|Type of paper:||Dissertation|
|Categories:||Company Leadership style Leadership management|
The management of the company is exercised by people with the authority to set goals and make appropriate decisions so that they are achieved and direct and coordinate the work of other people. Therefore, managers make decisions regarding the activity of the company, from the most important - such as the objectives to be achieved by the company in the next three years, the launch of new products or the introduction into new markets, to the most routine and minor decisions, such as organizing the work shifts of the production plant, choosing the system for making employee payrolls, etc.
Apple's success is associated with the highly differentiated managerial style of Steve Jobs during his leadership years, a cycle considered as essential for the successes later obtained by Tim Cook. This paper seek to examine the impact of management styles on the financial performance of Apple Inc. under Steve Jobs and Tim Cook as CEO. In their own individual ways, both Steve Jobs and Tim Cook have made Apple the giant company it is with the highest market valuation of a trillion dollars.
Company management aims to integrate and coordinate the efforts of the different members of the organization so that both the objectives of the company and those of the company are carried out the people who make it up ((Van Der Aalst, La Rosa & Santoro, 2016). Management implies the ostentation of formal authority. According to Grant (2016), leadership is defined as a situation of superiority in which a company, a product, or an economic sector is located, within its scope. Khan (2017), defines leadership as a class of influence through which members of an organization can be voluntarily collaborated to achieve the objectives.
The leader is one who can influence the attitudes, opinions, or actions of the members of a group because they voluntarily decide to be affected by the leader. In this sense, the leader always has some level of charismatic and expert power. The management style is defined as the behaviors that a manager usually applies to interact with the collaborators that make up their work team (Kreutzer, Neugebauer & Pattloch, 2017). Every leader has a specific leadership style. Still, not everyone who has a particular style of leadership is a leader because to be a leader; they need supporters who support them and agree with the benefits that leadership provides, always maintaining consistency.
In the current business environment, being a good manager has often been faced with difficulty. Issues such as the technological revolution, the imposition of standards that are increasingly stricter for a capital increase, new management models, greater secrecy of labor markets, and increased competition for the acquisition of leadership positions (positions increasingly scarce), have raised the demands today to succeed in business. Given these challenges, executives need action models that guide their behavior (Andersen, 2018).
Effective leadership involves the formulation of ideas and actions that mobilize and motivate others to achieve common company goals and purposes (Block, 2016). The leader or manager must acquire the support of others without imposing and giving orders and know how to set an example by being a model for others. They must also be able to convey credibility from their actions; that they know how to generate a shared vision and mutual trust to deliver set goals. Leaders must also promote synergies both inside and outside the organization and have a proactive attitude and approach. They must also communicate changes and modifications to workers and the actions they entail. As Anderson (2018) stipulates, proper management is focused on fostering collaboration and teamwork and creating innovation and creativity.
This study explores the knowledge bases about leadership in companies, showing different theories, and then focusing on the managerial style of Steve Jobs and Tim Cook. The analysis aims to compare the managerial styles of the two Apple CEOs and the impact of their leadership roles on the company's financial performance. Steve Job's management saw the highest growth and multiplication of Apple's value while his successor, Tim Cook, led the company to its highest market valuation.
Conceptual FrameworkConcept of Leadership and Leadership DifferencesGreer (2017) defines leadership as an influence. According to the author, a leader must have the ability to get followers. Greer exposes the idea of the "power triangle" with three essential components; communication, recognition, and influence. Effective communication leads to recognition and recognition, in turn, leads to influence. According to the author, five levels to reach the ideal leadership situation can be established. These levels must progress chronologically, meaning that the next one cannot be achieved without having gone through the previous one (Greer, 2016).
- Level 1: Position- At this level, a leader is distinguished from a boss, separating the two concepts and treating them independently. Being a leader goes beyond having a title or a position of command, but is about being the person that people voluntarily follow and trust. The boss manages his workers. The leader is the one who trains them. The boss depends on authority - the leader of goodwill. The boss inspires fear. The leader inspires enthusiasm. The boss says: "I." The leader says: "We." The boss fixes the blame for the failure. The leader fixes the failure. The boss knows how something is done. The leader shows how it is done. The boss says: "Go." The leader says: "Let's go!" (Greer, 2017).
- Level 2: Permission- The key to this level is that leadership begins in the heart, not in the head. People unable to build strong and lasting relationships soon discover that they are unable to sustain effective and permanent leadership. (Greer, 2017).
- Level 3: Production- At this level, people are already oriented towards results and meet to achieve goals.
- Level 4: Human Development- At this level, workers value the work that the leader has done for them. It is an ideal level to stay long. Within this level, the primary responsibility of a leader is to empower others to do the job.
- Level 5: Personality- Personality can only be achieved by having a lifetime working and being a leader. A good personality can inspire positivity among the staff, which is vital for achieving company goals (Greer, 2017).
The psychologist Kurt Lewin illustrated three styles of leadership that today remain the most common in the world of organizations: authoritarian, democratic, and Laissez-faire (Billig, 2015).
Transformational and Transactional Theories
The theory of transformational leadership states that a person interacts with others and can create a stable relationship that results in a high percentage of trust, which will later result in increased motivation, both intrinsic and extrinsic, between leaders and followers (Kremer, Villamor & Aguinis, 2019). The essence of transformational theories is to transform their followers through their inspiring nature and with their charismatic personalities. The rules are flexible, always taking into account the rules of the group. All these attributes provide a sense of belonging for the followers, as they can quickly identify the leader and his purpose (Kremer et al., 2019).
In transformational leadership, workers accept and commit to fulfilling the objective pursued by the organization, leaving aside their interests to focus on group interests. Various dimensions of transformational leadership can be identified as follows (Kremer et al., 2019):
- Attributed Idealized Influence (AII): It is defined as the leader's ability to influence followers by providing a sense of vision and mission, which inspires pride, respect, the pursuit of achievement and trust, and increases optimism.
- Behavioral Idealized Influence (BII): Influencing the behavior of followers towards the achievement of goals and objectives.
- Inspiration (I). The leader tries to act as a model for his followers, transmits a vision, and uses symbols to focus efforts.
- Intellectual Stimulation (IS). The leader, based on providing new ideas and rethinking the concepts and ways of doing things intellectually stimulates followers.
Individualized Consideration (IC). Leaders take into consideration the individual development needs of each of the followers; they perform a personalized follow-up, but this is not seen as a control that the leader exerts on his workers, but their actions tend more to guide. In this dimension, leaders demonstrate care, empathy, and propose challenges and opportunities for their workers. The leader is usually active and communicative (Andersen, 2018). Individualized consideration is realized through a Transactional Process Bass, a process by which the leader tries to know what the follower wishes to obtain from their work and that they obtain it as long as they are justified by their performance. They are characterized by a transaction made between the leader and the followers, which generates a positive and mutually beneficial relationship.
Transactional theories result in motivational value. The leader must find a means to align the objectives of the company and the workers and to appropriately reward (or punish) their followers. In other words, transactional leaders are more efficient when they develop a mutually reinforcing environment, for which the individual and the objectives of the organization are in tune. The dimensions of Transactional Leadership present two forms: an active one, in which the leader works to prevent errors from occurring, and a passive way that acts once the error has occurred. The following describes both active and passive behaviors:
- Contingent Reinforcement (CR) - The leader identifies the needs of the followers and makes a transaction between the needs of the group and those of each person. Reward or sanction is based on the fulfillment of the objectives.
- Active Exception Address- The leader seeks to follow the rules to prevent the occurrence of errors and deviations and thus taking corrective actions.
- Address for Passive Exception- The leader only appears when the rules are not met. Their interventions are usually negative and critical to avoid that the objectives do not deviate from their course.
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