Risk Assessment Report: An Analysis of Apple Inc.'s Risk Exposure

This risk assessment report meticulously examines the potential risks faced by Apple Inc., analyzing various aspects of the company's operations and strategies. The report delves into the pressure points stemming from the company's growth, including performance expectations, expansion rates, and the impact of employee experience. It further investigates cultural pressure points, such as reward systems for entrepreneurial risk-taking, executive responses to negative news, and the level of internal competition. Additionally, the report assesses risks related to information management, including transaction complexities, diagnostic performance gaps, and the degree of decentralized decision-making. Through this comprehensive analysis, the report aims to provide a clear understanding of Apple Inc.'s risk landscape and potential vulnerabilities. This document is available on Desklib, a platform offering valuable study resources for students, including past papers and solved assignments.

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Introduction
A risk assessment report is aimed at measuring or determining the level of risks that an
organization is exposed to. The operations of the company and the way a company is led are
some of the common factors when it comes to assessing the risks of an organization. When the
vulnerability of a company to a particular issue is high, the risk levels are high as well. The
report will concentrate on Apple Inc. as the company whose risk levels will be assessed. The
operations and strategies of the company will be used to determine if the company is exposed to
high levels of risks or not. At the same time, the ways in which the company has responded to
different issues will be utilized.
A. Pressure points due to growth
a. Pressure for performance
At Apple Inc. the pressure for performance is high, but the risk levels are low. Appraisals
have been made a routine at Apple, and that means that all employees must perform in line with
the desires and expectations of the company. The company uses 360 feedbacks as the tool for
measuring the performance of the employees. Immediately after the company hires an employee,
he or she is introduced to the goals of the company with the intention of making sure that the
employee works hard towards meeting the goals (Khan, Alam, and Alam, 2015). Therefore, it is
evident that an employee knows what he or she is supposed to do to reach the organizational
goals. The pressure to perform is in most cases dictated by the methods of measuring the
performance of the employees (Lockamy III, 2017). The techniques used to measure the
performance of the employees can be harsh or tender on the employees. Performance appraisal is

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a method that gives an employee no other choice but to perform and that is why there is pressure
to perform at Apple Inc.
The risk of pressure for performance increases when an organization cares more about the
performance of the employees than their well-being. Apart from Apple Inc. having strict
methods and tools for measuring the performance of the employees; the company also assists the
employees to reach the organizational goals (Hofmann, Busse, Bode, and Henke, 2014). Training
and coaching have been made part and parcel of the company's activities. The employees are
equipped with all the essential resources and skills to become good performers. When the
employees are trained to be the best, it is likely that despite the type of performance
measurement tools that are in place, their performance will always stand out. Therefore, the risk
to pressure for performance is low because the employees are equipped to stand any pressure that
might be present at the company.
b. Rate of expansion
Apple Inc. is one of the largest organizations in the world, and the company has reached
many nations. Therefore, the risks levels as far as the rate of expansion is concerned are low. The
risk for the rate of expansion is measured by looking at the trend of the company when it comes
to expanding its business. Despite the fact that Apple Inc. is a company that was started in
California, today the company has a manufacturing plant in China. Apple Inc. has expanded all
over the world in two different ways. The first way is associated with its physical presence in the
respective nations of operation. Today, Apple Inc. is operating in nineteen countries. In the
nineteen countries, the company has Apple Stores where the customers access the stores
physically and meet the workers and sellers of Apple products. The company has also expanded

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to different nations using the internet. In the modern day, the expansion of businesses is no
longer looked from the perspective of being physically present in a location, but the number of
customers that the company reaches using the technology is factored in (Etzioni, 2018). At Apple
Inc., it is easier to order products of the company on the internet and later access them through
the shipping companies. Apple Inc. is reaching millions of its customers using the technology,
and that means that the company has also expanded in terms of sales and serving a wider range
of customers.
c. The inexperience of key employees
The risks level of Apple Inc. as far as the aspect of inexperienced employees is concerned is
low. Different reasons can be used to explain the risk levels in this case. Inexperienced
employees are spotted from the first time they enter the company's premises. The only way they
can access the company's workforce is by passing through the recruitment team without being
detected. Apple Inc. is one of the organizations where getting a job is a hard task, and this is
because the company looks at specific details of an employee before hiring him or her (Clarke
and Boersma, 2017). Apple Inc. is also one of the companies that have maintained an upward
trend when it comes to innovations. The company uses Lean management, and this is why it
continuously makes changes to the products that it sells (Fujita and Hamaguchi, 2016). The
second way to know if a company has inexperienced employees is by looking at the performance
of the employees and the products that are released in the market. It is no doubt that Apple is one
of the best organizations when it comes to manufacturing some of the best products as far as the
quality aspect are concerned. If Apple Inc. was hiring employees who were inexperienced, it is
evident that it would have faced the demise of Kodak. The continuous success and innovations at

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Apple Inc. are an indication that the company has no risk of having inexperienced employees
working in its plants or stores.
B. Pressure points due to culture
a. Rewards for entrepreneurial risk-taking
One of the reasons why Apple Inc. does not advertise most of its posts is because the
company chooses to promote the employees who understand its culture and operations. The risk
level for entrepreneurial rewards at Apple is low. The risk levels when it comes to rewarding are
dictated on how the company rewards its employees who burn the midnight oil to meet its goals
and objectives (Etzioni, 2018). When the company fails to reward its employees, it raises the
risks levels, but when it rewards its employees, it reduces the risks levels (Nwogugu, 2015). The
company makes sure that employees who demonstrate that they are outstanding in their
performance are rewarded handsomely. The company uses promotions and gifts as its methods
of rewarding the outstanding employees.
b. Executive resistance to bad news
In January, Apple Inc. faced a challenge that it was supposed to solve for it to save the
reputation of the company (Taulli, 2018). The delay of some of the products led to many critics
attacking Apple and specifically Tim Cook. The critics argued that Apple was losing its way and
it was headed down the tunnel. The bad news had an effect on the company, and this is because
they attracted a debate on the media as well as on the social media. However, the way the
management handled the bad news stood out (Clarke and Boersma, 2017). Instead of answering
to the critiques with anger, the CEO assured the customers that the problem was indeed present,
but the company was handling it. All managers at the company handled the issue as an issue

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affecting the entire organization and not just an issue affecting the CEO. Therefore, it is evident
that the risk levels at Apple Inc. as far as executive resistance to bad news is concerned are low.
The main reason is that the company's executive did not deny the bad news, but it accepted and
promised to take appropriate actions.
c. Level of internal competition
Apple Inc. is a company that promotes competition, but it focuses more on competing with
the competitors and not employees competing with their fellow employees. Teamwork at Apple
is essential, and that is a lesson that is taught as soon as the employees are welcomed to the
workforce (Dudovskiy, 2018). Therefore, the risk level of Apple Inc. as far as the aspect of
internal competition is concerned is low. Apple Inc. discourages high levels of internal
competition in different ways. First, it has a culture that emphasizes the need for all employees to
work together to attain the organizational goals (Cohen, 2015). When the employees get an
opportunity to work at Apple, they are taken through training. The training sessions help the
employees to know the best ways to deal with job issues, utilize their skills, and how to make
sure that they work with their colleagues to attain the organizational goals (Petersen and Lemke,
2015). When an organization takes the initiative of making sure that employees work together, it
is an indication that the company is trying to show the employees that their contribution to the
organizational goals matters more than competition among themselves.
Second, Apple assigns teams to different responsibilities. A good example can be seen in the
development and designing of products. The designing teams discuss the designs and deliberate
on their usefulness before a final decision can be reached (Clarke and Boersma, 2017). When
participation of all employees is promoted in a company, it is no doubt that the employees are

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discouraged from competing among themselves (Nahum, 2016). As a result, the risk levels
decrease, and this is because the organization is more interested in seeing the employees helping
each other out to reach the organizational goals than the employees competing to reach their
personal targets.
C. Pressure points due to information management
a. Transaction complexity and velocity
The risk level to transaction complexity and velocity is high at the company, and that is
because of the process involved with the transactions (Kodama, Yasuda, and Hirasawa, 2017).
At Apple, transactions must go through different stages for them to be approved. Therefore, it
means that a transaction may take longer than it needs to. When a transaction takes longer to be
completed, there is the issue of delayed goals and operations. The success of a company depends
on its operations (Bettini, Watkins, Guerra, and Price, APPTHORITY Inc., 2014). Therefore, it
means that if the operations are delayed, the organization’s success is delayed as well. With this
in mind, it is evident that complex transactions and velocity exposes an organization to risks that
might come at a cost.
b. Gaps in diagnostic performance
The company has a mechanism in place that helps to measure a condition when it is present
and when it is absent. Therefore, the risk levels to diagnostic performance are low. A company
ought to have mechanisms in place that helps it to understand the situation at hand (Etzioni,
2018). It is for this reason that organizations that do not have such mechanisms and tools are
exposed to risks of not knowing about the presence or absence of conditions at the organization.
c. The degree of decentralized decision making

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The CEO of Apple Inc. is the senior employee of the company, and he is the person entrusted
with the decision making process at the company. Before any report or statement leaves the
company, it must be approved by the CEO. During times when the company has faced issues that
needed a response, Apple never depicted that it is divided. The degree of decentralized
information is high when the company shows that the decisions are made by more than one
person (Al Ayubi et al. 2016). In an organization where the CEO is the senior decision maker,
the degree of decentralized information is low. Apple has faced the issue of supply chain a few
times, and there is no point that the statements about the issue came from two different persons.
Whenever a manager speaks, he speaks the same language as the CEO (Meyer, 2018). Before the
decision can be communicated to the public, the company makes sure that it is the decision that
has been agreed on by every person. Therefore, the risk levels as far as the degree of
decentralized information is concerned are low at Apple Inc.

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