According to Fortune magazine Apple has been named the most admired company in the US in 2008…
According to Fortune magazine, Apple has been named the most admired company in the US in 2008, expanding its reputation throughout the world from 2008-2012. However, the popular giant organisation has being critsized widely for it’s contractor labour practices, business practices as well as Apple’s own environmental approach. This essay will analyze Apple in two different perspective theories which will help us understand the practices in a better context; these two perspective will be the modernist and the Critical theory.
The modernist organization theorist thinks that having a grasp over knowledge over how well they understand how and why organizations work the way they do and how their functionality is affected by the ever-changing environmental conditions. Organizational problems are identified so as to come up with more efficient and effective ways for the organization to improve its profitability and have a competitive advantage. In addition, the modernist theorist thinks that successful organizations are able to cope with pressures internally and externally, develop basic competencies, increase productivity and being adaptable to change.
The Critical Theory perspective is actually a somewhat opposite approach of the modernist theory. It is introduced to critique the unfavourable working conditions for the workers in an organisation. Although critical theorists claim it is important to observe and interact with the world, they also believe one must be able to examine and approach problems in order to come up with solutions (Rucker, 2012) Critical theorist also feel that the modernist way consider labour power is a commodity because they use people to to generate financial gains. The critical theory also states that there are unequal power in the workplace where there is control and domination by the managers with authoritative power.
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There are three different theories to power, control and conflict in an organisation. According to (Weber, 2001), he thinks that legitimate power is hidden within hierarchy. For control, it is usually exercised by the organisation and it is assumed that the decision maker agree about organisational goals. Finally, for conflict, organizational decision makers are usually faced with competition, scarce resources, interdependence. This usually leads to the conflicts as the one holding powerful positions would tend to make their own decisions for their own benefits to safeguard their position. This becomes a political behavior by individuals. However, self awareness of the individual would usually lead them to align their interests with that of the company’s that will in turn benefit the organization objectives at the same time.
Modernist theorists hold the concept of control using bureaucratic theories. It makes use of authority to set certain regulations, rules, standard procedures to obtain a certain kind of control over its employees. It also usually engage in differentiation and departmentalization. The modernist theorist strives to improve efficiency and effectiveness at all times by having control on information, surveillance, rewarding of employees and a contract to protect the interests of both sides. Clan control theories approaches are also used to influence employees through group behavior and to establish culture within groups. Finally, they also hold the belief that conflict in organization is counter-productive and should be managed by those in power to maximize performance.
A critical theorist believes in the social, economic and political structures and ideologies play a part in affecting the organisation. It also challenges the owner’s right to profit-favours democracy. It also criticizes the system showing signs of exploitation, domination, resistance and miscommunication. It tries to frees dominated groups and develop more democratic and humanistic forms. It believes that employees of an organisation usually give consent to their own exploitation through a false sense of consciousness. Finally, it feels that conflict is an inevitable consequence of capitalism and is necessary for resistance.
When the two different individuals have different perspective, disagreements tend to occur. The disagreements are further aggravated by the miscommunication or the attitudes of different individuals. This usually results in one party trying to gain an upper hand on another.
A modernist theorist keeps conflicts under control by assigning power and authority to an individual to manage such problems. The formalised methods, rules and regulations by organisations also assist in helping to reduce conflicts at work. With lesser conflicts occurring at work, performance, productivity and efficiency is greatly improved.
In comparison, the critical theorist supports conflicts as it shows a form of resistance towards the power in the organisation. With conflicts, improvements could be implemented and this could increase work productivity as well as a sense of worker’s satisfaction. Conflicts are viewed as beneficial in this case as workers are entitled to their own opinions which in turns help motivate the worker’s morale and induce creativity in them.
Organization structure and physical structure
The organisational social structure refers to the relationship people share within an organisation. This structure is believed to be used as a tool to control organisational outcomes. It also represents the way people interact and exchange information and data which improves the efficieincy of the organisation. The physical structure refers to the spatial relationships between physical elements of an organisation linked to its buildings and the places they are located at.
Modernist and Critical theorist share similar ideologies about the organisation and physical structure as they help employees achieve maximum productivity which increase efficiency. However, there are certain views that are between Modernist and Critical Theorist that pales in comparison.
Modernist theorist usually try to look for high levels of performance which they believe is linked to statistical relationships between dimensions of structure and performance they could develop a successful strategy. They follow the organisational practices and regulations by adopting the ‘Mechanistic’ structure (Burns & Stalker, 1961), which implements conventionalism and customary practices through guidelines. With positions and ranks to determine authority, this usually creates a sense of control over employees to achieve beneficial profits (Clegg & Haugaard, 2009). This structure is usually modelled on successful governing organisations to be used as a point of reference. As for the physical structure, the modernist perspective believes that lighting, music, temperature and a few other physical factors affects employee’s productivity.
Critical theorists states that organisation and physical structures are required as the organisation would not be able to function normally without a proper structure and hierarchy. However, they see it as a way to implement and maintain control over employees. (Hatch and Cunliffe,2006). Critical theorist holds a different opinion in comparison to the modernist view on ideology as it feels that the modernist approach tends to exploit workers. They strive to enable the employees to be able to voice out against the management who make use of employee’s efforts. The critical theorists prefer to rely on the “Organic” structure (Burns & Stalker 1961) as it ensures flexibility, creativity and and tends to be less formalised.
Apple represents a significant part of modern culture in today’s context. However, culture is a make-believe approach and does not really affect the company as a whole. Nonetheless, Apple makes full use of this approach to successfully manipulate culture to ‘please’ customers and profit off them.
Analysis of Apple in Theoretical perspective
The two perspectives are used to define Apple’s positive outcomes of its successful business model and understand its shortcomings. Mordernist and critical theorist have different approach on power, control, perception of organizational and physical structures of organizations. Therefore a comparison between the two theories will allow us to have a better understanding of how a big organization like Apple operates.
Apple is considered one of the most successful companies globally. It is considered one of the most iconic brands around the world. Their success did
not come until the introduction of iMac, iPhone and iPad series. In the modern world where people cannot live communications and networking, speed is an important factor which determines the consumer’s choices. Apple has managed to meet the consumer’s expectations of speed with an added advantage of its products being user-friendly.
Modernist theorist feels that Apple is the perfect example as it sets a standard for other companies to model after. It has been discovered that Apple has eanings of over $400,000 in profit per employee. That is more than other global organisations such as Goldman Sachs, Exxon Monil or Google in 2011 (Duhigg & Bradsher, 2012). With the tremendous amount of profits, it usually means the company is doing well according to modernist theorist. Apple’s values of having a clear direction, individual accountability, sense of urgency, constant feedback and clarity of mission has helped to benefit them financially as well as winning the admiration of other organizations.
Apple’s operating procedures at first had proper power and control just like any other organizations. This shows that they followed the hierarchy and implemented a bureaucratic system for the employees to adhere to. Apple believes doing this will enable to employees to improve into an elite workforce. However, when Steve Jobs became CEO, he introduced a different concept to the organisation. There were still power and authority at work but this was rearranged to keep the employees motivated at work.
Apple also introduced the “Direct Responsible Individual’, meaning that there were no confusion to the responsibilities of the individual that were assigned to handle as it was detail-orientated. Everybody is responsible for their own actions therefore the employees could take pride in their work. However, the control still works in a bureaucratic manner without compromising the flow of communication, therefore respecting the hierarchy of the organisation. (Clegg & Hauggard 2009). This in turn helps to boost Apple’s reputation as a professional and reputable company, giving rise to their stock prices that appealed to buyers.
Apple has always outsourced its manufacturing procedures to foreign countries; This has enabled them to source for lower paid workers who were more than willing to take up the repetitive and tough jobs compared to their counterparts in America. They chose china because of its large population and cheap labour, with an average hourly rate of US $1.57 in 2008 (Froud, Johal, Leaver & Williams, 2012). They were able to produced on a massive scale with the large manpower working in its China factories. With the low production cost per unit, Apple’s gross margin per unit sold was high, raising its stock market value rising up to $343 billion (Froud, Johal, Leaver and Williams, 2012). Organizations around the world are now following in Apple’s footsteps by outsourcing their manufacturing procedures to other countries hoping to gain a higher profit margin.
Critical theorists criticize Apple’s operation approach as it feels that all it cares about is its profits and does not consider the needs of its employees. Although Apple claim to put less pressure and allow its employees to improve their creativity on by introducing the “Direct Responsible Individual’, Critical Theorists feels that the organisation is just making use of the employees ideas without giving them the due recognition or financial benefits generated from their own ideas. So the critical theorist is suggesting that Apple’s approach to ‘organic’ structure (Burns & Stalker 1961) is used just to exploit and control their workers by allowing them to feel a false sense of fulfilment.
Critical theorist also question Apple’s decision to outsource their manufacturing process to Foxcon. They feel that workers were exploited by the low wages and long working hours. Dangerous work environments with routinized procedures to adhere to further aggravate the working conditions for the employees of Foxcon. This has allowed Apple to reap tremendous profits at the expense of the worker’s wages and poorly constructed work environment. All these factors contributed to the unexpected suicide cases due to what employees have to face at Foxcon. Although Apple released a statement that it will try its best to improve the working conditions at Foxcon, critical theorists have doubts about their claims and believe they will continue to exploit their workers.
Apple and its environment
The organizational environment is external factors that will affect the organization. (Hatch & Cunliffe, 2006) The environment plays an important part for Apple’s growth and sustainbility as it is a big organization.
Modernist oversee the environment by observing and approaching it systematically and technologically. By relating to Apple, the organisation separates itself from its manufacturing facilities in China although it uses these resources for their input process. The products produced by the factories would then be sold internationally. As Apple is aware how the environment may affect or impede their financial progress, it sticks closely to the three environmental contingency theories to help them adapt.
The first theory that modernist examine would be the ‘Environmental Contingency Theory’. This states that the organization structure should undergo changes to fit the current environment (Lawrence and Lorsch, 1967). In the context of Apple, this organization change in structure could be evident in the early 90s, where Apple attempts to reinvent its platforms and improve its products hardware. It also restructured the company’s product line and introduced a new build-to-order manufacturing strategy. This adaptative approach has helped Apple return to profitability and combat other competition from other companies externally.
The next theory will be the ‘Resource Dependence Theory’. This states that the environment has a tremendous influence over the organization. Therefore it must control their dependency on it and try to come up with counter strategies to the environment. (Lawrence and Lorsch, 1967). One of the examples that can be linked back to Apple would be how it outsourced its manufacturing processes to foreign countries. This shows that it is not dependent on its own labour resources but scout for cheaper alternatives instead. This theory has assisted Apple in the sense of not being too dependent of the resources found in its own country, allowing Apple to reap massive financial benefits in doing so.
Finally, the last theory would be the ‘Population Ecology’ theory. Organizational ecology gets information from the biology, economics, and sociology, and tries to rely on statistical analysis to grasp the conditions under which organizations emerge, grow, and die. (Hanan & Freeman, 1977) It is seen as a different option to gain a stronger hold to the adaptation perspective. Simplified, it’s the idea that environment affects organization structure, failure, and success. This happens when companies focus on surviving within an environment by being dependent on it to operate at a basic level (Hatch and Cunliffe 2006). Apple’s success has left many organisations around to world trying to model after it in order to be gain financial benefits. Apple has set a benchmark for the organisations to rely on in order to survive. Therefore, Apple has successfully implemented certain strategies that allowed it to outlast the environment and still continue to do well.
Critical theorists believe that Apple is a capitalist who make use of the environment to support their own company objectives. The management of Apple is seen as concentrating their efforts on profitable ideas instead of improving organisational productivity and effectiveness. This makes the company develop a sense of invulnerability. Capitalist are able to gain control over societies to avoid making restitutions for poor social and environmental conduct. Over the years, Apple has managed to transformed from an American based company to a transitional corporation. It is able to operate and produce anywhere as long as the input resource is low in cost.
Although Apple has helped boost China’s economy and generate jobs and income for its citizens, critical theorist states that Apple only does this for their own financial interest. This can be seen from the exploitation of under-aged workers and the disregard for worker’s safety in a poorly constructed factory.
Critical theorist also believes the fact that Apple is trying to gain monopoly of the workers through Taylorism approaches. This affects the employees in such a way that they have no other skills but to continue working for Apple. As the Chinese government does not want Apple to pull out of its country for the financial growth it is generating, it is coerced to comply with Apple’s undesirable organisational practices.
Finally, Apple also registered their organisation with NASDAQ. This will improve public awareness and recognition in the company within its environment as they can provide future fund-raising capabilities by means of issuing share (Mcdowall, 2007). Achieving this would enable them to improve their net worth and gain an upper standing in the financial world. This will allow them to dominate over the environment’s social network.
In conclusion, through the two perspectives, it has allowed us to effectively see the differences in practices in Apple. It may be a correct organisational approach in the sense of a modernist view, but in a critical view, it focuses more on the social impacts Apple has on its employees. Therefore, the views only provide two different approaches of but not about whether it is a right or wrong practice. The theoretical perspective only serve as a rule of thumb in viewing the organisation in from different angles but is not a good benchmark to rely on for judgement of discernment.
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