Organizational Behavior is a field of Study which investigates the impact that individuals groups and structure have on organizations, for the purpose of applying such knowledge towards improving organization effectiveness. (Huczynsky, 2010) The way people behave individually or collectively in order to reach a common goal. Organizational behavior includes in it such issues as organizational design, culture, Group decision making, teamwork and leadership. (Dictionary of Business and Management, 2009) In this report two companies Apple and Scania are compared to each other in terms of their organizational behavior such as: design, culture, structure leadership and etc.
The report is written based on the two key studies provided in the assessment and via additional sources and researches. The report starts with brief information about the background of the companies. Further the companies are compared by applying theories such as: Continuum leadership theory of Tannenbaum and Schmidt, Abraham Maslow’s theory of hierarchy of needs, Managerial grid Leadership theory of Blake and Mouton, and etc. The team-work approaches in both of the companies are highly focused, discussed and followed by recommendations.
‘A truly magical and revolutionary product. What this device does is extraordinary. It is the best browsing experience you’ve ever had… It is unbelievably great… A way better than laptop, way better than a Smartphone.’ Steve Jobs 2010
We could not even imagine how our phones and computers would look like today. The bulky and considered luxury machines are now innovated and updated devices owned by every single person and even few by each. One of the major roles in evolution of IT technology during all these years has the multinational American company called Apple. Established in 1976, the company was initially named Apple computer, Inc, but later on in 2007 it was renamed into just Apple.
The company’s products are known as iPad, iPod, iPhone and Macintosh Computers or simply Mac Books. Apple has a very strong global market position as it has penetrated world’s biggest markets. According to the data provided in 2011, Apple has 46,600 full time employees around the world and 2,800 temporary full time employees and company’s sales are getting higher seasonally. Meanwhile Apple is considered to be a very successful company with a very high performance quality of its employees. (M. A. Lusted, 2012)
Another Successful company taken its origin in Sweden and founded in 1891 is Scania. Scania is one of the largest and best Swedish heavy truck and bus Manufacture Company with globally recognized reputation. Scania’s products are created just the way their customers wish including in it Maximum use and minimum harm to the environment. Scania’s products are designed to consume less energy, less raw materials and chemicals in order to have as lower impact on environment as possible. Along with its reputation Scania makes high profits operating in more than 100 countries worldwide and employing 35,000 people worldwide. (Scania web, 2012)
Analysis based on theories.
According to the case study provided by Robins S and Jude T.A, the hierarchy did not work in most of the companies, but it is effective in case of Apple. Was that because Steve Jobs was a unique leader who could manage the whole company by his consistent innovative ideas? At the very beginning, Apple had a relatively flat and informal structure, but later on when Jobs was back into company in 1997, it was totally changed. If before the employees and managers gathered on Friday for a beer to discuss some issues and express their ideas and even complain, after the market became more saturated with competitors, Apple was focused on changing its structure to be able to compete, keep brand and control costs.
Since than company improved and became a major part of the digital world. As a result of all these, the company’s plans and strategy was no longer discussed through the entire company and Jobs was the only generator of ideas proving the complete hierarchy.
(Debra L. Nelson, James Campbell Quick, PH.D, 2011)
Unlike Apple, Scania tens to rely less on hierarchy having a more flat company structure based on independent groups performances with the high concern on human factors and environmental issues. For example, Scania successfully uses the Sociothechnical systems theory where manager controls the environmental factors that influence the company’s internal operations and coordinates the social and technical subsystems. (Ricky W. Griffin, Gregory Moorhead, 2010) According to the Tannenbaum and Schmidt’s continuum theory of leadership behavior (1958, 1973) leaders should evaluate the situation before the implementation of a particular leadership styles. The continuum leadership behavior’s model theory is based on earlier studies focusing on the distinction of task versus employee or human orientations and demonstrates two types of leadership styles across the continuum: boss-centered (task) and subordinate-centered (relationship).( Borkowski, 2011).
In the Apple’s situation, the decision maker or the decision ‘seller’ was Steve Jobs. During the all time when Jobs was the CEO of Apple, he was often called ‘dictator’ or ‘despot’. Jobs never asked anyone for feedback. However he could always instruct and simplify the capabilities of the complicated devices understandable only by its creators, he thought going around and asking his employees about the confusing functions of his product is useless. Instead, jobs played the device by, took notes of his reactions and considered it as the only necessary feedback required. (Leander Kahney, 2009)
Whereas in Scania the entire company relies on customer feedback and development of stuff ideas so, if Apple has the structure where every single employee is responsible only for his part of job and has no chance to play any important role in making decisions, Scania has the structure there employees split into the groups brainstorm together on a certain idea or problem and together pick the optimal solutions. (Scania web, 2012) Based on all this we can assume that Apple is Boss-centered structured company and Scania is a more Subordinate-centered structured company. Figure 1.1 below demonstrates the locations of both Apple and Scania on a sample Continuum leadership behavior’s graph.
According to the graph, where Apple is closely fitted in the total boss-centered area and Scania is fitted closer to the subordinate-centered area, the two companies are totally different in their structure and leadership, but at the same time both companies are successful and globally recognized and are in their maturity state today. In another words, Apple has an Autocratic leader, where he dictates and forces his employees or even threatens them to get the result his way, unlike Scania that has democratic leader who encourages participation in decision making and considers other’s feelings and seeks to satisfy most of parties.(Hungeryager and Heekman, 1967)
Here comes the question: Despite the hierarchy and autocratic leadership in Apple and flat structured and democratic system in Scania, how come they both being so different be able to achieve goals having high employee performance? The best answer for this question would probably be the motivation which is present in both companies but caused by different factors. Humanity would not reach any level of development without the motivation. Abraham Maslow (1908-1970) introduced a theory focused on psychological need of employees divided into 5 levels forming a pyramid, and he believed that person needs all 5 to feel satisfied with his job. (Essentials of Management, 2009).
Hierarchy: ‘Common, pyramid-like organization where one person is in charge of a functional area with one or more subordinates handling the sub-functions. In an hierarchical organization (whether business, military, political, or religious) higher levels imply greater superiority and domination than the lower ones, and the chain of command extends straight from the top to the bottom’. (Business Dictionary web, 2012)
(Image extracted from googleimage.com)
While applying the following theory on Apple, it is obvious that the employees in the company are approximately on the 4th level depending on their job position. But in general, with the reputation that Apple has worldwide everyone would be proud to be employed by such a company and motivated by the financial aspect. In fact, the way the pyramid narrows towards up, the same way, the number of people with those facilities narrows down. Even in case of Scania, though the employees might be satisfied with their job and status, they might be also distracted by family or any other personal issues which could make them feel de-motivated. Adam’s Equity theory states that, employees attempt to achieve some equity between input and output, and if there is a difference between input and output, such as output less than input, the employees performance quality tends to be lower due to his/her job dissatisfaction. In another words, all contributions should be fairly rewarded. Going back to Apple can assume that there is a perfect balance between output and input.
Having high salary makes the employees feel right about not taking any part in making decisions; in fact they might feel more relaxed for not having big responsibilities. But in Scania, while taking part in discussions and decision making, employees feel more important, motivated but on the other hand they feel more responsibility pressure because in negative outcomes they all will have to share the loses. Looking at it more general, the only fact that might motivate the employees in both companies is the money. Due to the economic downturn which caused high rate of unemployment, the fact that one has a job, already makes him/her feel satisfied, but not for long. Once people get used to their job and salary they start getting bored and de-motivated. According to Guardian 2012, ‘many of those who worked for Apple, feels cut off from the real world, suspended in a cultural vacuum inside the walls of the company’.
The lack of communication with cooperatives, socializing and team-working leads to employees’ dissatisfaction. To avoid such errors, Scania depending on foreign labor, in order to keep high productivity level, created a humanization program which was to apply a new group assembly approach. The program was all about team-work and group decisions called Saab-Scania. The groups consisted of 5-12 people and were given the power to make decisions within the given limits. Along with production groups Scania formed development groups each composed of foreman, industrial engineers and representatives. Such groups were responsible for innovating and developing the new working methods favorable for the employees.
As a result, such team-working approach saved productivity time, increased products’ quality and raised job satisfaction of the employees, so since this experiment Scania finds its success in team-working structure. (A.. Rashid, 1982) Coming back to apple, one could only add, that high productivity and quality with the lack of team-working, is being reached only by having continues innovations and strong brand position, simply strong marketing. Further analyzing the case of apple we can add that, a huge multinational company where everyone is responsible only for his bit of work, simply being a tiny replaceable detail of a mechanism, and where the main responsibility is on CEO, team-working is not that important as long as the company’s goals are being reached.
The Managerial Grid or the grid theory now called as Leadership theory of Blake and Mouton states that there are two types of managers: concern for production and concern for people , and the perfect manager would be the who could exhibits both people and production concern. The leadership grid is graded from 1 to 9 from both axes identifying 5 main types of leaders: country club management, team management, middle-of-the-road management, impoverished management and authority management. (Miller, 2012) The grid looks as follow:
Relying on the leadership grid, we can assume that Apple with the autocratic approach and higher concern on production and lower on people, is classified as a company with the Authority-Compliance Management leadership and Scania, deserving to be placed on the other side of the grid is a company with Team-management leadership, having high concern on people rather than on production. The modern team system of Scania is highly relied on cluster managers. The cluster manager is the manager who has overall responsibility for the team consisting of 20-25 employees. Each cluster consists of people with different experience and skills and trained before becoming fully operative. Often there are also small temporary teams. Thought the cluster has a manager, the employees have the sense of belonging to a team and having major role in it.
A centered team-working structure helps the company to keep strong Company-oriented company culture. ‘No one must be able to say that is not my concern, I am not responsible for that’ said the senior manager of the company. Although Apple cannot boast with its tem-work management Leadership as Scania, it motivates the employees providing the opportunity to get promoted from an intern into a manager. The trainings provided free by Apple itself makes the process much easier for the employees. In addition, small competitions such as answering the most difficult question of the customers are followed by rewards. Another important fact is that, Apple provides large job opportunity to young students employing them, full-time, part-time or making them student representatives at their schools. (Apple Inc.’s Ethical Success and Challenges web, 2011)
While summing it all but, it is right to mention that, while comparing the companies and analyzing their organizational behaviors the total difference of the companies has been identified. Apple is a multinational autocratic company having high concern on production and lower concern on people, despite this it is able to motivate the employees by rewards, bonuses and promotion opportunities demonstrating itself as a creative company challenging for innovations with the strong belief in its successful bright future and seeking for the genus employees from young generation, to take part in those innovations. The case of Apple has proved that, the employees are not pressurized by dictator, as it is expected in an Authority-Manager company, but inspired to work with such unique leaders.
Scania, along with its rich Swedish culture totally relays on the team-working manager Leadership with the ability to balance both concern for people and production and giving the employees the chance to feel themselves part of a whole mechanism. The management in Scania believes that, every employee in the company despite the job position should feel the responsibility and share it with the collogues and feel that he/she does not work for someone, but works together with everyone. Fortunately, for Scania being further from hierarchy unlike Apple, adds advantages in terms of organizational behavior, proving the democratic structure of the company, whereas Apple proves to be really a unique company for being able to success with deep hierarchy in it.
Thought Apple is satisfied with its production and the company in whole, it should also pay attention to its employees by providing them some other activities to make them feel as a team. For example, Apple could create groups or teams responsible not for the main operations of the organization, but side operations or project such as charity, where the employees could take part in decision making process without the involvement of CEO. Another option for Apple could be organizing research teams with team leaders, as employees feel more motivated when they are committed in the changes.
Because the managers in Scania are very multinational, the company should pay attention to cultural difference of the employees. It would be very relevant to educate the cluster managers in terms of culture of the other members of the team and than sent them to the Angers plant. Obviously the expansion of company by creating more teams in Scania is advantageous on one hand, but on the other hand it makes the company’s structure too sophisticated and too massive and moreover, adding a new cluster may reduce the space of other clusters. That is why Clusters should be added within the limitations, or smaller groups should be created as smaller groups make better performance and make faster decisions.
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