Organisational Theory Essay
Apple is a global giant whose success has been built on outsourcing to a range of other organisations located across the world. How can different organizational theory perspectives assist us in acquiring different understanding of Apple, its organizational network and influence? In this essay you must use at least two perspectives to analyze Apple. Introduction
In this revolutionised world, changes occur rapidly, be it in an organized or disorganized way (Henry Veltmeyer 2008). Organisations are dealing with more complex systems and concepts. The study of organisational theories gradually gains importance because it involves the study of abstract issues relating to organisations. It is essential as it benefits in analyzing and discovering new meanings to life both inside and outside the organisation (Hatch and Cunliffe 2006).
Apple’s innovative story has been told and retold all around us. Its success is largely due to the late co-founder, Steven Paul Jobs. With the passing of Steve Jobs, Apple Inc is still prospering and currently the most admired company is the world (Fortune 2012). In organisational theory, the success of Apple can be analysed into two perspectives that vary extremely; Modernist and Post-Modernist. The modernist attributes Apple’s success to its unique organisation chart and ‘knowledge is power’ organisation culture.
Post-modernist give credits to Apple’s acknowledgement of discourses and environment influences related to the organisation. Apple’s ability to churn out great quantities of products to meet the demand and its consistent engagement with stakeholders showed the efforts to be competitive in the industry. It is also a significant contribution to its success. However, Apple’s way of achieving success is a cause of debate due to its pathological relationship with its stakeholders.
This essay aims to provide an exploration into Apple’s Inc organisation; perspectives of its stakeholders and how the relationship towards its environment. The context of the essay will be separated into two parts. Part A and B. Part A will touch on the meta-theoretical assumptions of modernist and post-modernist and how it relates to organisation’s power, control and the environment.
Part B will apply the assumptions and definitions in part A to analyze modernism and postmodernism perspectives on Apple. The focus will be on the ways that Apple demonstrates power and how it influences its environment and network which includes stakeholders.
Ontology is defined as the science or study of reality (McAuley, Duberley & Johnson 2007). It seeks to clarify what are the reality and the phenomena we take to constitute aspects of the reality. Modernist’s ontological assumption is described as objectivism. It claims that social world and reality is in order and that the reality is in a rational, structured manner regardless of our knowledge (Boisot & Mckelvey 2010).
They view the existent of time is real regardless of the human’s awareness because of humans develop hypothesis and propositions that showed the reality of time. On the other hand, there is no clear stance on the ontological assumption of postmodernism. It is developed in reaction of modernism position (Moore 2001). Postmodernist rejects and challenge the modernist view and argue that time is ‘created’ through the discourses of human because it provides meaning and assurance to humans.
Epistemology is the study of the criteria we set and how it justifies the belief. It seeks to clarify how beings create knowledge to claim the world is justified.
Modernist takes a positive point of perspectives in viewing the world in search for knowledge. Modernist’s epistemological assumption is positivism, whereby rational hypotheses and practices of knowledge will define reality and understand nature(Hatch and Cunliffe 2006). They sees ‘truths’ to be the discovery of the human’s accurate hypothesis and conceptualization to be analyzed with the reality found in objective world.
Nonetheless, postmodernism rejects modernism’s notion of ‘truths’. It describes reality as an illusions created by languages and discourses. It refers to the subjective means by which humans organise what they perceive. Discourses are thoughts, written or spoken or any mediums that construct a particular phenomenon, they are in a social and politically linguistic framework that influences humans experience and understanding of it (Crowther & Green 2004). Instead, postmodernist aims to provide an alternative explanation/meaning through the use of discourses.
Methodology influence on Organisation
Continuing from the epistemology of modernism, it sees apprehension of knowledge means understanding all aspect of an organisation functions. Ways of solving and analyzing organisation issues are developed to better manage and create profitability for the company. Modernism and the methodological term, positivism, underpin the structures and episteme legitimacy in this ‘noisy’ world.
Post-modern methodology lies in ‘anti-positivism’, where language, discourse and deconstruction are the main influences. Language can have different meaning and different significance when combined with other words (Moore 2001). The construction that could be produce may vary extremely in different circumstances. Postmodernists call this idea the Ludwig Wittgenstein’s notion of language games.
Knowledge creates and reproduces discourse that exercise power and distort the reality that modernist assumes. The concept of discourse emerges in ‘poststructuralist linguistics as a means of discussing the collective process that constructs and shapes language in use.’
Deconstruction ‘is a way of reading and rereading texts using different contexts in order to expose their fundamental instabilities and multiple interpretations.’
Organisation Power and Control
Organisations require power. Power in organisations has to operate on the phenomena of changing organisation practices and changing the ways in which organisation theorist have theorized the practices (Hatch and Cunliffe 2006).
Max Weber suggested that power is making decisions according to planned results where the social actor gets to decide the means and ends of action. Political scientist, Robert Dahl further resides the relationship of the actor by suggesting that actors may be individuals or collective which leads to different instruments of power (Clegg, Courpasson & Phillips 2006).
‘A’ can get ‘B’ to do something that ‘B’ would not otherwise do, just like the abstract ideology of billiard where the significant lies more on the strategy and gamesmanship behind the cue rather than final position of the balls. Anthony Giddens, expanded Weber’s definition of power stating that power involves a set of capabilities that intervene a given set of events by 2 distinct types of resources; allocative and authoritative.
In modernist organisations, Weber argued, formal rationality would be best established and where dominance will be most complete. Modernism views power in organisations as a structure to coordinate activities in the pursuit of organisation goals. It seeks to impose order on the chaos and to integrate the competing interest and agendas so that a single, harmonious vision and a consistent set of premises govern the conduct of participants.
The instrument of power is seen to resolve conflicts through negotiation and maximize control of operations. Modernist views controlling individuals in organisation necessary because employee possesses self-interest that will hinder organisation interest. The modernist control theories of bureaucracy, clan and agency will be applied on Apple.
In contrast, Postmodernism theorist argues that unified goals can arise only when dominant actors delegitimize alternative interpretations and rationalities. It emphasizes the central role of power in shaping social institutions. The connection of power and knowledge is assumed to be inseparable and thus knowledge loses a sense of innocence and neutrality (Scott 2003).
Postmodernist insist that the rational formal structure must be set alongside various informal systems that represent attempts to resist any single vision of order (Hassard 1995). Foucault’s theories pointed out that resistance towards domination is inevitable as power comes from everywhere. Any form of resistance will just reinforce them (Clegg et al. 2006). It views power as a multi-dimensional because it is like a network that dispersed throughout social, political and organisational world.
Organisation Environment and Network
Organisational environment is anything residing outside the boundaries of organisation that may impact upon the organisation. The organisation needs to adapt well to its environment and vice versa for the relationship to operate in an ideal prospect (Hatch and Cunliffe 2006).
Modernist believes there is boundary between organisation and the external environment. Environment relates the factors such as inter-organisational network and its stakeholders. Networks are defined as stakeholders, consumers, environmental groups, competitors and so on. Modernist theorist assumes that there are inputs and outputs between the organisation and environment.
The environment empowers and constrains an organisation; it impacts upon organisational goals and needs to be managed. Stakeholder theory refers to any actor that is vital for the survival or success of the organisation, and because of the boundary, other factors does not concern. As the focus is explaining how environmental influence operates, modernist researchers developed theories to analyze the environment. The Environmental contingency and resource dependent theory will be applied on later on.
On the other hand, postmodernist deconstruct the dominant assumptions such that organisations and the environment are two distinct entities where there is no fixed boundaries; organisations are part of the environment (Boisot and Mckelvey 2010). By deconstructing, it aims to better serve the society’s needs and desires. Postmodernist theorist believes discourses used to define organisation-environmental relations are served to reinforce authority and inequality between an organisation and those ‘external’ to the organisation.
Its stakeholder theory examines the ethics of constructing our organisations in ways that acknowledge the rights of those whose lives are influenced by the organisation. Compared to modernist, the definition is wider because it has a boundary less organisation and environment. It includes actor that affects or is being affected by the organisation, therefore even factors outside of the organisation are being considered.
Apple’s Organisation Power & Control
This part of the essay aims to analyze and understand Apple’s organisation in different perspectives in terms of its organisation power and structure.
In modernism, the notion of power is based on authority. This is where the CEO, has the right to exercise his power. Steve Jobs has been always at the center of attention for being ruthless in unsuccessful projects. For example, the failed venture of MobileMe in 2008 caused the disbanding of the team (Lashinsky 2011). This rationalization is what modernism lean towards as they believe bureaucratic justification will lead to technical efficiency.
Modernist researchers analyze that positivism exist in Apple. Apple’s philosophy of only choosing the best of the best candidate during interviews mirrors Steve Jobs statement of ‘A worker hires A worker, B worker will hire C worker’ (Lashinsky 2012). It displays that only rational hypothesis of hiring and trusting talented employee through tried and tested results in the business world that will bring Apple success. In terms of output and behavior control of the employees, it is difficult to measure at times. Modernist theorist uses few methods of control theories to sought control over employees so as to maximize organisational interest.
In modernist view, these theories can be applied to Apple accordingly. Bureaucratic and Clan theories aim to achieve a desirable corporate culture within the rules and authority among the employees. In Apple, there is a top down management where it all begins with the CEO, then to the executive team. They have a unique organisation circular structure where the CEO is at the center and the network of executives spread out from there. Late Steve Jobs also instilled a concept that the employees’ working style are own task-oriented, which creates differentiation and departmentalization. The corporate culture also became more united and there is no more fiefdom.
The successes of the products are credited to Steve Jobs ability to instill the ‘Apple Way’ strategy to give the organisation clear directions, individual accountability, sense of urgency and the change of focus to products instead of profits. Agency theory focuses on ensuring that the executives perform in the best interest of the organisation. The focus turns to performing for the organisation, therefore controlling outputs become more important. Performing employees gets to attend the famous Top 100 meeting which the CEO will personally invite them. This theory also emphasizes the success of secrecy working in a modernist perspective where Apple controls the information that concerns their products to height up the hype and gain more profits.
Alternatively, postmodernist deconstruct power and control, rebutting the single dimension and views power presence throughout social, political and organisation world.
Apple’s tip top secrecy organisation is well known (Lashinsky 2012). Postmodernists look at secrecy as a form of imposing a multidimensional power on its employees by the top management. Inside Apple, employees cannot have any resistant to the secrecy culture. Any resistant will result in greater power. Greater power comes in the sense of punishment; employees may get sacked (Clegg et al. 2006). More precautions will be also taken to minimize the chances of it happening again. Therefore, instead of seeing secrecy as a form of increasing efficiency and profits for the Apple, postmodernism argues that it’s a form of power that gives the top management control over the organisation.
Another aspect of multidimensional power analyzed was the ability of Apple not making any indication to stop the global group who wants to boycott Apple products due to the massive suicides rate and pressure to increase workers’ wages at its main supplier, Foxconn. Postmodernist argues that in a one dimensional power situation (modernist perspective), Apple will find means to ‘kill’ the enemy (the boycott group) with its powerful influence in the business world. Here, Apple is using a second dimension by not ‘killing’, but proving to the rest of the people that Apple is still an ethical and superior organisation. This way, Apple silently gets an army of ally to do the job to influence the boycott group to change its mindset.
From another point of view, on the contrary, there is an increasing sign of fresh debates concerning postmodernism theory on whether is resistance really forbidden. The suicides cases at Foxconn and significant rise of terrorism in the past decade do post a serious question to postmodernist researchers (CCTV 2010). These extremes examples show signs that resistance might have, in fact, the ability to affect power positively. The suicides cases have indirectly forces Foxconn to reconsider its management styles and most importantly increasing the workers’ wages (Chan & Pun 2010).
Apple’s Environment and its Network Influence
Apple’s relationship with the environment is a two way situation. The following theories will analyze how Apple operates under the environment and its network. In modernism, it can be argued that Apple seems to go against the environmental contingency theory. Apple has a vision to avoid over complicating by manipulating its environment and structure. Steve Job has been making his organisation to be simpler in every ways, from the responsibilities of the executives to its consistency simplicity of its store layouts (Froud et al. 2012).
Its product variety is also purposely concentrated to a few. With the limitation of variety, Apple countered this shortcoming by introducing a multi-dimensional model which minimize cost and increase its revenue. This substantial amount of revenue also includes introducing Itunes and the unique operating system. This counterabilty of its shortcoming is related to the next theory; resource dependency (Fortune 2008).
As modernist views organisation are dependent upon the environment for inputs and outputs. Theorist Pfeffer and Salancik emphasize that organisation are under the restriction of their environment hence the resource dependence theory was developed. The aim was to find counter-dependencies to prevent the organisation from over reliant on the market. Apple’s need for the analysis for its resources is due to its vulnerability in the environment and the power that environment holds.
The environment has the power to make demands on the organisation, for example, increasing competitions and thus resulting in competitive prices, product differentiation and efficient organisational structures and processes. Apple’s relationship with its supplier, Foxconn, is a prominent example of apple’s ability to navigate the harsh world of environmental challenges to find ways of getting cheaper labour.
The jobs created in China are twice compared to USA, but the differential in salary showed USA has a significant larger share of the payout (Freeland 2011). Apple also created counter dependency by having joint ventures with Samsung Electronics to have them make the processor chips and alliances with companies like Google and Youtube to make use of their world map and video applications. By inventing their own operating systems and programs, it also provides Apple with increase efficiency because they do not need to rely on the environment to react if they have any new ideas or concepts.
Critics have argued that Apple has been adopting a narrow view on the perspective of stakeholder theory because they will neglect the factors that are indirectly connected to the organisation. This interpretation mirrors modernism due to its creation of the boundary of the ‘outside’ world and its stakeholders.
The comparison made earlier with the jobs created in China and USA suggested that Apple is adept at avoiding the social obligations to provide secure, internal, high quality employment for its own nation, USA. This generates another thought on business ethics that Apple is actually prioritizing on getting the highest profit margin (their average profit is already approximately 70% of selling price) instead of the reason of the competitive industry.
On the other hand, postmodernist claims that stakeholder theory is an integration of the organisation and stakeholders, thus they see Apple actions to affect anyone who are affected even if it is indirect. In Apple’s website, they have the environmental responsibility page to ensure its stakeholders are assured that Apple do consider every factor that relates to its organisation to be taken care of (Apple 2012).
Postmodernist also argued that by creating boundary between organisation and environment, there will be negative externalities. Apple’s ability to entice consumers with the introduction of Iphone 5 is a cause of negative externalities. Externalities such as driving the consumption rate of the society when Iphone 4s still have a long product lifespan, this creates another issue of environmental repercussions and increasing workload/stress issues at Foxconn.
Apple’s does produce positive externalities in the process of unveiling their products. For example, consumer did not have to bear the cost of intense advertising by Apple because Apple’s strategy of using multi-dimensional power to influence the public to do the ‘advertising’ for them worked. Blogs, video parody and even news were heavily speculating and discussing about the new products, thus bringing in ‘free’ advertising as a form of positive externality to the consumers.
The modernist and postmodernist theories thus assist us in analyzing Apple in a different light. It has shown the different perspective of Apple in terms of power, control and its environment. It showed that power can be multi-dimensional and formidable. On the contrary, questions are being asked of postmodernism’s resistance stance and environmental contingency theory. Although this essay cannot attribute its success to a single perspective, it did make an conscious effort to explore and improve Apple’s organisation as a whole.
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University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 18 February 2017
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