Principle and Practices of Management

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In 1976 Steven P. Jobs sold his Volkswagen van, and his partner Steven Wozniak sold his two programmable calculators, and they used the proceeds of $1,350 to build a circuit board in Jobs’s garage. So popular was the circuit board, which developed into the Apple II personal computer (PC), that in 1977 Jobs and Wozniak founded Apple Computer to make and sell it. By 1985 Apple’s sales had exploded to almost $2 billion, but in the same year Jobs was forced out of the company he founded. Jobs’s approach to management was a big part of the reason he lost control of Apple. Jobs saw his main task as leading the planning process to develop new and improved PCs. Although this was a good strategy, his management style was often arbitrary and overbearing. For example, Jobs often played favourites among the many project teams he created. His approach caused many conficts and led to fierce competition, many misunderstandings, and growing distrust among members of the different teams. Jobs’s abrasive management style also brought him into conflict with John Sculley, Apple’s CEO. Employees became unsure whether Jobs (the chairman) or Sculley was leading the company. Both managers were so busy competing for control of Apple that the task of ensuring its resources were being used efficiently was neglected. Apple’s costs soared, and its performance and profits fell. Apple’s directors became convinced Jobs’s management style was the heart of the problem and asked him to resign. After he left Apple, Jobs started new ventures. First he founded PC maker NEXT to develop a powerful new PC that would outperform Apple’s PCs. Then he founded Pixar, a computer animation company, which become a huge success after it made blockbuster movies such as Toy Story and Finding Nemo, both distributed by Walt Disney. In both these companies Jobs developed a clear vision for managers to follow, and he built strong management teams to lead the project teams developing the new PCs and movies. Jobs saw his main task as planning the companies’ future product development strategies. However, he left the actual tasks of leading and organizing to managers below him. He gave them the autonomy to put his vision into practice. In both companies he encouraged a culture of collaboration and innovation to champion creative thinking. Meanwhile Apple was struggling to compete against Michael Dell’s new, low-cost PCs loaded with Microsoft’s Windows software. Its performance was plummeting, and to help his old company survive, in 1996 Jobs convinced Apple to buy NEXT for $400 million and use its powerful operating system in new Apple PCs. Jobs began working inside Apple to lead its turnaround and was so successful that in 1997 he was asked to become its CEO. Jobs agreed and continued to put the new management skills he had developed over time to good use. The first thing he did was create a clear vision and goals to energize and motivate Apple employees. Jobs decided that to survive, Apple had to introduce state-of-the-art, stylish PCs and related digital equipment. He instituted an across-the-board planning process and created a team structure that allowed programmers and engineers to pool their skills to develop new PCs. He delegated considerable authority to the teams, but he also established strict timetables and challenging “stretch” goals, such as bringing new products to market as quickly as possible, for these groups. One result of these efforts was Apple’s sleek new line of iMac PCs, which were quickly followed by a wide range of futuristic PC-related products. In 2003 Jobs announced that Apple was starting a new service called iTunes, an online music store from which...
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