization decided to use Chinese factories that will not only offer labor but skills as well at a faster pace. According to “in China, manufacturers can ask a large number of engineers to work on the required manufacturing overnight. As they have an abundant supply of labor force, this allows them to finish a large capacity of the workload quickly. The US simply cannot employ 250,000 workers overnight. This makes China a flexible and capable supplier” (Schmidpeter, Stehr, & Huang, 2015). It also trues that Apple is reaping financial benefits from China compared to the US. It is due to the presence of a hardworking, skilled workforce in China. People are also willing to accept demanding jobs, and such jobs are deemed standard to a million Chinese individuals, including ones who have technical skills.
Why Apple Inc. is struggling in China
On Wednesday, January 2018, Apple reported the company's revenue. It asserted that the final three months of 2018 would be ten percent lower than the anticipated amount, and the company largely blamed China for the misfortune. "While we anticipated some challenges in the key emerging markets. We did not foresee the magnitude of the economic deceleration, particularly in the greater China," said Tim Cook, chief executive of Apple Inc. Many analysts questioned the company and how it pinned the blame to China; however, it is understandable because the company heavily relies on the world’s biggest smartphone market. Apple relies a lot on China because it’s the world’s biggest smartphone market comprising of the third unit sold globally (Weihrich, 2019). Apple has positioned itself as a luxury and aspirational brand stretching into the country's growing middle class comprising Taiwan and Hong Kong, among other regions. Greater China happens to be the third largest of Apple revenue
Apple has always tried to satisfy the authorities in the market. Apple Inc. had moved its Chinese user's personal data to a $1 billion data center located in Guizhou due to tighter data localization requirements. This happened in 2017. However, the organization has always been affected and blamed for bridging the country's laws and policies, including removing 674VPN apps, which typically protect the users from government censorship as well as surveillance from the China App Store.
Nonetheless, the growth of Apple in the country has been unbalanced or uneven. As per August 2017, the organization has seen 18 consecutive months of revenue declines in China. As a result, the analysts argued that iPhone makers were destined for failure. But the organization responded with growth in the consecutive four quarters.
China’s economic slowdown is hitting smartphones
China's economy has been struggling and slowing through the combination of the weakening domestic demand as well as the fierce trade war with America. Chinese private manufacturing sector offered a negative sign as a result of the Caixin manufacturing purchasing manager’s index reduced or contracted for the very first time in 1 month.” Consumer confidence fell off a cliff in October 2018, the worst it is in 20 years. I have been working on China," said Shaun Rein, managing director of China market research group.
The declining consumer confidence has influenced and hit the mobile market. As a result of eight years of smartphone growth, the unit sales fell for the first time in 2017. According to the report from IDC, Sales continued to deterioration in 2018, and the analyst has asserted that it specifically hit Apple more aggressively. The market is generally going down and more specifically for apple due to growing competition from the local firms such as Xiaomi and Huawei. The local Chinese companies have eaten into the Apple market. Huawei surpassed the iPhone maker for the very first time in 2018 to become the second-biggest smartphone marker such as Samsung (Weihrich, 2019). The Chinese locals sell their products more cheaply compared to Apple company products. Chinese population would be more than glad to purchase the older cheaper version of Apple iPhones than buying a more expensive new Apple iPhone. More so, local Chinese companies have been quicker in response to innovation compared to Apple Inc. For instance, Huawei had included dual sim-card support to their phones for more than a decade now, and Apple only upgraded their model recently.
The China-US trade tension has also affected the apple market and operation of the business in one way or the other. A surge in patriotism from the start of trade battle and mores specifically after the Huawei chief finical officer and following the US extradition request, the consumer has turned to their local brands. Zhejiang based technology organizations explicitly forbid their workers from buying an iPhone and give subsidies to those who are purchasing Huawei products. More so other restaurants give out discounts to those people who use Huawei phones. The effect may be small, but it reflects how Apple is received in China. There is a negative sentiment of the iPhone in the Chinese market.
Character or managerial behaviors
In the United States, planning is done differently compared to China. US Apple company is used to short term orientation in the course of planning. On the other, the Chinese have a culture of applying both short term and long-term planning. In China, the organizations reach a decision with the help of the committee while in the US. The decision is made by individuals.
The Chinese business negotiation culture is based on the large members of the previous studies of both international business negotiation and Chinese negotiation style (Khan, Alam, & Alam, 2015). The Chinese negotiation style is influenced by both traditions and the environmental day to day activities. China government's policies as well as plans to do business influences the operation of most organization china is a socialist country which has an influence on every aspect of the business. Nonetheless, this is quite different compared to the united state where there is limited involvement of the government in the business. The United States has free-market forces which determine the various aspect of the market. Another essential factor that influences negotiation and managerial behaviors in China includes the importance of relationship, emphasis on trust and sincerity, the importance of family as well as age. Age represents wisdom, according to Chinese culture. Above all, any ruler must control the organization through moral persuasion.
There is a common practice in the US where the performance of the new workers are appraised comparatively immediately they are hired if the experience and performance do not meet the expectations of the company the employee is later terminated. As for the case of those who have been working with the organization for a longer time, performance is analyzed at least once per year (Khan, Alam, & Alam, 2015). More so, the performance appraisal is carried out on a short term basis, and the employee contributes a lot to the organizational goals. The differential and the increase in pay basically depends on individual performance.
However, the difference in pay is also based substantially on the level of management more so; promotion is also founded individual performance in the US. Most liberal organizations offer continuous development. Nonetheless, training is typically undertaken with hesitation due to the cost. Then the individual may move to another organization as such most workers are trained in particular functions leading to a “narrow career path." In the US, most workers feel that they might be laid off due to economic recession; as such, they are always insecure about their jobs.
Contrary, in China, people are more dedicated to the companies they serve. In China, a performance review is conducted infrequently. Promotion is not only based on education, ability performance, and family ties, together with good relations influence advancement within the company.
Leadership in the US is done differently; leaders are deemed as decision-makers leading a specific group, and more so, they are expected to be determined, directive, and strong. Leaders are supposed to have diverse values; however, they focus on individualism in society and in general, hinders the cooperation. In the US, managers are supposed to take decisive actions as they clarify the direction taken by the group or the business even if they require confrontation with those who disagree with the decision. Besides managers working hard, they prefer their personal life to be private and outside the limelight. Communication patterns also extend from the top-down hierarchy, and a lot of emphases are given to written communication.
On the other hand, the leadership style in China is more directive. The relationship between the leader and follower can be described as that of a “parent-child” in transactional analysis term. It is expected that the managers or leaders are to be respected or their commands to be obeyed.
Adopting change
In order for Apple to survive in China, it has to change cultural, managerial behaviors. The way the United States runs its business is different from China. In China, the government is actively involved in the running of the business, unlike the US; therefore, Apple had to obey laws and policies of China, such as censorship of information where the state controls the information to be passed across (Apple, 2013). More so, China had to adapt to the cultural leadership of China. China's negotiation to manufacture its product-iPhone stated in 2009, and it took long before the organization was allowed into the country. Chinese people value relationships, and the first negotiation stalled.
Another issue that raised leading to change in management is suicide incidents allegation where the Apple workers in China performed in adverse factory conditions, whereby employees work for 12 days, six days a week. Therefore the organization had to improve working conditions for workers as indicated to the international laws. China’s companies put lesser emphasis on the need of workers as much of priorities are given to the organization. Therefore, just like any other organization, Apple decided to maximize the profit and forget the workers. However, this incident has henceforth corrected.
To further improve the relationship with the country, the company’s CEO Tim Cook signs and apology letter for the Chinese consumer, which highlights the collective importance of the Chinese customer in the second-largest market. Tim Cook said in the letter "deeply reflected on recent 'feedback' on its warranty policies and apologized for misunderstandings created by poor communication with customers" (Apple, 2013). Cook continued, "We are aware that a lack of communications led to the perception that Apple is arrogant and doesn't care or attach enough importance to consumer feedback … We express our sincere apologies for any concerns or misunderstandings; this gave consumers" (Apple, 2013). However, as much as Apple has been trying to comply with the business environment, it is still facing local competitions. Chinese customers and workers are known to be loyal, and at some point, this affects the day to day running of the organization.
The cultural difference has a significant impact on the organization, and therefore a lot needs to be learned — the “US senate anti-discrimination bill endorsed by Tim Cook." The legislature forbids discrimination on the foundation of gender, sexual orientation in hiring employees for a lot of American employers. Cook also states how Apple created "a safe and welcoming workplace for all employees, regardless of their race, gender, nationality or sexual orientation," and he also stressed the rights of workers to express identity at his company (Cook, 2013). This shows that the working environment and respect for workers are given priority based on where the organization is operating its business.
Conceptualization
Some of the managerial behaviors related to Apple Inc. while operating in the US includes decision being initiated at the top and involving few people in the course of making a decision. The US has a decision done in a slightly faster manner, while the process of the implementation stage is always slow. The US has a managerial culture of pressurizing stockholders to display favorable financial ratios every time they report them. Americans mostly stay in an administrative position for a short while, and the blind decision can be made as a result. Since most businesses are state-owned, the plan is made for both short term and long term periods.
The five-year plan is usually made at the top, and a more detailed plan is made at the lower level. In China, the success of the organization is subjective and has nothing to do with the individual. This is why it was reported once that apple is breaking international employment laws. In China, the success of an organization is more valuable than individual needs. That is why there is cheaper labor, and most working condition is not conducive for any worker. In the course of working in china, apple had to adapt to government involvement in the business. Most of the business in the country are state-owned as such, government interference in the operation.
References
Apple. (2013, December 22). China Mobile & Apple Bring iPhone to China Mobile’s 4G & 3G Networks on January 17, 2014 [Press release]. Retrieved from http://www.apple.com/pr/library/2013/12/22China-MobileApple-Bring-iPhone-to-China-Mobiles-4G-3G-Networks-on-January-17-2014.html
Cook, T. (2013, November 3). Workplace equality is good for business. The Wall Street Journal. Retrieved from http://www.wsj.com
Khan, U. A., Alam, M. N., & Alam, S. (2015). A critical analysis of the internal and external environment of Apple Inc. International Journal of Economics, Commerce and Management, 3(6), 955-961.
Schmidpeter, R., Lu, H., Stehr, C., & Huang, H. (2015). Sustainable development and CSR in China. A multi-perspective approach.
Weihrich, H. (2019). Management practices in the United States, Japan, and the People's Republic of China. Industrial Management, 32(2), 3-7.
