Analysis of Leading Innovation and Cultural Change at Apple Inc.

This report delves into Apple Inc.'s innovation and cultural change initiatives. It begins with an introduction to innovation and cultural change, followed by a background on Apple Inc., including its organizational structure and current innovation processes. The report then outlines the macro and micro environmental elements affecting the company using PESTEL and SWOT analyses, highlighting political, economic, social, technological, environmental, and legal factors, as well as internal strengths and weaknesses. Recommendations for leading and managing innovation and change are provided, along with a discussion of the current change processes within the organization, supported by relevant theories. The report concludes with a summary of key findings and insights into Apple's approach to innovation and cultural adaptation.

Leading Innovation and Cultural
Change
1

Contents
INTRODUCTION...........................................................................................................................3
Background of the company-...........................................................................................................4
Nature of organisation- ...................................................................................................................4
Current innovation process in organisation:................................................................................5
Outline of macro and micro environmental elements affecting company...................................7
Recommendation for the company to lead and manage innovation and change......................10
Discuss the current process of change within organisation with the help of relevant theories. 12
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
2

INTRODUCTION
Innovation is the process through which companies bring new ideas, processes, methods,
services or products to expand in the market. Basically it is the process through which a firm
brings in new or improved product, effective and efficient process which lead it to earn more
revenue and profit with less time and cost (Pratt, 2017). The basic objective behind leading an
innovation is to earn more revenue. Innovation is important because it helps in meeting demands
of the customers from the business, it improves the efficiency by making innovations in the
existing process which help in reducing cost (Isaksen and et.al 2018). Innovation helps to attract
more hard working employees as they are interested in advanced companies. It also creates the
brand image in the market as consumers are willing to buy from innovative companies. Cultural
change is the beliefs, values, assumptions and the way through which employees interact with
each other in the organisation. Organisations should create plans so that they can achieve the
desired organisational culture becomes reality. There are many ways to change organisation
culture like practising effective communication, creating value statements, reviewing work
systems, redesigning the ways to rewards and recognition and so on.
3

Background of the company-
Apple Inc. is an American multinational company. It is technology company
headquartered in California which designs, develops and sells electronics, software for
computers and online services. It is considered as one of the biggest five companies in the U.S.
information technology industry with other main companies like Amazon, Google, Microsoft,
and Facebook. Founder of Apple is Steve Jobs, Steve Wozniak, and Ronald Wayne in 1976.It
deals in various industries like computer hardware, computer software, consumer electronics,
cloud computing, digital distribution, media, financial technology etc. During the period of 1984-
1991, Apple launched the Macintosh, the first personal computer to be sold without a
programming language. Macintosh sales were initially good, but began to taper off dramatically
after the first three months due to its high price, slow speed, and limited range of available
software. During the period of 1984-1991, company face the phase of decline and reconstructing.
The success of Apple's lower-cost consumer models, especially the LC, also led to the
cannibalization of their higher-priced machines. To address this, management introduced several
new brands, selling largely identical machines at different price points aimed at different
markets. From 1997 to 2007, company return to profitability. Apple introduced the Apple
Store website, which was tied to a new build-to-order manufacturing strategy (Mesoudi and
Thornton, 2018). From the period of 2007 to 2011, company creates history with mobile devices.
It launched the App Store to sell third-party applications for the iPhone and iPod Touch. From
2011 to present phase, Apple released the iPhone and iPhone 5, which featured improved
cameras, an intelligent software assistant named Siri, and cloud-synced data with cloud;
the third and fourth generation iPads, which featured Retina displays and the iPad Mini, which
featured a 7.9-inch screen in contrast to the iPads 9.7-inch screen.
Nature of organisation-
Apple Inc.’s organizational structure contributes to effective and rapid innovation, which
is a critical success factor of the business in the information technology, online services, and
consumer electronics industries. A company’s organizational or corporate structure is the
combination of workforce groups, resources, and interconnections among these groups and
resources in the business. The organizational design determines how the organizational structure
is developed and managed. The main characteristics of Apple’s corporate structure (a)Spoke-
4

and-wheel hierarchy), (b)Product-based divisions,(c)Weak functional matrix. Apple Inc. has a
hierarchical organizational structure, with notable divisional characteristics and a weak
functional matrix. The hierarchy is a traditional structural feature in business organizations
(Berraies, 2019). The divisional characteristics refer to the product-based grouping within
Apple, such as for iOS and macOS. The weak functional matrix involves inter-divisional
collaboration, while the hierarchy is preserved.
Current innovation process in organisation:
Innovation process is defined as new and existing knowledge in the marketable solutions.
Basically innovation process has the steps which are used to solve the problems, to adapt
changes, to maximise the globalisation, to have competitive advantage, to evolve dynamics of
workplace, to be in touch with the changing needs of customers (Coelho, 2017). There are
various stages in innovation process like:
 Generation of idea and mobilisation – It is the stage where company thinks about new
ideas , it can be for development in product or changes in services for better. After the
generation of idea the idea moves to stage of mobilisation which means it transfers to a
physical location as it is important for the success of idea like Apple has introduced the
idea of ios 14 in their products so that their existing product can get updated.
 Advocacy and screening- It is the second stage in which idea's advantages and
disadvantages are assessed. These two have to be taken place at the same time so that all
those ideas can be wiped our which have lack of potential (Lotem and et.al, 2017). So
Apple also takes evaluation process very seriously because of that it is transparent so idea
of ios14 pros and cons were assessed and evaluated with other ideas.
 Experimentation- It is the third stage in process testing of idea's sustainability is done.
In this who the customer would and for whom the innovation is made. The idea might be
great but it is necessary to satisfy customer's preferences. So ios14 idea sustainability in
the market has been evaluated and targetted customer is new or young generation.
 Commercialisation- It is the fourth stage in innovation process in which organisation
evaluates the innovation is able to solve the problems of customers or not. And analysis
of cost and benefits are also determined. Apple ios14 also used this stage to so that they
get reach to next stage of development and evaluate the cost of innovation.
5

 Diffusing and implementing- In diffusion company finally accepts the innovation and in
implementation structure and resources are set to produce innovation. Innovation of
Apple ios14 also accepted by all the respective clients and business partners as it is
known as final selection and then all the required resources and structures are set for the
implementation of innovation in the product or services (Hosking and Anderson, 2018).
Outline of macro and micro environmental elements affecting company
An organisation is affected by various internal as well as external factors which are
identified by the usage of appropriate theories. Description about external and internal elements
which are or will become significant for the American multinational technological corporation
Apple are provided below:
PESTEL analysis: This is an important framework for identifying significant factors from
macro environment, external elements which introduce change in relation to Apple are provided
below:
Political factors: The organisation has faced political opposition from the US for high
usage of Chinese electrical components in their products instead of manufacturing every part of
their product in America (Brones, de Carvalho and de Senzi Zancul, 2017) . The current political
tension between the American and Chinese governments is showing no reduction signs which is
serious concern for the company as they are depended on cheap labour and comparatively
cheaper equipments from China for producing their products. The change in political relations
between major western nations and China due to coronavirus pandemic is factor which could
force the company to search for other manufacturing sites winch will impacts overall cost of
their product.
Economical factors: As the organisation operates in more than 25 nations with more than
500 stores across the globe, it has to spend huge part of their income on various taxation
expenditure. This along with increase in labour costs across the world are one of the main
economical factors which impact the company directly (Fernando, 2018) . The increase in
disposable income of consumers from south and east Asian nations is an opportunity for change
as the company will receive larger amount of sales from such areas which will help the company
penetrate furtherer into the Asian markets. International competitors such as Samsung
electronics, Dell and Lenovo have successfully launched their own electronic products with
6

latest technology and have been successful in gaining some of the elite consumers from Apple by
investing on sleek design and effective marketing techniques.
Social factors: The company has huge brand value which is embedded in the social
structure where Apple products are seen as status symbols, this image impacts every decision
taken by the company to elevate elite image associated with their company (Flanding, Grabman
and Cox, 2018) . The rise in concern from governments and activists about the growing power of
the tech giant on everyday lives of their consumers has increased public scrutiny faced by the
company. As the necessity of electronic gadgets such as touchscreen mobile and laptops with
special features to conduct specific tasks such as long battery life, good picture quality has
affected the sales, power and essential qualities of their products as growing number of people
are unable to complete their daily tasks without their gadgets (Fragnoli and Palmieri, 2017) .
This will bring change in the company as the society is becoming more attached to their
electronic gadgets with some cases of addiction to such products in the younger generation.
Increase in technological attachment of young demographic will impact all operations of the
company as they need to be improved to reduce technological addiction and stress caused by
continuous usage of their products.
Technological factors: there is a rise in need of cloud computing technology all over the
globe which impacts the technological aspects of the company as this is an opportunity of change
and enhance the cloud computing services offers by the company. This along with growth in
application designing and production sector is a significant element to drive change as the
company owns the second largest application store in the world. Another technological element
which could affect the future of the company is the rise in technological products with AI which
is provided with TV sets Smartphones and voice assistants (Sipe, 2018) . The incorporation of
AI in daily use electronic appliance has opened a new area of technology based market for the
company.
Environmental factors: The batteries used to power Apple products are not easily
disposable and cause high levels of environmental harm which is huge concern for continuously
rising community of sustainable consumers. This has introduced factor of change in the future of
the company as they will be asked to use batteries which are easily disposable. The organisation's
products use huge amount of plastic material which is harmful for the environment and has
7

impacted on the sale of recently launched iPhones as the users feel this will increase climate
harm and contribute to global warming (Steidle, 2017) .
Legal factors: The organisation faces legal changes due to the increase in demand of
regulations which reduce the power concentrated in the hands of the company. Increase in cyber
crime has increased concerns about security of the user's private data in Apple products and
inability of legislative authorities to gain personnel data from the gadgets produced by Apple due
to encryption has given a rise in laws which allow the organisations to share personnel data of
the consumers when ordered by courts and government authorities.
SWOT analysis: The internal elements which affect changes in present time or in future for the
respective corporation are provided below:
Strengths Weakness
 The organisation has skilled workers
from all around the globe dedicated to
working diligently for the company
Thompson 2017) .
 Innovative products offered by the
company to meet the demands of the
market such as Apple watch and Apple
TV are major catalyst for change as the
company is investing in expanding
their products.
 The organisation does not allow the
users to repair their products apart from
the official repair stores of apple which
has reduced the popularity of the
company.
 The organisation does not have a huge
product portfolio unlike their
competitors which can affect the
company in the future (Vom Brocke
and Mendling, 2018) .
Opportunities Threats
 Growing smartphone market in African
nations and developing Asian countries
impact the organisations hugely as they
have new markets for expansion of
their products and services.
 Rise in usage of cryptocurrency is an
opportunity which will bring change in
all of technological industry as various
 Rise of cheaply produced electrical
gadgets from Asian nations are major
threat to the company and have the
potential to introduce change in the
marketing and pricing strategy for the
company .
 The rise in data protection legislations
are threat to the company as the
8

competitors of the enterprise such as
Facebook and Amazon are aiming to
introduce their digital currency
(Fernando, 2018) .
organisation may face lawsuits for
unauthorised usage of personnel data
from the consumer's device.
Recommendation for the company to lead and manage innovation and change
 The organisation needs to invest in finding options for manufacturing their
products other than China which reduce the costs incurred by the company while
lowering their dependency on the country for the production of their goods. This
will help the company manage their productions during any political conflict
between America and China (Flanding, Grabman and Cox, 2018) .
 The company needs to use their internal workforce capacity of skilled employees
to develop products which use AI technology and reduce manual labour from
consumers to stay ahead in the electronic market, gain competitive advantage as
many other organisations are investing in such technology and prosper in the
future.
 As cryptocurrency is the future of the world and despite certain drawbacks this
technological service will soon gain the advantage of common use and permission
from governments around the world, hence the company should focus on
investing in this technology to gain huge returns in the future (Fragnoli and
Palmieri, 2017) .
 There is a requirement to introduce more sustainable power source for charging
their electronic gadgets specially smartphones, in order to gain subsidies from
various governments for green initiative and gain competitive edge in this
increasingly growing pursuit for sustainable technological products.
 Apart from this the company should expand their products in economically
developing nations to increase their income options and enhance their
international presence before cheaper alternatives reach such markets with huge
potential.
 The company needs to build more secure system to protect their services from
cyber attacks and provide their users the most secure system for storing their
9

emotional memories and personnel data (Sipe, 2018) . The company should
introduce cloud computing system with enhanced security measures to gain
competitive edge in this growing market.
Theories of innovation:
Innovation is a crucial process in which organisation plans to bring something new as
well as creative at market place to meet with the requirements of customers in an efficient
manner (Hughes, 2016). In context of Apple, they are highly advanced in terms of technology
and use different approaches to bring new products at market place.
Innovation Matrix:
It is a tool that includes different types of innovation that can be adopt by managers in
order to bring an innovative product in market. There are four dimensions are included in
innovation matrix that are outlined below:
Radically sustaining: Here, some improvements are done in an existing product in an
existing market place. So, it is easy for company to sustain at market place for longer run as here
customers are already aware with the product and services of organisation.
Radically disruptive: At this, a new business model is developed and new and innovative
technologies are developed so it provides an edge to company over other competitors.
10

Incrementally disruptive: Here, organisation bring improvements in current technologies
of organisation that may create disruption in current business functions (Bennett, 2017)In this,
company disrupt its existing function and bring several changes.
Incrementally sustaining: It is the most important strategy of innovation in which entity
bring small changes in existing product and technology so that it can be easily accepted by
customers. There are several companies who are adopting this strategy in order to bring
innovative as well as creative products at market place.
It is analysed that Apple is adopting the strategy of incrementally sustaining as they
bring several changes in the existing product in order to make it more better and advanced. For
this, they execute proper market research in order to know the needs and requirements of
customers and provide them product accordingly.
Discuss the current process of change within organisation with the help of relevant theories
It is analysed that change is really essential to bring changes within organisation in order
to prevent the use of obsoleted technologies and get competitive advantage (Sakdiyakorn and
Sivarak, 2016). For this purpose, kotter's 8 step model has been applied that is discussed as
under:
Creating an urgency: It is initial stage in which managers identify the threats, constraints
that might arise in future and affect organisational performance. In addition, here they also
identify opportunities present at market place for future growth and success. Here, managers of
Apple sought for the support and assistance of key stakeholders of business for growth of
company.
Forming powerful guiding coalitions: In this, managers of organisation bring strong
coalition among team members and also wish to get support of key stakeholders for the success
of overall process of change.
Developing vision and strategy: At this stage, a vision is formulated by managers in
order to provide guidance to human resources of organisation. In addition, they also formulate
effective policies and strategies so that organisational objectives can be achieved (Parés, Ospina
and Subirats, 2017). Here, managers of Apple also communicate vision, mission and strategies
to employees in order to get their support throughput the process.
Communicating the vision: Here, administration communicate the predefined vision to
employees so that they get direction to perform task in an efficient manner. In addition, it is also
11

essential to maintain effective coordination at work place that is essential to attain predefined
objectives.
Removing obstacles: It is analysed that there are several obstacles are faced by managers
while bringing changes in organisational process. Here, managers of Apple are required to
analyse the obstacles in an efficient manner so that whole process can be completed in an
efficient manner.
Creating short term wins: Short term wins are crucial to bring tremendous changes at
work place. So managers of Apple need to create short term targets and assigned it to different
people within company. In addition, they are also required to rewarded individuals for their
contribution towards growth and success of entity.
Consolidating gains: In this, continuous development is achieved by analysing the
growth stories and individual experiences within organisation. It is really essential to keep
employees motivated towards organisational goals and objectives.
Anchoring changes: Here, administration of Apple make sure that changes become a
crucial part of overall culture of company and need to be visible in each and every aspect of
company. Here, it is essential to ensure the support of existing, new leaders towards change.
Kurt Lewin's change management model
Unfreezing: It is the first step in which managers of Apple communicate employees
regarding changes in order to motivate them and get their support for change process. It is
essential to bring readiness among employees to come out from present comfort zone and adopt
new as well as advance techniques to perform task in better manner.
Change: It is the second and most crucial stage in which actual change is introduced
within organisation. In context of Apple, managers execute proper planning, organisation,
directing, controlling in order to bring required changes at work place. Here, they also perform
effective communication to engage employees in the process of change that is crucial for the
betterment of company.
Freeze: It is the final step in which employees of organisation accept changes and work
as pee that so that organisation can attain predefined goals. Here, it is crucial to monitor the
behaviour of employees on regular basis and provide them rewards and other benefits in order to
motivate them (Beech and MacIntosh, 2017). Further, managers of Apple also provide
appropriate monetary benefits such as increment in salary, incentives and more to get support of
12