Diagnosing the Change in Microsoft and Apple Inc
The main goals of organizational development strategies are to improve and make performance more effective. Change diagnosis is one such strategy, whose aim is to make an assessment of current organizational performance levels in order to design and implement appropriate change initiatives (Saeed & Wang, 2014). Successful change diagnoses are done using diagnosis models. Several models have been developed that can be used by organizational managers in change diagnosis. The paper will apply Force Field Analysis in diagnosis of change in Microsoft and Apple companies. The reason for the choice of the model is its simplicity and the fact that the change that occurred in Apple and Microsoft were caused by external forces.
Read also Organizational Diagnostic Model : Google
Force Field Analysis
Developed by Kurt Lewin in 1940s, the “force field analysis” model describes the current organizational level of performance as an equilibrium achieved between the external forces that drive upward movement and internal forces that resist the movement (Burnes & Cooke, 2012). According to Lewin, change is forced by external driving forces, such as technology changes, change in consumer preferences, while restraining forces such as resistance to change, finances act as restraining forces for change process. When these two set of forces interact, an equilibrium position is attained, which describes current organization performance levels.
Application of Force Field Analysis to Microsoft
The introduction of new technological gadgets such as smart phone, change in the preferences of consumers and the creation of broadband, had profound performance on the performance of Microsoft (Huthwaite, 2007). Moreover, the other major competitors in the market such as mobile phone manufacturers and Apple Computer Company were increasingly eating into the company market share.
The Driving Forces
An analysis of the Microsoft Company using the “force field model” reveals the major driving forces as the environment, technological cycles and competition. The major technological changes especially in the computing world had major impact on Microsoft Company (Morschett, Schramm-Klein, & Zentes, 2015). Traditionally, Microsoft Company has been enjoying a huge market share in the manufacturer of computer software, thus having huge financial potential. However, the world economic recessions, and the entry of new competitors into the market due to increased technological innovations meant the company was no longer enjoying good financial health.
Moreover, the demands of the consumer market were rapidly changing. Most of the entrepreneurial startups were shifting from investor platforms to inventors of new technologies, extenders and platform of specialists. As organization embraced new challenges and developed new strategies in the market, their requirements shifted and this altered the product requirements in the market.
In addition, there was an added disadvantage of competition from the change in strategies from startup companies. For example, startups like Netscape Communications started without the premise of offering internet, the Oracle, IBM and Sun Microsystems sponsored the Java and network computer. According to (Lenard, 1999), the introduction of anti-Microsoft startups, the new technological devices such as tablets, smart phones and mobile internet connectivity threatened Microsoft share of the consumer software market.
The harsh economic downturn of 2012 led to slowed consumer purchasing powers. The year had also seen a huge innovation in the mobile devices industry (Morschett, Schramm-Klein, & Zentes, 2015). Many mobile manufacturers such as Samsung and Apple were focusing more on innovation of mobile devices that met the consumer preferences. Microsoft was struggling; the major focus was on the company major divisions. Its mobile services and device were not making enough profits. The pressures provided an impetus for new strategic directions.
The Restraining Forces
One of the major undoing of Microsoft Corporation was its focus on the divisions, which fostered little or no innovation. Microsoft’s major focus was on output and this was evident in its product division lines (Morschett, Schramm-Klein, & Zentes, 2015). The company had product division (the intelligent & other products), productivity and business processes, personal computing and corporate divisions. The divisional organizational structure prides itself on increased focus on specific products, with each division responsible for its own functions. Moreover, staffs in each division are able to report directly to the CEO and other top management. The employees in divisional structure are more of generalists, who can easily grasp specific tasks.
The other restraining force of change in Microsoft was the personnel owing to the already established organization culture. In order for Microsoft to transition and embrace the demands of the new technological changes, there was need for a change in the organizational structure to increase focus on innovation. However, the deeply rooted organizational culture can be hard to alter. According to (Mathews & Linski, 2016), change often can result in redundant workforce. The fear of loss of jobs and possible change in work environment (leading to new job descriptions) could trigger resistance to change initiatives.
Microsoft Equilibrium Performance
The driving forces of competition, technological cycles and market changes in preferences have been strong enough to alter the company performance and its strategic position. The forces of resistance to change and the change in the organization divisional structure were the major challenges. However, effective leadership has seen the company perform transitions. Microsoft now enjoys a functional organization structure with more emphasis on innovation of products and devices to meet the customer needs. The huge financial capability of the company enabled the transition during the recession. The present equilibrium performance has seen the company rise to become the leading manufacturer of computer software and mobile devices for organizations.
Application of Force Field Analysis to Apple Inc
Apple Inc. has been manufacturing computers for its consumers while adopting the exclusive rights strategy. The increased globalization and economic downturn of 2012 completely altered the computing market landscape (Clegg, Kornberger, & Pitsis, 2015). The company faced a number of driving and opposing forces of change.
The Change Driving Forces
Apple’s market share was under huge threat from Microsoft Company and other computer and mobile devices manufacturers in the market. The major change driving forces were competition, market dynamics, technological cycles and internal controls. The downturn in world economy led to shard decrease in global demands for computers. In addition, the company had inferior financial muscle compared to Microsoft, its major competitor in the market. This laid huge pressure on the company management on the need for strategic shift in the company focus.
Moreover, the “exclusive rights” strategy proved to be a major mistake by Apple Company. Microsoft allowed other companies to run its software on their computers at a license fee. This allowed Microsoft to specialize in massive software production, making software that could run in all IBM computers. Apple exclave rights meant that the company software could only run in Apple computers. The strategy gave Microsoft a competitive advantage in software manufacture and sale. Indeed, it is form the financial perspectives of this strategic mistake that the company internal controls sought to rectify it’s through the strategic shift in its business operations.
The Restraining Forces
The Apple Inc. faced significant drop in its computer hardware and software sales at time when the world economy was its low. Moreover, the company’s reduced revenues meant that new initiatives were then a priority. The major restraining forces for the new initiatives were weak financial position of the company, which were reflected by its dwindling revenues compared to those of Microsoft Corp. The change initiatives were conceived by the organization management, which created potential resistance form organization employees.
Apple Current Equilibrium Performance
The interplay of the driving and restraining forces in Apple led to a total shift in the company’s market strategy. Apple Inc. focused more on creativity and innovation in its devices and personal computer electronics. Moreover, the company rectified its initial mistake and introduced licensing in its mobile hardware and software manufacture. The company is now a big rival to Microsoft, generating huge annual revenues.
SWOT is an acronym that means Strength, Weaknesses, Opportunities and Threats. The following is a summary of the major SWOT components of the two companies.
|Huge financial capabilities, huge market share
|Poor organizational structure
|Emerging markets due to increased license with other manufacturers
|New market entrants
|Good organizational structure, great innovation
|Weak financial capabilities
|Emerging consumer electronics market
|New device manufacturers
The major strength of Microsoft Company is its superior financial capabilities. The company adopted licensing strategy, which allowed other computer companies to run its software at a fee. This enabled the company to concentrate on manufacture of software and selling them at a license fee. The mass use of the company software allowed the company to generate huge revenues, making its software available in almost all IBM computers. However, the divisional organizational structure was the company’s major weaknesses. The emerging markets due to increased use of computers and other mobile devices offers opportunities to the company, while the entry of new device and software manufactures serve as threats. The emergence of companies such as Samsung and the innovative strategy in Apple are major source of threats to the Microsoft market share.
The Apple Company prides itself as having great innovation and creativity, the core company strategy. However, poor revenues owing to strategic mistake of exclusive rights offer weak financial capabilities. This is the major weakness of the company. The emerging consumer electronic market in Asia, African and Europe offers new opportunities for the growth of the company. While the continued entry on new mobile software and hardware manufacturers such as Samsung, LG and HTC offer massive threats to the company market share.
Comparison of Microsoft and Apple Inc. Analyses
The driving forces in Microsoft change initiatives were mainly external forces of market (environment), technological cycles and changes in consumer preferences. The new technology, entrance of new players in software manufacture and changing consumer preferences led to change in company revenues. The company had to respond to these pressures, which led to a change in the market strategy. However, the major restraining forces of change were internal resistance to change and the divisional structure. This made change in Microsoft more challenging.
Although Apple like Microsoft had the elements of market forces, technological cycles and change in consumer preferences as the major driving forces, the other driving force of change in the company was internal controls. Unlike Microsoft that enjoyed huge financial capabilities, Apple had weaker financial muscle and this drove the company to change its market strategy in order to remain competitive in the market and generate more revenues. The restraining forces of change in Apple were resistance to change and weaker financial capacity to implement the new market strategies.
The interplay between the driving and restraining forces led to new equilibrium performance being attained by the two companies. Microsoft and Apple successfully implemented new market strategies. Microsoft was able to successfully change its structure from divisional to functional structure, and the results of the new market strategy in Microsoft is establishment of the company as world’s leading manufacturer of computer hardware and software. In addition the company was able to add consumer electronics to its market segment, enabling it to gather for consumer needs and generate massive revenues.
The shift in market strategy in Apple led the company increasing focus on creativity and innovation. The company rectified its initial strategic mistake of exclusive rights and adopted Microsoft style licensing of its software and hardware productions at license fee. Apple’s new strategy has seen the company become one of the best selling brands with huge customer satisfaction. Apple products have now been synonymous with the term “quality”, which has allowed the company to reap premium prices for its products. The company’s revenues now rival Microsoft and show no signs of falling despite even the tough economic climate.
Potential Areas of Resistance
The potential area of resistance in Microsoft is the organization employees, who may be reluctant to move from their divisional to functional organizational structure. The forces that drive change in Microsoft demands a change in the company market strategy which will greatly alter the organization structure. The change in organization structure is likely to be faced with huge resistance for the employees owing to uncertainty regarding their jobs and changes in job descriptions which could cause impact of job motivation. According to (Smollan, 2011), most employees are reluctant to move out of their comfort zones. According to the author, such employees will fight any change initiatives to retain status quo.
The strategy that Microsoft could use to respond to resistance to organization structure change is through effective communication. According to (Mushtaq, n.d.), successful change implementation should be communicated well to avoid any resistance. Good communication from change managers help to remove any suspicions and confusion regarding reasons for change and the possible results. It will also help to make employees understand the need for change implementation, thus making them to facilitate than resist change.
The main resistance to change in Apple is the reluctance of the management to implement the change initiatives owing to weak financial capability of the company. The new strategic shift in Apple demands a change in market strategy with more focus on innovation and creativity, which demands huge financial investment on talent, market research and training. The weak financial capability is a huge restraining force, which will impede the implementation of the new initiatives.
The Apple resistance to change can be responded through implementation of small changes at a time. For example, the company could choose to invest first in talent and training then focus on implementation of the new market strategy. This would give the company enough time for implementation, allowing the revenues generated to be allocated to critical components of the company. Moreover, there is need for effective communication of the goals and objectives of the change initiatives in order to respond to the resistance from the change managers, who would view it as a threat to company bottom line.
Recommendations for Further Actions
Apple products continue to be sold at premium prices, making them devices for the financially stable. However, there remains huge market among the middle income earners in Africa, Asia and North and South America. The paper recommends that the company makes changes in production systems, innovation and marketing to create low cost computers and other consumer devices that can serve such markets. There remains huge potential for increased revenues in these markets, which Apple is yet to exploit owing to its relatively expensive products that serve only high income earners.
The Microsoft mobile segment has failed to live up to the expectations upon the purchase of Nokia. The bulk of the company revenues come from computer hardware and software sakes, while the mobile segment makes minimal profits. The paper recommends Microsoft to adopt innovation to be the core strategy at its mobile division. This will allow the company to focus more on producing competitive mobile devices that competes with those of Apple, HTC, Samsung and Sony. Moreover, it is recommended that the company moves from the windows based mobile platform to the android operating system. The windows operating system is not compatible with most web based applications, unlike android, whose open nature allows other companies to develop compatible applications that can run on the OS. Perhaps this was a strategic mistake that Microsoft should consider revisiting.