CAPS 600 MASTER MAJOR COMPREHENSIVE PROJECT 1
All Things Apple
By
Jason Thigpen
CAPS 600 GRADUATE PROJECT
Southwestern College
June 2013
CAPS 600 MASTER MAJOR COMPREHENSIVE PROJECT 2
Table of Contents
Table of Contents…………………………………………………………………………2
Abstract……………………………………………………………………………...........3
Apple Management 1977-1985…………………………………………………...............4
Apple Management 1985-1996…………………………………………………………...7
Apple Management 1997-2011…………………………………………………….........10
Apple Management 2011-Present………………………………………………….........12
Future Learning…………………………………………………………………….........13
Conclusion…………………………………………………………………………........14
Bibliography……………………………………………………………………….........15
CAPS 600 MASTER MAJOR COMPREHENSIVE PROJECT 3
Abstract
Apple Computers started out as two friends with a hobby building a computer in a garage
and turned that into the largest computer company in the world. Over the years Apple saw ups
and downs while competitors were able to steal some of the market by developing cheaper
machines. Apple’s management was able to see places for change and made those changes by
streamlining their product line. The management styles of Apple’s CEOs like Steve Jobs and
Tim Cook were able to take the ideas of their employees and make huge profits and become the
industry leader that all other companies were trying to emulate.
CAPS 600 MASTER MAJOR COMPREHENSIVE PROJECT 4
Introduction
Since its inception in a garage, Apple Computers as always been about innovation and
pushing the limits of technology to the point that the limits were expanding. From its beginning
the company has had the leadership of some visionaries who were able to envision things that
had never been done before. That is what makes this company so special. It has always been a
company that does things its own way leaving its competitors scrambling to keep up.
1977-1885
Apple Computers got its start with Steve Jobs and Steve Wozniak were computers
hobbyist tinkering in a garage. In 1976 the “Steves” built their first prototype computer named
the Apple I (Bellis, 2013). The world was not ready for such an innovative invention, so Apple’s
first computer was not a huge hit. In 1977 Apple II debuted with a plastic case and color
graphics. It was also the first computer to come pre-assembled. Orders for this computer
increased dramatically over Apple I (History of Apple Computer, 1997).
Steve Wozniak was considered the chief engineer behind the Apple I and II (Bellis, 2013)
and Jobs was also a major part of design and innovation of product development. However, they
could not be trusted to run the business side of the operations (Brian, 2011). During this
timeframe at Apple the management and leadership styles were doing things that had never been
done before. Because they were pioneering new technologies, there were plenty of opportunities
for brainstorming and problem solving (History of Apple Computer, 1997).
Michael Scott was hired as the first CEO of Apple in 1977 (Brian, 2011). He was
recruited to the company by Apple’s first financial backer and third employee Mike Markkula
CAPS 600 MASTER MAJOR COMPREHENSIVE PROJECT 5
(Yarrow, 2011). In the early days of the company there were so many moving parts and so many
jobs that had to be accomplished in order for the company to be successful. Markkula was the
marketing expert who was building a strategy to move computers. Steve Wozniak was building
circuit boards. Steve Jobs was working on the rest of Apple II. Rob Holt was the product
engineer who was working out the problems with the prototype. Michael Scott was trying to
build the manufacturing plan (Yarrow, 2011).
In 1981 Scott left Apple and Markkula took over as CEO. Markkula is credited with
Apple’s success as much as Wozniak because of his ability to market the product (Brian, 2011).
Marrkula only acted as CEO until1983 when he stepped down and acted as chairmen until 1997
(Brian, 2011). In 1983 John Sculley was hired to be the companies third CEO (Brian, 2011).
Sculley was hired from PepsiCo for his marketing ability (Brian, 2011). However, it was
during his tenure that co-founder Steve Jobs was stripped of all operational responsibility and
eventually ousted from the company (Brian, 2011). Ironically is was Steve Jobs that recruited
Sculley from Pepsi Co because of the Pepsi Generation and the Pepsi Challenge campaigns that
made them competitive with Coke (Scully, 2011) Sculley was able to turn the easy to use
Macintosh from a novelty into a “marketing wonder” (Fatsis, 1993).
Strengths and Weaknesses
The management and leadership styles of each member of Apple’s inner circle varied
drastically from leader to leader. Michael Scott was the first CEO. He once fired 40 employees
which was half the Apple II team (Brian, 2011). This action reflects that act of an autocratic
manager. An autocratic manager makes decisions that affect the organization without the
consultation of others (Jackson, 2013).
CAPS 600 MASTER MAJOR COMPREHENSIVE PROJECT 6
Mike Markkula was a major factor in getting Apple Computers off the ground. His first
role was to help write the first business plan (Mike Markkula Biography, 2013). He was
instrumental in securing investors and hiring Michael Scott as the first CEO because Wozniak
and Jobs were not ready to run the business. He installed himself as Chairmen of the Board of
Directors and also fired the first CEO Michael Scott in 1981 then installed himself as CEO until
Sculley was hired (Mike Markkula Biography, 2013). He was instrumental in getting Apple
Computers off the ground and into a thriving business (Brian, 2011). Markkula’s management
style is also more autocratic in the beginning, but as investors and a Board of Directors became
more established Markkula had to become a more democratic manager. A democratic manager
has to share the work load in order to get things accomplished (Jackson, 2013). As Apple grew,
managers had to start delegating and Markkula was a good example of this.
John Sculley’s business style was also different from those that he followed as CEO and
those that he worked with in Steve Jobs. Scully had very little technology experience and had to
defer to Jobs and other engineers because he had very little understanding of what they were
doing (Hormby, 2006). This type of management is considered a Lassiez Faire management.
Lassiez Faire Management style is when the manager gives their employees the freedom to do
what they believe should be done without interference (Jackson, 2013). Because Sculley had
little understanding of what most of Apple’s engineers were talking about, he had to take their
word for it when it came to what was best in the product development aspect of Apple
Computers.
CAPS 600 MASTER MAJOR COMPREHENSIVE PROJECT 7
1985-1996
John Sculley managed Apple Computers until 1993. In 1985 Apple Computers was
about to release the Apple II. Steve Jobs predicted that Apple II was going to sell 2 million
computers, but they only sold 250,000 instead largely due to flawed marketing. The Apple II
was intended for businesses, but they had no need for a computer with no hard drive or a printer
(Hormby, 2006). Because of the growing treat of IBM’s OS/2 the board pressured Sculley to
contain Jobs to prevent any more ill fated products to be released (Hormby, 2006).
Steve Jobs, unwilling to be reduced to a puppet role within the company he cofounded
responded by attempting to seize power from Sculley by going behind his back to the board
members (Hormby, 2006). The board voted on who they believed should be in control of Apple
and Sculley was selected unanimously (Hormby, 2006). Jobs resigned from Apple and stock
prices began to climb (Hormby, 2006).
Now with Jobs out of the picture, Sculley was free to reorganize Apple in his own image.
Under Job’s leadership, Apple was organized in divisions based on the product they produced.
Everything from the product development to marketing for the product was organized under the
same division (Hormby, 2006). There were three major divisions that were constantly at each
other’s throat. This caused marketers who never talked to each other to target the same market
and put products competing against each other (Hormby, 2006).
After the reorganization the product development and the marketing were held in one
division and manufacturing and sales would have their own separate divisions. The division
chiefs answered directly to Sculley (Hormby, 2006). This reorganization helped Apple yield one
of its biggest percentages of growth in its history (Hormby, 2006). By 1989 Apple was
CAPS 600 MASTER MAJOR COMPREHENSIVE PROJECT 8
considered the largest computer producer in the world; however Sculley’s detached leadership
style would prove to be a major hindrance to Apple’s growth for the future (Hormby, 2006).
Sculley’s leadership style was based on laissex faire which allows subordinates to do what they
think needs to be done when they believe it should be done (Jackson, 2013).
Sculley focused on new technologies to try and bolster Apple’s standing with consumers,
but Apple’s high cost to consumers eventually hurt them in the market (Fatsis, 1993). This
strategy of continually introducing new technologies incurred high engineering cost which
affected profit margins (Brian, 2011). Apple did not allow other computer companies to
reproduce their operating system, so Apple made money every time someone purchased an
Apple unlike their competitors. However, because their competitors partnered together they split
their research and development cost. Apple had to spend an average of 8.5% of their sales on
research and development (Paradise Lost, 1994).
Sculley resigned in 1993 after leading Apple for 10 years (Fatsis, 1993). He was
replaced by Michael Splinder who had run Apple’s European Operations (Brian, 2011). Splinder
was a very good strategist, but he was not good had managing the difficult personalities that
came with Apple (Hornby, 2006). The release of Windows 3.0 hurt Apple for a number of
reasons, but mainly because Apple failed to see the threat. Apple cost $1500 dollars more than
its windows counterpart which made it attractive to the average user (Hornby, 2006).
Because of all the problems they had with competitors, Spindler had to order
reorganization, laying off over 2500 workers (Fatsis, 1993). The company was restructured
again lumping the product development into markets rather than having it in one division
(Hornby, 2006). Spindler decided with the price was going on with the PCs, Apple was only
CAPS 600 MASTER MAJOR COMPREHENSIVE PROJECT 9
going to be able to compete in certain markets and they should not focus on the others (Hornby,
2006). Spindler began cutting employee benefits and morale began to suffer as a result (Hornby,
2006). Spindler attempted to grow Apple’s market share to 15%, but failed with the release of
Window 95. Apple was losing money and in 1996, Markula informed Spindler that the board at
Apple wanted his resignation (Hornby, 2006).
Strengths and Weaknesses
Sculley’s leadership style afforded in individuals the opportunity to do what needed to be
done, however because he became more and more detached as time went on it hurt Apple from
making the decisions that needed to be made in order to continue to be profitabe (Fatsis, 1993).
Although subordinates do enjoy the freedom to make decisions, Apple lacked the strong
leadership from the CEO position to make the appropriate decisions to change with the market
(Hormby, 2006). Essentially, Apple invested too much in future technologies that never left the
drawing board and spent too much money on research and development during this time frame
(Fatsis, 1993).
Spindler was a great strategist, but his cost cutting policies hurt employee morale. His
management style was autocratic, which is the style of leader who makes decisions without
consulting others (Jackson, 2013). Spindler was trying to control the loss of profits from the
price wars that Apple competitors were in the middle of, but Apple never cut manufacturing cost
to keep up with competitor’s prices. Competitors were able to share cost of research and
development, but Apple was on the outside looking in and was never able to find a partner to
help with the research and development. Apple lost out on the average computer consumer due
CAPS 600 MASTER MAJOR COMPREHENSIVE PROJECT 10
to the high cost of its machines (Hornby, 2006). Spindler also lost the trust of his employees due
to the cuts in employee benefits.
1997-2011
In 1996 Spindler was ousted and replaced by Gil Amelio who was the CEO of National
Semiconductor and sat on Apple’s Board of Directors (Brian, 2011). Amelio’s strategy was to
cut the Apple product line in half in order to become profitable again (Amelio Maps Apple's
Recovery, 1996). Amelio slashed Apple’s work force by 30% and created a more focused
product line, but he was ultimately unable to get the board of directors on his side (Kalish, 1997).
Amelio was a hands on type manager as he took on Macintosh’s quality issues (Brian,
2011). Amelio is also credited with purchasing Steve Job’s NeXT and bringing Jobs back to
Apple, however he was never able to turn around Apple’s financial issues of to gain consumer
confidence. The major issue with Amelio was that Apple computers continued to decline in
popularity (Bray, 1997).
In 1997 Steve Jobs was named interim CEO to replace Amelio (Brian, 2011). Jobs came
into a situation where Apple’s sales were tumbling losing over $2 Billion in two years (Apple;
Jobs Still Mum on CEO Search Board Vows Decision by End of the Year, 1997). Money woes
led Jobs recommend Apple change its product line and marketing strategy (Kalish, 1997).
Although Jobs’ role at the time was in an interim type bases, it was hard to attract a CEO with
talent because of Jobs commanding presence (Apple; Jobs Still Mum on CEO Search Board
Vows Decision by End of the Year, 1997).
In his role as interim CEO he was effective in gaining revenue including gaining a $150
million investment from Microsoft Corp. (Apple; Jobs Still Mum on CEO Search Board Vows
CAPS 600 MASTER MAJOR COMPREHENSIVE PROJECT 11
Decision by End of the Year, 1997). During this time frame Jobs led Apple to begin selling
computers on-line following in the steps of its PC competitors and also to discontinue 15 out of
the 19 products that Apple produced streamlining their product line up (Apple; Jobs Still Mum
on CEO Search Board Vows Decision by End of the Year, 1997).
In 2000 the interim title was removed and Jobs became the permanent CEO (Brian,
2011). Over the next 11 years, Apple would go on to major profitability by introducing new,
innovative products including the OSX, the iMac, iPod, iTunes, iPhone, and the iPad (Brian,
2011). Steve Jobs stepped down in 2011 due to health reasons and was replaced by Tim Cook
who was the COO.
Strengths and Weaknesses
Ameilo was a hands on manager who vowed to fix Apple’s quality issues, however he
was not able to focus on all of Apple’s issues. He especially was not able to focus on the issues
that were important to the Board of Directors and that was the company’s money issues.
Because he focused on that one big issue, his focus was not on all of the issues and he proved to
be a bad fit for Apple even though he had a great record as a turnaround type executive (Bray,
1997).
Jobs was creative and innovative. His management style was democratic and
participative. Whenever a good idea came around, Jobs would talk to others about the idea and
cultivate it, make it better and explore the possibilities (Morris, 2008). This was the strength of
Apple from the beginning, being innovative and going places no one has ever thought of going
before. Jobs focused Apple’s product line to just a few products; the iMac, iPod, iTunes, iPhone,
and the iPad, each of which made Apple huge profits (Apple Press Info, 2011).
CAPS 600 MASTER MAJOR COMPREHENSIVE PROJECT 12
Jobs had the unique ability to predict the future and that ability made him one of the best
business strategists of all time (McInerney, 2011). Jobs exerted strict accountability at every
level of the organization (McInerney, 2011). Jobs also had the ability to recruit the right people
and place them in the right position to get the most of their abilities (McInerney, 2011). This
gave Apple major advantages against their competitors.
2011-Present
Steve Jobs retired from Apple Computers amid health issues and was replaced in 2011 by
Tim Cook. Cook is no stranger at Apple; he has acted as CEO during numerous medical leaves
for former CEO, Steve Jobs (Brian, 2011). Cook formerly worked at Compaq as an executive
(Hartley, Tim Cook No Stranger To Steering The Ship, 2011). Many felt that it was a perfect
time to transition because the road map was clear for Apple and Jobs would stay on as an advisor
(Hartley, Tim Cook No Stranger To Steering The Ship, 2011).
Tim Cook was hired at Apple in 2002 as Executive Vice President of Worldwide Sales
and Operations and worked closely with Jobs over that time (Tim Cook Named COO of Apple,
2005). Tim Cook was named the permanent replacement for Steve Jobs in 2011, however he
came into the job having experience running the show before. Cook acted as Interim CEO in
2004, 2009, and in 2011 while Jobs was on medical leave (Brian, 2011).
Lately Cook and Apple has been the subject of bad publicity due to allegedly avoiding
taxes. Some reports that Apple was moving hundreds of billions of dollars overseas to avoid
paying billions in taxes (Wovlerton, 2013). The tax code requires that US companies pay tax on
the profits made overseas when they bring that cash back to the US, Apple has held its cash
overseas to avoid paying taxes on those profits (Wovlerton, 2013).
CAPS 600 MASTER MAJOR COMPREHENSIVE PROJECT 13
Strengths and Weaknesses
His management style is perceived to be much different than Job’s style. Many believe
that Cook is willing to listen to others ideas (Cox, 2012). This would make his leadership style
democratic (Jackson, 2013). During Cook’s leadership in the interim, Apple’s Stock prices rose
60% (Kane & Lublin, 2009). Steve Jobs was a micromanager who made Apple what it is today.
He handpicked the people who were in positions to manage the company including Cook
(Hartley, The house that Steve built; While Steve Jobs may cast a long shadow at Apple, it is up
to CEO Tim Cook to carry it forward, 2011).
Tim Cook had the opportunity to capitalize on working side by side with Steve Jobs for a
decade before taking over the reins. This allowed him to capitalize on the Steve Jobs magic and
keep the momentum going after Jobs’ passing (May, 2012). Cook was known as taking Job’s
remarkable ideas and turning them into realities with the manufacturing process (Bass &
Guglielmo, 2009). His experience in working with the supply chain and running the multibillion
dollar company has been a steady hand in determining the future at Apple Computers.
Future Learning
Researching the different managers that have run Apple Computers from its beginning
has been beneficial for me. The one thing that I have learned while doing this research is that a
manager has to recruit talented people and allow them freedom to use their talents, but hold them
accountable for their work. A manage has to be willing to listen to their people’s ideas and then
help them make those ideas a reality. That is what Steve Jobs and Tim Cook has done at Apple
to make them one of the most profitable companies in the world. As a manager it is important to
CAPS 600 MASTER MAJOR COMPREHENSIVE PROJECT 14
look at the successes and failures of other managers and learn from their actions to continue my
own personal growth.
Conclusion
Apple Computers saw many ups and downs over its history. The management styles and
decisions of the numerous CEOs steered Apple Computers down different paths. Some of the
CEOs wanted to get Apple into every market and developed many different models and stretched
Apple to its limits, but it was the managers who created fewer products that the consumer wanted
that made Apple the success it is today. Those management decisions that correctly predicted
the right strategy made Apple into the industry leader.
CAPS 600 MASTER MAJOR COMPREHENSIVE PROJECT 15
Bibliography
Amelio Maps Apple's Recovery. (1996, June 5). Candian Computer Reseller From ProQuest Database, p.
8.
Apple Press Info. (2011, July 19). Retrieved from Apple Reports Third Quarter Results:
http://www.apple.com/pr/library/2011/07/19Apple-Reports-Third-Quarter-Results.html
Apple; Jobs Still Mum on CEO Search Board Vows Decision by End of the Year. (1997, Nov 6). San
Francisco Examiner reterived from Proquest Database, p. C.1.
Bass, D., & Guglielmo, C. (2009, Jan 16). Calm Captain Cook; Tim Cook, The Man about to take the Helm
at Apple has Been Quietly Running The Show for Years. Natioal Post: reterived from ProQuest
Database, p. FP:5.
Bellis, M. (2013). Steve Wozniak. Retrieved from about.com: http://inventors.about.com/od/ComputerGeek/p/Steve-Wozniak.htm
Bray, H. (1997, July 10). Apple oust Chairman; Jobs in expanded role Amelio departs after 17 Months at
troubled computer firm; technology chief resigns. Boston Globe, p. 1:4.
Brian, M. (2011, August 25). A Look At Apple's CEOs from 1977 to 2011. Retrieved from The Next Web:
http://thenextweb.com/apple/2011/08/25/a-look-at-apples-ceos-from-1977-to-2011/
Brian, M. (2011, August 25). A Look at Apple's CEOs From 1977-2011. Retrieved from The Next Web:
http://thenextweb.com/apple/2011/08/25/a-look-at-apples-ceos-from-1977-to-2011/
Cox, J. (2012, October 4). One year after Jobs' death, Apple shows changes under Tim Cook: Current
Apple CEO less of a showman, more of a public figure. Network World (Online) Retreived from
Proquest Database.
Fatsis, S. (1993, October 16). Sculley Resigns Leadership After 10 Years With Apple. Journal Record, p. 0.
Hartley, M. (2011, Oct 7). The house that Steve built; While Steve Jobs may cast a long shadow at Apple,
it is up to CEO Tim Cook to carry it forward. Times - Colonist Retreived from ProQuest Database,
p. B.4.
Hartley, M. (2011, August 26). Tim Cook No Stranger To Steering The Ship. National Post Retreived from
ProQuest Database, p. FP1.
History of Apple Computer. (1997). Retrieved from Bryant University:
http://web.bryant.edu/~ehu/h364proj/fall_97/hill/happle.html
Hormby, T. (2006, Feburary 22). Growing Apple with the Macintosh: The Sculley Years. Retrieved from
LowEndMac.com: http://lowendmac.com/orchard/06/john-sculley-years-apple.html
CAPS 600 MASTER MAJOR COMPREHENSIVE PROJECT 16
Hornby, T. (2006, April 6). Michael Spindler: The Peter Principle at Apple. Retrieved from Low end Mac:
http://lowendmac.com/orchard/06/michael-spindler-apple.html
Jackson, B. (2013). The Different Type of Management Styles. Retrieved from Measuring
Managment.com: http://www.measuringmanagement.com/the-different-types-ofmanagement-styles/
Jackson, B. (2013). The Different Types of Management Styles. Retrieved from Measuring
Managment.com: http://www.measuringmanagement.com/the-different-types-ofmanagement-styles/
Kalish, D. E. (1997, July 10). APPLE COMPUTER EJECTS CEO IN SHAKE-UP EXPANDS LEADERSHIP ROLE OF
CO-FOUNDER. The Record, retrieved from Proquest Database, p. 1.
Kane, Y. I., & Lublin, J. S. (2009, June 24). Absent Jobs, Tim Cook emerges as key to Apple's core.
Wallstreet Journal Asia Retreived form ProQuest Database, p. 16.
May, P. (2012, August 23). Tim Cook End First Year as Apple's CEO on High Note. Oakland Tribune:
reterived from ProQuest Database.
McInerney, S. (2011, October 7). Steve Jobs: An Unconvential Leader. Retrieved from Sydney Morning
Herald: http://www.smh.com.au/executive-style/management/steve-jobs-an-unconventionalleader-20111007-1lcmo.html
Mike Markkula Biography. (2013). Retrieved from bio.com: http://www.biography.com/people/mikemarkkula-21187327
Morris, B. (2008, March 7). Steve Jobs Speaks Out. Retrieved from CNN Money:
http://money.cnn.com/galleries/2008/fortune/0803/gallery.jobsqna.fortune/7.html
Paradise Lost. (1994, December 10). The Economist: retrived from Proquest Central Database, p. 19.
Scully, J. (2011, Oct 6). John Sculley on Steve Jobs. Retrieved from Bloomberg Businessweek Magazine:
http://www.businessweek.com/magazine/john-sculley-on-steve-jobs-10062011.html
Tim Cook Named COO of Apple. (2005, October 14). PR Newswire; retreived from Proquest Database, p.
1.
Wovlerton, T. (2013, May 20). Apple's Tim Cook In Hot Seat as Reports Detail Apple's Tax Avoidance.
Oakland Tribune: retrieved from Proquest Database.
Yarrow, J. (2011, May 24). EXCLUSIVE: Interview With Apple's First CEO Michael Scott. Retrieved from
Business Insider: EXCLUSIVE: Interview With Apple's First CEO Michael ScottRead more:
http://www.businessinsider.com/apples-first-ceo-michael-scott-2011-5#ixzz2U90vCbTi
CAPS 600 MASTER MAJOR COMPREHENSIVE PROJECT 17