Apple Jobs

Apple’s Post-Jobs Shift From Innovation to Ethicality

The death of Steve Jobs would mark a sharp transition in the history of the Apple Company. Driven by innovation under the visionary CEO’s watch, Apple would nonetheless be the subject of criticism for its negative ethical performance in areas such as labor rights and environmental compliance. Jobs untimely death would bring new CEO Tim Cook into the office under intense pressure both to maintain the company’s high product development standards and to alter its decidedly lesser ethical standards. This discussion considers the ethical flaws which persisted under Jobs and some of the steps taken by Cook to alter Apple’s troubled ethical reputation.

Section I. General description of the enterprise and its environment

Apple has enjoyed a reputation as a progressive and ethical company largely on the strength of its image is a cutting edge technology company whose products are used and enjoyed by progressively minded consumers. Indeed, Apple has established itself as a technology firm with a clear grasp on the wants, needs and expectations of its buying public. However, evidence suggests that its image as a pointedly ethical corporation may not be deserved and that the vaunted talents of its recently deceased CEO Steve Jobs may also have overshadowed his pointedly unethical tendencies as a business partner, leader and employer.

As the research hereafter will suggest, Apple has begun work on restoring its image as a high performer in the area of corporate ethics even as it attempts to stifle concern over its lack of direction and innovation without the late visionary CEO. Indeed, while Jobs will be shown to have maintained a habitually unethical sense of how to achieve success in the business world, evidence also suggests that his methods helped to make Apple the unparalleled success that it has become. This would be true both in terms of its product offerings and its public image.

Today, there may be a correlation between the increased scrutiny facing its product output and that concerning its ethical performance. In the research conducted here on the Managerial Functions in place at Apple, we will attempt to identify the defining ethical characteristics of Apple both during and after Steve Jobs’ tenure as the company’s CEO. In particular, the discussion will focus on the degree to which Jobs would trade ethical turpitude for innovation and profitability. This will be contrasted from the orientation sought by his predecessor, Tim Cook. In Apple’s current CEO, the company has a strong leader with an excellent reputation of innovation in supply chain management but with less of a visionary leadership style than Jobs. That said, the discussion will show that Cook has channeled his role as steward not just into shifting the focus of the company’s business strategy but also to driving it toward much needed improvements as an ethically performing corporate citizen.

Section II. Description of managerial functions

Planning

While Apple’s greatest strengths were couched in the reputation of their leader, so too were their greatest weaknesses. Jobs governed the company with an unwavering philosophy of planning for the next stage of technology development. Most of the company’s projected opportunities would center on achieving greater market-share and profitability by offering intuitive products with rapidly advancing capabilities. Just as Jobs would draw his plans around these capabilities, his company would exclude from consideration the way that its ethical performance might impact its reputation. Therefore, historically absent from its business plan would be matters of importance such as planning for the protection of labor rights, adherence to evolving environmental standards and the creation of opportunities for stockholders. However, in all of these regards, circumstances appear to be shifting under Cook.

The new CEO has unveiled plans to reverse many of the worst performance indicators in the evaluation of the company’s ethical track record. According to Arthur (2013), “the overarching theme for Cook v Jobs is that Cook is trying to show a softer side of Apple,” says Horace Dediu, who runs the Asymco consultancy. “He seems to be willing to put a gentle and less recalcitrant face on the company. All these things, even dividends, are signals that Apple is kinder, gentler. However, it’s early days. Every new manager wants to place his mark on the company and distance himself from the predecessor.” (Arthur, p. 1)

It is thus that the company has begun to develop a set of strategic plans which would position Apple to enjoy an improved reputation as an exemplary corporate citizen.

Organizing

Issues of Organization are particularly problematic in a discussion on Apple’s ethical performance. This is because its organizational strategy borrows heavily from the more generally exploitive tendencies present in the global marketplace. The tendency of Apple to organize its production operations around low-cost labor in overseas manufacturing centers is among the most difficult habits to break. As reported in the text by Sethi (2012), one of Jobs’ worst legacies would be the sharp contrast between its treatment of its customers and its employees. While the innovations spearheaded by the company seemed to be organized around the expectations of the former, they are achieved on the backs of the latter. According to Sethi, “when it comes to customers, Apple is a bold innovator that leads the industry into new directions and forces others to follow. However, when it comes to the management of its supply chain and treatment of workers in the Chinese factories that make its products, it hides behind the constraints of prevailing industry practices. What is even more disconcerting is the fact that these practices are in violation of not only local and national laws, but also of Apple’s own voluntary self-imposed code of conduct.” (Sethi, p. 1)

Fortunately, while the company has not always protected this code of conduct under Jobs, evidence suggests that it is working harder to do so under Cook. With increasingly vocal protest from the global community, the new CEO has begun to open up its overseas labor operations to the oversight of watchdog groups. According to Hawthorne (2012), organizational improvements have begun to take hold since the change in leadership. Hawthorne reports that Cook “may be starting to get the message. Apple published the Fair Labor report on its Chinese factory, and its Greenpeace score has improved.” (Hawthorne, p. 1)

As the subsequent section will show, these organizational changes are made possible by a general change in the tone of leadership under Cook.

Leading

Leadership is one of the greatest concerns at Apple today, largely because the figure of Steve Jobs is so towering and dominant in our impression of the company. This is because the presence or absence of Jobs over the past several decades has appeared to be a fairly useful predictor of the company’s general success. As the article by Fung (2013) indicates, industry observers have expressed doubt that the company can rebound from this momentous loss. To this end, Oracle CEO Larry Ellison was recently reported as predicting that Apple is now destined for failure without its innovative leader. According to Fung, “Ellison gives voice to a consensus that Jobs and Apple were synonymous, if not symbiotic. History, according to Ellison, appears to bear that out. When Jobs was fired by then-CEO John Sculley, his departure sent Apple into a funk that only Jobs’ return could fix.” (p. 1)

Part of Jobs’ leadership success seemed to be encapsulated in his oversight of most of Apple’s greatest product innovations. Concern has been expressed from many corners of the industry that current CEO Tim Cook may not be up to the task of retaining the company’s considerably high innovation standard. As the article by Poletti (2013) indicates, the release of its iPhones 5C and 5S would be especially disappoint from both a product innovation standard and an economic performance standard. Poletti reports that “investors have driven Apple’s AAPL +0.04% shares down more than 10% since last week’s event at the company’s Silicon Valley headquarters, where the two new smartphones were unveiled to the world. The iPhone 5C seemed an especially odd move, considering the company wrapped an existing iPhone (the 5) in plastic in a supposed low-cost effort to appeal to emerging markets, while keeping the price too high to really accomplish that goal.” (Poletti, p. 1)

Some theorists suggest that the current leadership orientation is a conscientious departure from that which previously guided Apple’s corporate decisions. Contrary to the era of innovation which preceded this one, Apple seems to be set on treading water today as it struggles to meet the expectations of its shareholders. According to Poletti, “It has slowed down,’ said Laurence Balter, chief market strategist at Oracle Investment Research, when asked about innovation at Apple. He said the company seems to be in a different operating mode at the moment, trying to satisfy shareholders. ‘The debt offering was a little pacifier for the little babies on Wall Street,’ he said.” (p. 1)

While this is a disturbing trend for consumers who have become accustomed to the dizzying pace of advance coming from Apple, it may actually be good news from an ethical perspective. The ruthless quest to drive the company forward would often be seen at the root of the Jobs leadership philosophy. But evidence is gathering today that shareholders and the observing public expect greater ethical acquiescence on the part of Apple. Perhaps now beyond the era of concentrated innovation, the company may begin to prioritize the achievement of greater ethical fortitude both internally and in the way it interacts with the market.

Controlling

Rumors were that Jobs had prepared for his demise and for the assumption of leadership responsibilities for his successor. Jobs was notorious as a Controller of company processes, taking a level of involvement in the company’s regular affairs tat distinguished him as both an admirable hands-on leader and as an insufferable micro-manager. However, the article by Poletti observes, with two years now passed since the death of Jobs, few of his promised posthumous innovations have seen the light of day. With his death, the control he maintained for company leadership over the pipe of new product developments has been loosened. Though this has manifested negatively in the company’s economic performance, it may be the product of improving internal conditions for employees. Jobs’ style of highly control-oriented leadership is the very same disposition which saw him ousted from the company in the adolescence of its life cycle.

As Dvorak (2013) reports, “when Jobs was forced out of Apple in 1983, I can assure you the company was in a shambles, mostly because of Jobs being in a rush to implement his ideas. Wozniac had been pushed aside and Sculley was being trained to take over. The company was doing $800 million and mostly unprofitable. And Jobs was something of a loose cannon.” (p. 1)

In other words, the impression that Jobs excelled in his role by exercising a high level of hands-on control may overlook some of the less desirable aspects of his performance. Even in his first stint with Apple, evidence suggests, Jobs would run afoul of colleagues, competitors and employees because of his ruthless, callous and sometimes erratic managerial tendencies. Cook’s oversight of the company demonstrates a sharp turn in orientation. Moreover, evidence suggests that this orientation is actually producing positive outcomes for Apple. Cook’s style of Control has helped to bring a new luster to Apple’s ethical performance. The company has, simultaneously, been rewarded with increasingly exciting financial performances as well. Even as discourse suggests that the company will struggle to survive without its visionary leader, Arthur reports that “Apple doesn’t look like a company in serious trouble. It has risen in value by more than 75%, from $346.2bn (£215.2bn) on 4 October last year to $619.9bn at the time of writing, becoming the most valuable listed company in the world and bringing it close to an all-time inflation-adjusted record (beaten only by Microsoft in 1999). It has sold more iPhones in that period than ever before (and then bettered that with pre-orders for the iPhone 5, which was released last month). Its profits have kept growing, in apparent defiance of any law of economic gravity.” (Arthur, p. 1)

In some respects, the Article by Arthur maintains, Cook has taken on some of the ethical dimensions of Jobs’ leadership orientation. With respect to Controlling the company, Cook also favors secrecy in its research & development and the use of off-the-record press brunches to trickle out information about its emergent product offerings as well as happenings within the company structure. This denotes that, in spite of public criticism of its tight-lipped relationship with investors, Cook has preserved this aspect of the company’s ethical approach. (Arthur, p. 1)

By contrast, Cook has been responsible for a number of immediate and aggressive changes in Apple’s corporate citizenship which suggest that the CEO has quite a degree of control in shaping the company’s ethical identity. A series of changes in the way the company conducts itself within the public sphere indicates that Cook may be a great deal more dedicated to establishing Apple as a progressive company in action rather than just in image.

For instance, Arthur reports, Cook would release $50 million in charity to Stanford Hospitals and an additional $50 million for assorted charitable causes. This would mark a sharp contrast from the philosophy of his predecessor on the subject of charity. Of Cook’s contributions, Arthur says, “Jobs, it was commonly agreed, would never have done that; one book, Inside Apple, quotes him as saying that giving money away was ‘a waste of time’.” (Arthur, p. 1)

Another important ethical shift would be Cook’s decision to take a more active interest in ensuring that labor rights for Apple’s overseas production workers are protected. Historically, this has been one of Apple’s weakest performance areas, with the company routinely and deservedly facing criticism for its employment of Chinese factory’s guilty of various human rights violations to manufacture its iPhones and iPads. While Jobs displayed a general and staunch disinterest in the conditions facing these workers, Cook seems a great deal less defiant on the subject. As reported in the article by Arthur, “a statement about working conditions at the Foxconn plants in China where iPhones and iPads are made and assembled, in which Cook said: ‘We believe that workers everywhere have the right to a safe and fair work environment” and instituted wide-ranging checks by the Fair Labor Organisation, after a growing chorus of criticism over worker suicides and reports of exploitation.’ (Arthur, p. 1)

Cook has taken the managerial approach of imposing less control over day-to-day product development or marketing affairs and instead providing greater regulatory control over the company’s myriad ethical shortcomings.

Section III. Analysis and recommendations

Ultimately, an analysis of Apple’s ethical performance is complex if for no other reason than that the ethical expectations of corporate entities are themselves quite complex. Moreover, many ethical complaints against Apple have been overshadowed by the far more salient headlines about its continued product innovation. Today, with the latter quality being drawn down slightly, questions over the former quality have become more prominent. Not only that, but the simple observation that Jobs lacked a positive ethical center as a corporate CEO is itself more complex than it would appear on the surface. According to the analysis offered by Chan (2011) upon the CEO’s death, the negative ethical reputation endured by Steve Jobs was largely based on his hostility toward corporate philanthropy but may not have properly accounted for Jobs’ otherwise enormous contributions to improving our way of life.

To this end, Chan assesses that “those who have followed Jobs over the years will make no claims of sainthood; in fact, his leadership style was often reported as ruthless and borderline abusive. This ‘artist’ certainly is not an ethical archetype in the traditional sense. But one thing he has done is help modify the ethos for how we live life (whether we own an iProduct, an Android OS device, or ‘refuse to participate’) in this revolution of time and space. The way our world is structured is no longer the same, and for this grand contribution to ethics, Jobs may be considered a magnanimous albeit morally-complicated man.” (Chan, p. 1)

That said, the ethical role played by his corporation is perhaps less debatable in this age of increased emphasis on corporate citizenship. As a company that has transitioned from industry underdog to dominant force, Apple can no longer posture as a progressive company while engaging in old-fashioned abuses of labor, environment and stockholders. As the Cook era seems to demonstrate, Apple’s years as the chief innovator on the market may be numbered but its relative success as a major player in the industry is still likely. In order to ensure that future, the company must establish a clearer sense of its ethical responsibility to the world community. With Cook, this shift in focus appears to be well underway.

References:

Arthur, C. (2012). The post-jobs Apple has a different flavor under Tim Cook. The Guardian.

Chan, A.J. (2011). Steven Jobs (1955-2011), former Apple Chief Ethics Officer. Monday Morning Business Ethicist.

Dvorak, J.C. (2013). Is Apple Doomed Without Steve Jobs, as Larry Ellison Predicts? PC Magazine.

Fung, B. (2013). Larry Ellison says Apple can’t Succeed Without Steve Jobs. He’s Wrong. Washington Post.

Hawthorne, F. (2012). Apple’s Appalling Ethics. Huffington Post.

MacDailyNews (MDN). (2011). The Late But Not Great Steve Jobs. Macdailynews.com.

Poletti, T. (2013). Tim Cook Still Competes With Steve Jobs’s Ghost. Market Watch.

Sawyada, J. (2011). Apple Inc.’s Ethical Success and Challenges. Daniels Fund Ethics Initiative.

Sethi, S.P. (2012). Two Faces of Apple. Carnegie Council.

Smith, J. (2013). The World’s Most Ethical Companies. Forbes.com.

Snider, M. (2013). Oracle CEO: Apple Destined to Drift Without Steve Jobs. USA Today.