Running head: APPLE INC. 1
Apple Inc.
Christin Merriweather
Amanda Leal
Andrea Plummer
Kaitlin Swann
Liberty University
BMAL 504 – Leading Organizational Change (Spring D)
18 May 2018
APPLE INC. 2
The most successful and greatest corporations in the world all go through trials,
tribulations and change. One of the most widely known and recognized organizations on the
planet, Apple Inc. is no different. Although Apple has prospered greatly on a technological front,
the organization did not escape roadblocks and challenges along the way. This case study will
demonstrate this through the change process that was required after the release of Steve Jobs and
his leadership abilities in 1985. At the time, Jobs was replaced with CEO, John Sculley, who
took Apple into a new strategic direction.
Currently, Apple is one of the most recognized technology corporations in the world and
is an industry leading developer, creator and seller of mobile communication and media devices
as well as personal computers. Apple also designs and sells innovative software, services,
accessories, networking solutions and digital content and applications (United State Securities
and Exchange Commission, 2017). Headquartered out of Cupertino, California, Apple was
founded in 1976 by Steve Jobs and Steve Wozniak. Apple had humble beginnings. The partners
operated their two-man business out of Jobs’ parent’s garage where they created the very first
Apple computer (Steinwart & Ziegler, 2014). Their initial entry into business began by
combining their savings and talent to produce computer boards that they could sell locally
(Rajaraman, 2014). The personalities of Jobs and Wozniak perfectly complimented one another.
Jobs was outgoing and full of determination with the will to succeed while Wozniak was
introverted and reserved but was a master at building computers and computer software
(Rajaraman, 2014). Soon after the production of the initial computer boards, Jobs realized that
Apple needed to expand by developing products that would be more attractive to a larger
demographic and so began the initial research and development for the very first Apple personal
computer, the Apple II (Rajaraman, 2014).
APPLE INC. 3
After the initial entrance into the market, changes and growth came at a lightning speed
for Apple. By the beginning of the 1980’s Apple employed a staff of engineers and had a
production line that manufactured the designed products. In 1983, John Sculley the former CEO
of PepsiCo, joined Apple as the young organization’s chief executive officer. Sculley
successfully led Pepsi to gain a portion of the soft drink market from brand-leader Coca-Cola
(Kaliannan & Ponnusame, 2014) and it was thought that his vision at Pepsi would work well at
Apple. With Sculley’s entrance also came an intense power struggle. Jobs and Sculley disagreed
on the direction that the organization needed to go. Jobs’ focus was on modernization and
improvement, while Sculley focused primarily on the company’s current products and their
lucrativeness (Kaliannan & Ponnusame, 2014). Eventually Jobs attempted to rid Apple of
Sculley. Sculley called the board of directors into a meeting to discuss the issues between Jobs
and himself. It is believed that the board of Apple actually enlisted Sculley to block Jobs’
tendency to enter into expensive projects with untested products. This instruction may have been
a contributing factor to the board backing Sculley and asked Jobs to be the chairman of Apple
with no executive or managerial responsibilities. This decision began a chain reaction that
ultimately resulted in the resignation of Steve Jobs from Apple Inc. So began the new strategic
direction of Apple and the path to where the corporation is today.
Organization Background
Description of Organization
Today, Apple employs over 120,000 personnel (United State Securities and Exchange
Commission, 2017) and prides itself on creativity, innovation and secrecy to minimize theft
opportunities. What began as a two-man garage business, now boasts $229,234,000 in total
revenue with a gross profit of $88,186,000. Operating expenses include research and
development and general and administrative sales which carry a price tag of $11,581,000 and
APPLE INC. 4
$15,261,000 respectively (Nasdaq, 2017). Apple Inc. operates geographically on practically
every continent and shows no signs of slowing down or capping their innovation. Apple is a
business that is devoted to bringing the best user experience to its consumers through its
pioneering hardware, software and services (United State Securities and Exchange Commission,
2017). Apple Inc. designs and develops operating systems, hardware, applications, software and
services to provide innovative easy to use products to their customers. Their customer base
includes private citizens, small and mid-sized organizations, educational intuitions and
government organizations (United State Securities and Exchange Commission, 2017). What
began as two guys in a garage has become one of the most respected and successful
organizations in the market.
Diagnosis of Current Situation prior to change
Apple exhibited an increase of sales from $800 million to $8 billion during the decade
long tenure of Sculley. Paradoxically, a large portion of the sales surge came from products that
were established under Steve Jobs’ guidance (Kaliannan & Ponnusame, 2014). Sculley was not
heavily focused on innovative products and processes however, he did champion one product:
the Newton. The Newton was designed to be a breakthrough personal digital assistant. The
Newton proved to be one of the biggest failures in the history of Apple Inc. (Kaliannan &
Ponnusame, 2014) and began several failed projects and broken deadlines. Sculley was never
able to fully advance change in the organization. His leadership style was that of a “top-down
approach, he was less open than he should have been to employee feedback. Innovators
accustomed to working in the open and creative environment…were forced to perform in a
bureaucratic system” (Kaliannan & Ponnusame, 2014, p. 26). It was widely understood that
Sculley was not open to change.
APPLE INC. 5
Apple was quickly losing its market share in personal computers, the very thing that put
them in the game. Microsoft was challenging Apple with the release of its Windows Operating
System (OS) for personal computers. Windows OS matched the Apple OS in graphical interface,
and since there was not an innovative vision to progress the technology of the organization,
Apple found itself on the brink of bankruptcy and failure (Rajaraman, 2014). Apple was so
worried about its future that it actually took Microsoft to the United States Supreme Court for
copyright infringement. The Supreme Court ruled that the OS technology was created by Xerox
so Apple could not challenge the use of the technology (Rajaraman, 2014). This was one of the
final straws that caused Apple’s board to part with John Sculley and two interim CEOs and
realize that Steve Jobs is exactly who they needed at the helm.
Change Process
In December 1996, Steve Jobs returned to Apple when the organization purchased NeXT,
the computer company that Jobs created after he left Apple. Over the next ten years Jobs’
leadership helped to recover Apple and aided in restoring it as a market front-runner (Steinwart
& Ziegler, 2014). Bringing Jobs and his strategic direction back to Apple provided the
corporation with an innovative edge over the competition (Steinwart & Ziegler, 2014). Steve
Jobs is often considered a modern transformational leader. He was described as creative,
visionary, and passionate and never lacked innovation. However, it was commonly said that he
was not overly interactive with his employees and rarely empowered those below him. He was
sometimes considered secretive and aloof. Despite some of his personality flaws, the strategic
direction that he took Apple created some of the most significant developments in modern
technology. “As a result of this innovations with NeXT and Apple, Jobs is thought to have
revolutionized at least seven industries: personal computers, animated film, music, telephones,
tablet computing, digital publishing, and retail stores” (Steinwart & Ziegler, 2014, p. 54).
APPLE INC. 6
Part II - Management Interventions
First Management Intervention
Apple was in requisite need of communication, training, and a leadership transformation.
“As a multidimensional concept, leadership is essential in every aspect of today’s organizations.
The dominant logic of Apple was strongly determined by its founder. Jobs offered a vision of the
future that was both inspiring and attractive for Apple people” (Toma, 3012, p. 266). The Jobs
example illustrates how transformational leadership is a key factor in the successful turnaround
of a company.
Recommendations. Jobs displayed an inherent ability to lead, motivate and drive people
to accomplish any given task. He weighed heavily the decision-making process and stressed the
importance of communication. Jobs utilized the implementation of a creative strategy at Apple,
based on entrepreneurship, leadership, organization and innovation. His communication skills
were oriented on face-to-face meetings and his strategy was to place products before profits
(Toma & Marinescu, 2013). He was a firm believer in innovation and consistently provided
intellectual challenges and stimulation for the people at Apple. A forum to express creative ideas
was generated to represent the realization of modernization.
Implementation. The characteristics of an organization reflect the management and/or
leadership within the company. Apple operated as a direct reflection of the ideals created and
disseminated from Jobs. Apple was formulated on a strategy of creativity constructed with the
principles of free enterprise, innovation, leadership and organization (Toma & Marinescu, 2013).
There was a communication and trust barrier within the organization that permeated throughout
the lower and mid-level of management due to the uncertainty or job security. A
transformation/transactional leader was needed to identify a mission, vision, and guiding
principles that motivated employees. Apple was without an identity or ignition of the inherent
APPLE INC. 7
innovative ability to motivate from within and deliver critical thinking to remain competitive.
With the lingering ambiguity of jobs, Steve Jobs provided the fuel to the fire of creativity.
The organization as a whole understood the growing competition of Microsoft and, a
distinct thirst for creativity through innovation was on the horizon. The issues surrounding
Apple were based upon competitors creating and succeeding with a compatible OS to compete in
modern technological productions. Apple needed the right leader to motivate and bring together
the research and developers to give them the competitive edge.
Apple was willing to move in the direction of success, the employees were highly skilled,
eager for a transition and adaptable/flexible for a transformation leader. Apple needed internal
and external motivation to enable the innovative critical thinking necessary to deliver a sense of
accomplishment. Communication, anticipated timelines for research, development, and analysis
to aid in the overall awareness of the scheme of maneuver for Apple.
Within an organization, empowering the people, creates a positive command climate.
The strategy most beneficial would be a bottom-up approach. This systematic process has
emerged as a dominant mode for continuous change utilizing an internal resource allocation
method exploiting the three characteristics of: strategic visioning, overcoming internal resistance,
and sustaining change momentum (Yu, 2013). Strategic visioning is revolution thinking for
product design. Overcoming internal resistance is the ability to overpower the adversity for
initiating a change, this sustainment phase is critical to maintaining the momentum essential to
continued success (Yu, 2013).
Second Management Intervention
Recommendations. The change that is required within Apple is to rectify the structuring
that Sculley left in place and to bring Apple’s focus back on innovation to continue to thrive as a
leader in the markets and get buy-in and commitment from the customers. Although Sculley
managed to boost Apple’s sales from $800 million to $8 billion, this was on the coattails of Jobs’
APPLE INC. 8
efforts during his previous tenure. With Jobs’ return, the task was to accelerate change within
Apple. This included removing the top-down approach of management to a horizontal and
collaborative management framework, increase to innovation, and answer the demands of the
customers.
The change included the arenas of social, economic and customer needs. The first
change process is Jobs’ leadership style and strategic direction. He empowered employees and
gave them the means to have a voice in the organization, which was a 180 degree change from
the previous leadership (Kaliannan & Ponnusamy, 2014). Although Jobs was described as
“unpleasant … [or] ‘all about business’” (Eisner, 2016, p. 190), his vision and big-picture
approach allowed him to rely on his intuition rather than market data to inspire his employees to
take on innovative projects. This internal approach allowed employees to feel a sense of value
and commitment to their work. This leadership style and strategic direction was one of the first
steps in creating the condition for change. In contrast to taking the approach of downsizing to
change the organization, Jobs’ return to Apple was accompanied with an increase in personnel
from his NeXT project and integrated them into the innovation cells of Apple.
To focus on customer needs, the organzization refocused its approach to releasibility and
marketing of the products. When Apple first released its iPhone, the launch was only in the U.S.
and only available at AT&T (Lee & Soon, 2017). This limited customers due to the restricted
service that it could provide, especially to those who were overseas or in a rural area with little
AT&T service. The focus was too internally based and needed to consider the scope of Global
relationships/partnerships because as Jick and Peiperl (2011) points out, if an organization
spends excessive time focusing inwards or too locally, their narrow view can ultimately lead to
becoming obsolete. With the iPhones being locked to this network and solely controlled by
Apple, it created resistance within the potential customers. This resistance was in the form of
APPLE INC. 9
hackers ‘Jailbreaking’ the phones so that they could be utilized on other cellular service carriers
and in other countries. The power struggle of Apple’s secrecy and limited release, had many
believing that there was a shift from their initial vision of being innovative and individual to a
more oppressive, domineering, and enforcing compliance based organization (Lee & Soon,
2017).
Implementation. Jobs was able to implement this change based on a vision he created; a
vision of the future that was inspirational and attractive for Apple employees and stakeholders
(Toma & Marinescu, 2013). He was able to choose “the best people possible, encouraging them
and creating an environment in which they could do great work” (Eisner, 2016, p. 190). The
increase in employees continues to grow as steadily as the increase of projects and innovative
products created. The competition is focused on challenging the products that Apple releases and
attempted to overtake the market in the areas of music, movies, cellular telephones, and
computing.
To implement customer change, Apple will have to continue its innovation, but also find
a way to lower their costs. The iPhones, MacBooks, and other products on the market are being
challenged by an equitable force from competition at a more reasonable price. Although Apple
products are cross compatible, Apple will have to continue to grow. Apple created many loyalty
licensing agreements and ventured into the realm of major banks and credit card providers to
expand its capabilities and as Xu (2017) remarked, this “will continue to give Apple competitive
advantage in the mobile payment industry” (p. 178), but their competitors are not far behind. For
instance “Google’s Android platform technology has reached 80% market share by licensing”
(Xu, 2017, p. 178). Apple needs to continue innovation and plan for the future state of the
markets and technology.
APPLE INC. 10
Furthermore, to answer the stakeholders/customers need for a change, the answer is
simple; create a venue where they are given an opportunity. The Apple’s share at the time of
Jobs return was only 5%. To increase this number, Apple opened retail stores, giving the
opportunity to ‘test drive’ the new products (Rajarman, 2014). This opportunity and the release
to more than AT&T skyrocketed sales and created “brand loyalty.” This “brand loyalty remains
an important concept. However, the methods by which such loyalty and its positive
consequences may be propagated are now focused on service-dominant logic, customer
engagement and the co-creation of value” (Lee & Soon, 2017). Apple must continue to keep
their products relevant to the customers as the world evolves and they must ensure that over the
next decade, the organization looks intoexplores other arenas where the customer will be
satisfied. This will prevent the resistance as seen with the Jailbreaking of the earlier iPhones.
Third Management Intervention
Recommendations. The previously-mentioned change effort turned out to be an
incredibly successful venture. Jobs’ innovative visions over the next ten years brought forth
iconic products such as the iMac, iPhone and iPad. Ultimately, his leadership restored Apple
Inc.’s status as a market frontrunner. Jobs rid Apple of the top-down management approach of
Scully and communication with the employees became horizontal and collaborative. As these
were the change effort’s objectives, it was deemed an overall victory for Apple (Toma &
Marinescu, 2013). While there were clear, positive changes that have been successfully
implemented in Apple, by focusing on customer needs, social, and economic processes, there
will need to be continued changes and innovations happening to be able to sustain their position
in the market going forward.
Implementation. The objectives of the change effort were to become a market
frontrunner by creating cutting-edge technology in a work environment that encouraged
creativity, hard workers, and ingenuity (Toma & Marinescu, 2013). Apple used many change
APPLE INC. 11
effort concepts found in Jick and Peiperl’s book, Managing Change (2011), to increase the
success of their efforts. This included the organizational structure of Apple, sharing competitive
information, and changing the customer experience.
Changing the organizational structure was the most obvious of these changes, and
arguably the most important (Jick & Peiperl, 2011). This kind of change can involve redefining
roles, incentives, or, as in Apple’s case, hiring on a new “type” of employee. When Jobs brought
people over from NeXT, they were able to change the structure of Apple by increasing and
putting focus on innovation (Kaliannan & Ponnusamy, 2014). Jobs also used the concept of
sharing competitive information to kindle dissatisfaction and a new unified goal for the team.
When Microsoft became a huge competitor for Apple, Jobs was brought back on board to use his
newest ideas to go head-to-head with this new technology (Rajaraman, 2014). Talking openly
about competition and tackling it head-on is the most effective way to overcome conflict and
helps build trust and comradery within the employee base of an organization. It gives everyone a
unified goal (Jick & Peiperl, 2011). Finally, Apple used the concept of changing the customer
experience to their benefit. The customer experience is everything the customer experiences in
relation to the organization. Apple products, being at one time difficult to purchase due to
limited releases, were now available across the market, allowing people to become more familiar
with the product in general (Lee & Soon, 2017). Apple’s use of these management concepts
made the difference for them, allowing them to be the big name they once were in the technology
market.
While the change efforts of Apple were successful, ultimately, Apple will need to become
more competitive cost-wise if they are to sustain their position in the technology market. With
the recent loss of Jobs, Apple must not become complacent and think that brand loyalty will keep
them relevant. While this may be the case in the short-term, Apple cannot expect to keep their
APPLE INC. 12
customers without the cutting-edge innovation that originally won them over. Every year there
emerges new companies and new products creating smartphones, laptops, desktops, and other
technology that competes with Apple on every level and comes at a lower cost to the consumer.
Conclusion
The most efficient and effective corporations in the world experience adversity and
transistional phases through the change process. While Apple had flourished significantly
through technological advances, the organization faced significant challenges along the way.
This case study demonstrated the trials and tribulations of the change process initiated by the
transformational leadership and characteristic traits developed and practiced from Steve Jobs.
References
Eisner, S. (2016). The "in-factor": Signature traits of innovation's leaders. Journal of Applied
Business Research, 32(1), pp. 185-200. ISSN 0892-7626, ZDB-ID 11075557
Jick, T. D., & Peiperl, M. A. (2011). Managing change: cases and concepts (3rd ed.). New York,
NY: Irwin/McGraw-Hill. ISBN: 9780073102740.
APPLE INC. 13
Kaliannan, M., & Ponnusamy, V. (2014). Apple was sweeter when Steve Jobs held sway:
Company illustrates contrasting attitudes to organizational change. Human Resource
Management International Digest, 22(4), pp. 25-28. doi:10.1108/HRMID-07-2014-0084
Lee, M. S., & Soon, I. (2017). Taking a bite out of apple: Jailbreaking and the confluence of
brand loyalty, consumer resistance and the co-creation of value. Journal of Product &
Brand Management, 26(4), pp. 351-364. doi:10.1108/JPBM-11-2015-1045
Liebowitz, J. (2015). Steve jobs: IT creative genius. IT Professional, 17(3), pp. 68-69.
doi:10.1109/MITP.2015.35
Nasdaq. (2017). APPL company financials [Data File]. Retrieved from
https://www.nasdaq.com/symbol/aapl/financials?query=income-statement
Rajaraman, V. (2014). Steve jobs — who blended art with technology. Resonance, 19(10), pp.
917-935. doi:10.1007/s12045-014-0108-9
Steinwart, M. C., & Ziegler, J. A. (2014). Remembering Apple CEO Steve Jobs as a
"Transformational Leader": Implications for Pedagogy. Journal Of Leadership
Education, 13(2), pp. 52-66. doi:10.12806/V13/I2/R3
Toma, S., & Marinescu, P. (2013). Steve jobs and modern leadership. Manager, 17(1), pp. 260-
269. Retrieved from http://manager.faa.ro/en/article/Steve-Jobs-And-Modern-
Leadership~741.html
United States Securities and Exchange Commission. (2017). Form 10-K [Data Sheet]. Retrieved
from http://secfilings.nasdaq.com/edgar_conv_html%2f2017%2f11% 2f03%
2f0000320193-7-000070.html#FIS_BUSINESS
Xu, X. (2017). Platform licensing for electronic commerce ecosystems. Journal of Electronic
Commerce Research, 18(2), pp. 177-188. ISSN 15266133
Yu, H. H. (2013). Decoding leadership: How Steve Jobs transformed apple to spearhead a
technological informal economy. Journal of Business and Management, 19(1), pp. 33-44.
ISSN 1535-668X, ZDB-ID 25947394
