Entrepreneurial Health Assessment Of Apple Inc.

Background of Apple Inc.

Discuss about the Corporate Culture for Ultimate Strategic Asset.

It is essential for companies to conduct an assessment of their entrepreneurial health since it helps analysis of the frequency as well as the innovativeness of new services, processes, and products within an organization. This assessment comes along with three key elements of management decision-making which include risk-taking, proactiveness, and innovativeness (Tang, Kacmar, & Busenitz, 2010). It is also important because helps the company in the assessment of its corporate entrepreneurial climate. Following this account, the report presents two crucial elements of the theoretical framework upon which the assessment is based on. These elements comprise the entrepreneurial intensity and the corporate entrepreneurial climate. This report, thus, presents an entrepreneurial health assessment of Apple Inc.

Apple is a company which is committed to enabling the students, creative professionals, consumers, and educators around the globe get best personal computing experience via its innovative software, hardware, and Internet offerings. The organization is among of leading brands in the world offering technological solutions and computer and mobile peripherals among other devices (Apple.com, 2018). It was established in 1976 by the late Steve Jobs and Steve Wozniak. Its headquarters are based in California, USA. It operates in many parts of world where it has units in nearly every nation. In terms of market share, the firm currently has a total of 19.2 per cent in the sales of smart phone, with revenues amounting to about 3.5 billion dollars as of September, 30, 2017 (Apple Inc., 2017). The company has a strong a position in the smart phone market regarding the laptops and personal computers and laptops (Gartner, 2012; Fortune.com, 2018). In other words, Apple has been considered to have recorded a substantial innovative success for the past decade (Johnson et al., 2012). In spite of this innovative success, Apple Inc. has been experiencing severe competition in this market from Samsung, which is its largest competitor.

The concept of innovation is extensive and can be understood in diverse ways. The definitions which most scholars have provided for innovation have been different in relation to their subjects or industries of research. Schumpeter was among the first scholars to impact the theories of innovation that are used today (Gosnar, 2012). Gosnar (2012) adds that he was one of the first economists who placed emphasis on the significance of new products to be considered as factors for economic growth. According to Schumpeter, innovation refers to the way of incorporating the formation of a new product or a new quality of product, the opening of a new market, the capture of a new supply source, the establishment of a new production technology, and a new industry’s organization. There are three major stages in which the technological change process has been incorporated as suggested by Stoneman (2010). They include invention, innovation, and imitation. Gosnar (2012) provided a more detailed meaning of the concept of innovation, where he describes it as the aspect of managing all the activities that occur in the generation of ideas, development of technology, production and marketing of new manufacturing processes or product or equipment.

Market Share of Apple Inc.

The author considers a continuous innovation as an extreme where an existing product goes through marginal shifts without changing the habits of customer. In this case, is likely that the customer may even fail to see such products as new, although the firm may have invested huge amounts of money in the improvement of its existing products. This form of innovation has lower risks as compared to imitation and discontinuous innovations. Dynamically continuous innovation, on the other hand, occurs between the continuous innovation and discontinuous. The risk of changes in the habits of the customers associated with this innovation is not as big as in a discontinuous innovation and not as small as in a continuous type of innovation. By their very nature, discontinuous innovations are discontinuous to every segment of customers, because they are composed of only new-to-the-world products. Such new products appear to be so fundamentally distinct from the products which already exist and are useful in reshaping competition and markets. The risks of changing customer behaviours are the highest in this kind of innovation. Imitation has been deemed to be a stepping stone for making it possible for the companies from lagging nations to take part in innovation (Konig, Lorenz, & Zilibotti, 2014). As noted from Figure 1, this type of innovation has higher risks, just like the discontinuous innovation.

This research employed a qualitative research method where the secondary sources were used to collect the data (Mugenda, 2011). The sources used were both internal and external. In the internal sources, the annual reports as well as company periodicals have been utilized to get the information that is relevant and reliable concerning the concerning the entrepreneurial intensity and climate for corporate entrepreneurship. On the other hand, the external sources comprised the research studies that have been conducted by industry experts, who have provided substantial data and information about the research topic. This data was useful in performing a thematic analysis based on the concepts of corporate entrepreneurial climate and entrepreneurial intensity.

There is an extensive body of research that has been performed on this aspect. Morris (2015) has presented the evidence that the number of times an enterprise acts in entrepreneurial manner determines the entrepreneurship’s frequency. The findings further indicate that a particular person or company has the ability to produce a number of entrepreneurial events for a given time. This concept has been successfully applied to numerous fields within the company, which comprise new processes, products, and service and new businesses (Raymond & St-Pierre, 2010). There is also remarkable evidence that some enterprises may seem to have a higher tendency to act entrepreneurially as opposed to others.

Concept of Innovation

Most of the findings from the existing research also reveal that a growth orientation constitutes the defining characteristic of the entrepreneurship at a company level. In this case, the term “continued entrepreneurship” has been use to explain a tendency of some individuals and enterprises being more entrepreneurial as opposed to others in terms of looking for novel business opportunities continuously (Vaghely & Julien, 2010). There is also another finding that a firm is deemed entrepreneurial if it can develop a “higher than average number of new products or new markets within that industry” (Morris, 2015). Therefore, the company which produces a single entrepreneurial business, like a “spin-off” from their business that is in existence over a long period, does not occur as a particularly entrepreneurial enterprise. Additionally, it has been noted that there is a continued effort in the development of new processes, services, products, and markets among others indicates an enterprise that is highly entrepreneurial. Morris (2015) concludes that the entrepreneurship’s frequency is relative and seems to be varied for a certain period and over the enterprise’s life-cycle.

This aspect has been assessed on the basis of sub-dimensions which include innovativeness, proactiveness, and risk-taking. The concept of innovativeness has been defined as the tendency to develop new services, products and technologies, which include adaptations to the technologies, products, and services that are in existence. The sub-dimension of proactiveness relates to an enterprise’s managerial orientation to seek opportunities and comprises competitive aggressiveness, boldness, and initiative. The concept of risk-taking, on the other hand, implies being willing to commit substantial resources to the opportunities which may not work, while being careful to reduce uncertainties, to ensure that risks are not only calculated but also manageable (Vaghely & Julien, 2010). It is worth to note that the literature from different studies have supported the existence of these three sub-dimensions as a measure of the company’s degree of entrepreneurship. A summary of these sub-dimensions has been presented in Appendix A.

An investigation of the company’s culture is important since it is considered as a means of attracting talent and enhancing employee satisfaction and performance (Flamholtz & Randle, 2011). Apple Inc. is distinctive from other companies in the same industry for being among the first technology firms to exist with the sole aim to serve individual consumers instead of large computers. The company followed its main purpose from the start by making computers accessible for the average consumers since it is the first organization to bring personal computer on the market (Arocha, 2017). Furthermore, the report indicates that Apple Inc. possesses a strong market orientation as a result of its ability to make decisions on the basis of what it considers to be the needs of the customer (Apple Inc., 2017). Thus, this has been a major management support that has led to the success of the company. It is worth noting that the firm has been greatly successful as result of its ability to guess what the customer would wish to have prior to the existence of a market. The demonstration of such an ability to innovate has been evident in the iPad development.

Methodology

It is worth to note that the organizational structure of Apple Inc. is one of the factors that have contributed to its successful innovation. This structure is important as it can lead to the creation of opportunities for the growth of the firm’s business. It can, however, put limits on the manner in which the firm should develop, and thus explaining the need for the organizational boundaries. The organizational structure of Apple Inc. mainly takes a form of a traditional hierarchy, where some core elements are borrowed from other kinds of organizational structures. The findings further indicate that company’s success has been associated with innovation and Steve Jobs’ leadership, though its organizational structure is, in part, concerned with making sure there is management support for this leadership (Apple Inc., 2017). This leadership has ensured that there are favourable working conditions for the employees to enhance their innovative skills. Currently, there are small changes that that the company has made in its organizational structure to meet the demands of its market and industry under leadership of Tim Cook (Meyer, 2017).

The empirical data obtained from the Apple’s annual report reveals that the business operations of the company have been structured into three major categories. They include business support services, hardware, and software. Based on these categories, various divisions of have been provided, which comprise peripherals (digital video displays and Apple TV among others), Macintosh (computers), applications (iTunes, Final Cut Studio, iLife, etc.), and internet services (QuickTime, MobileMe, Safari, etc.), among others. A broadened visual representation of the basic organizational structure of Apple is presented in Table 1 as shown below:

The current research also investigates the key feature of the organizational structure of Apple in line with the benchmarks provided for the Climate for Corporate Entrepreneurship. The research continues to hold that the organizational structure of the company has made it possible for Apple to keep innovating at a faster rate, within the time that is available for them. The evidence from the existing research points out three core characteristics of the organizational structure of Apple Inc. They encompass function-based grouping, product-based category, and spoke-and- wheel hierarchy.

In the context of the function-based grouping, the upper tier of the organizational structure of Apple has this characteristic. It is an element obtained from the functional form of organizational structure. In this case, senior vice president takes care of a business function, and reports to Tim Cook (Meyer 2017). On the other hand, the lower tier of organizational structure of the firm is characterized by product-based grouping, constituting an element that is obtained from the divisional kind of organizational structure. It occurs below the senior vice presidents, where there are numerous vice presidents for different products or outputs. Finally, Spoke- and –Wheel Hierarchy, everything goes to the senior office. Today, things have changed where there is more collaboration among different parts of the firm, like hardware teams and software teams. It has been noted that the vice presidents of Apple possess more autonomy, under the leadership of Cook (Meyer, 2017). Therefore, the current organizational structure of the firm is less stiff, though it still has elements of a spoke-and-wheel hierarchy where its central person is Tim Cook.

Entrepreneurial Frequency

Conclusion

The conclusion of this report can be that it is important for organizations to conduct an assessment of their entrepreneurial health. Through this assessment, the report has assessed the frequency as well as the innovativeness of new services, processes, and products within Apple Inc. The climate of the corporate entrepreneurship has also been assessed. In this case, the report has assesses how well the culture as well as the organizational structure of Apple Inc. has supported innovation and entrepreneurship. The key factors of concern have been the management support; work discretion; rewards or reinforcement; time availability; and organizational boundaries and other specific climate variables.

References

Apple Inc. (2017). Form 10-K: Annual Report 2017 [Online]. Available at https://www.google.com/url?sa=t&rct=j&q=&edata-src=s&source=web&cd=5&ved=0ahUKEwj_xZnJ5tPaAhUHrRQKHcx_BZ4QFghEMAQ&url=http%3A%2F%2Fwww.intent-conference.de%2Fdwd%2F_621%2Fupload%2Fmedia_1856.pdf&usg=AOvVaw1mvLHBOOfsMd8QQm3y7IeA.pdf [Accessed April 24, 2018]

Apple.com. (2018). Apple. Apple. Retrieved 16 March 2018 [Online]. Available at https://www.apple.com/ [Accessed April 24, 2018]

Arocha, J.B. (2017). Getting to the Core: A Case Study on the Company Culture of Apple Inc. Project Paper.

Flamholtz, E., & Randle, Y. (2011). Corporate culture: The ultimate strategic asset. Stanford, CA: Stanford University Press.

Fortune.com. (2018). Apple unveils new perks to attract talent. Fortune [Online]. Available at https://fortune.com/2014/10/02/apple-employee-perks/ [Accessed April 24, 2018]

Gartner. (2012). Apple and Samsung Exploded in Q2 While Blackberry Sales Slid 37% [Online]. Available at https://bgr.com/2012/08/14/mobile-phone-q2-2012-market-share-sales/ [Accessed April 24, 2018]

Gosnar, A. (2012). The classification of innovations: The case of Apple Inc. Master’s Thesis Paper.

Johnson, K. Li, Y. Phan, H., Singer, J., &Trinh, H. (2012). “The Innovative Success that is Apple, Inc.” Theses, Dissertations and Capstones. Paper 418.

Konig, M.D., Lorenz, J., & Zilibotti, F. (2014). Innovation vs. imitation and the evolution of productivity distributions. Research Paper, pp. 1-53.

Meyer, P. (2017). Apple Inc. Organizational Structure: Features, Pros & Cons. Business Management: Panmore Institute.

Mittan, S.R. (2010). Apple: Case Study analysis. Project Report. Western Michigan University.

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Morris, M.H. (2015). Entrepreneurial intensity. Wiley Online Library.

Mugenda, A.G. (2011). Social Science Research Methods: Theory and Practice, ARTS Press: Nairobi.

Raymond, L. & St-Pierre, J. (2010). Strategic capabilities for product innovation in SMEs. A gestalts perspective, Entrepreneurship and innovation, 11(3), pp. 209-220.

Stoneman, P. (2010). Soft innovation: Economics, product aesthetics, and the creative industries. Oxford: Oxford University Press.

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Vaghely, I. P. & Julien, P.A. (2010). Are opportunities recognized or constructed?: An information perspective on entrepreneurial opportunity identification, Journal of Business Venturing, 25(1), pp. 73-86.