A decision Scenario from Apple Company.

1- Rewrite the papers to be easy to understand. (I want the papers to be understandable, I feel it is difficult to understand )
2- The two valuable lessons from Apple’s decisions are not clear please clarify the two lessons.
3- Make sure to answer most of the following questions:
– Could have avoided decision errors or missteps when reaching their conclusion.
– Could have improved the efficiency of their decision process
– Could learn from their decision process
– How they might have reached a better decision.
4- Delete the administrative man, and the economic man parts. (It is complicated)
5-please write a title for each paragraph

For only clarification, here are the old instructions:
1-Select a decision Scenario from Apple Company.
2- Investigate this decision scenario (in this case Apple Company)
3- Analyze the decision that was reached.
4- Answer the following questions:
– Could have avoided decision errors or missteps when reaching their conclusion.
– Could have improved the efficiency of their decision process
– Could learn from their decision process
– How they might have reached a better decision.

Notes:
* Areas of investigation
– Ambiguity and decision on product innovation
– Fostering a culture of risk taking in decision making
– Leadership

* Decision must be related to Apple company
* Sources must included (Administration Behavior 4th ed
Herbert A. Simon) and any article available online.

Administrative Behavior

Authors Name

Institutional Affiliation

 

 

 

 

 

 

 

 

Simon, (1997) text analyses administrative behavior providing a deep insight in the process of decision making within an organization. The author heavily depends on Chester Bernad’s work whereby he goes on to assess a firm’s decision making process right from the flawed conventional principals ultimately inventing a fresh approach to decision making. This modern approach embraces the Freudian concept of human psychology. Simon draws the rationale of his argument on the fact that organizations are not merely independent establishments that run on their own. On the contrary, they are a system whose functioning depends heavily on human decisions. These humans that run organizations are individuals that stem from given societies and natural environments which ideally, are responsible for their unique way of reasoning. This model that is derived from human backgrounds heavily defines organizational decision making.  This paper will analyze Apple’s decision regarding its Itune’s, Ipod and Ipad decisions which have been widely acclaimed as industry game changers in relation to market coverage or command.

On January 27 2010, Apple announced the launch of a device that would make the world a paperless society. The launch of the Ipad provided a critical lesson in decision making. At the launch of the device, in light of the company’s decisions in the previous decade, Apple was bound to face criticism from many quarters. Previously, Apple’s launch of the iPod was criticized on grounds that a majority of people perceived it to be just another music playing device. ITunes on the other hand received a harsh reception owing to the fact that it added little in terms of competition with other existing music stores especially peer to peer shared Napster and Kazaa. Additionally, when Apple ventured into the cell phone industry dominated by Nokia and Motorola, many considered it as an underdog in this market.  Apple Apps value on the other was criticized on grounds that it was not easy to understand. In light of these previous criticisms, when the Ipad was launched, many technology experts considered it to be a big ipod. However, Apple’s stern stance and rationale has given many critics a valuable lesson in decision making.

Apple’s decisions to launch these devices were based on one premise. The company simply intended to go on a new path. This was the case owing to the fact that an analysis of all products launched reveals that reality that they were meant to satisfy a new market space. Established business enterprises as such, can derive two valuable lessons from Apple’s decisions. Firstly, companies should perceive decisions based on a strategy as an opportunity to steer the firm into a new direction.  Businesses are always striving to widen their market base owing to the fact that increased markets are directly proportional to increased sales. It is from increased sales, that companies’ record increased profits and ultimately, growth. In the modern world where competition is stiff, increased markets do not always mean expanding coverage of geographical space by spreading the business into new regions. Although this method is also beneficial to the company, it comes at an increased cost. This is the case owing to the fact that the new establishment has to learn the new culture thus doubling given costs for instance, advertisement since parent company practices do not fit with the subsidiary firm in the host nation. However, the establishment of a new product designed to fulfill a different need that is yet unfulfilled is advantageous owing to the low cost since the business retains its geographical base. Additionally, owing to the subsequent improvements on the launched products as is the case for Apple where the company kept adding additional values to the initial products also helps in establishing a market command. This strategy earned Apple an additional $12 Billion in revenues.

Simon, (1997) drew distinctions between an empirical and normative level based on the manner in which things should ideally be and their position on values and facts. The implication here is that things and as such, management at Apple, are either classified as empirical or normative. The decisions that are a conclusion based on facts consist of items that are either knowledge or information regarding the firm itself and its environment. Value premises are made up of goals as well as morals. For Apple, the alternatives consisted of the ipod, ipad, itunes and iphone. The company’s values contain items that draw from either social or legislative premises. Facts on the other hand include different models, cost per unit, as well as budgets, (Simon, 1997).  The rationale in Apple’s decision was reached upon when the company decided to produce the different devices in order to fulfill its goal. This goal as described earlier was to set itself on a new path. As such, the company resolved that the devices were the best means to achieve their end. However, as Simon, (1997) observes the means and ends must be understood to be items defined on a hierarchy. In Apples decision, the alternatives that were considered included all the goods that the company had the capacity to produce. However, the ends are the items that were highly instrumental in creating the more final devices. The implication here is that Apple faced a hierarchy or series of ends. Apple’s rationality as such, is connected to the construction of chains of means and ends. Owing to the fact that goals may often depend on other elements in the chain, the force of such goals results in their hierarchical arrangement. Each level is regarded as an end to the items below it and as a mean critical in achieving the items above it (Simon, 1997).

When rational behavior is conceived under the lens of a means-end hierarchy, it obscures the element of comparison in the process of decision making. Additionally, it is hard to successfully separate factual items in the process of decision making from value elements. Lastly, it is not also possible to easily recognize the time variable in behavior that one engages in for a purpose. Simon contended that theoretical decisions made as alternative behaviors, consequences and possibilities answer the above objections. This stance is based on the fact that a decision is ideally a result of three steps. In the first step, Apple listed all its alternatives. After listing the alternatives the company then determined all the effects that follow each alternative after which it evaluated the sets of consequences.

When determining between many choices that it had prior to a business decision, Apple went through various needs in the society. In the information age where data, knowledge, entertainment and the internet are a market force to be reckoned with, Apple narrowed its decision to devices that were best suited to satisfy these needs. However, there are numerous devices that can satisfy the need for data in the present age. What Apple needed to do was to specify given needs and invent a unique way of satisfying these needs without the threat of substitute products. Ultimately, the company settled for a society where most individuals especially those in industrialized countries with a formidable amount of disposable income are environmentally conscious. As such, these conscious individuals want to play a role in preserving nature and put a stop to the specter of global warming. Subsequently, by inventing a product that will make modern society, a paperless society, the launch of the Ipad presented the company with a unique opportunity to establish a unique market command and grow its sales volume.  Additionally, the modern society being a class society, where individuals are segregated by rank, communicating via the cell-phone is not merely a way of exchanging information.  Contrastingly, it is evidence of prestige and class. Apple needed a device that could fulfill this urge for luxury. Moreover, the company also wanted to develop a product that would act like a small intellectual device for serving most of the functions that bulky paperwork and computers serve.  The answer lied in the iphone.

In the three steps described earlier including listing of all available alternatives, knowledge is critical owing to the fact that it is used in determining the consequences that result from different alternative strategies. The implication here is that Apple had a host of alternatives at its disposal. However, those that were chosen that is, the iPad, iPhone, iTunes and the iPod, represented the ideal choice for satisfying the company’s goal which was to set on a new path. The problem that arises out of a host of many alternatives has to do with the description of consequences, their evaluation as well as establishing their connection with varied alternatives of behaviors. The result of the evaluation is a list of consequences in a hierarchy as well as the choice of the respective strategy that alternates with a given alternative which is ideally ranked high on a list. This rationale according to Simon, (1997) reflects the economic man.

However, man is not only an economic man. He also is an administrative being. The economic man reflects an objective line of reasoning in a favorable model. In reality, this approach is limited in several ways. According to the economic man model, Apple is limited by its personnel’s habits, conscious skills, and reflexes. Additionally, the company is also limited by its staff’s conceptions and values of purpose. Under normal circumstances these values and conceptions are likely to draw certain differences with the organizations goals. Another limitation has to do with the degree of knowledge and available data. The implication here is that, compared to objective rationality, actual conduct is limited in several ways. The first limitation comes in light of the fact that rationale calls for full knowledge as well as anticipation of consequences that succeed each choice. This is especially the case owing to the fact that information about consequences is divided and uneven. The second limitation on the other hand stems from the fact that most questions asked prior to a decision lie in a future time. Subsequently, decision makers at Apple must invoke their sense of imagination by extending reason to a future time thus overcoming the shortcoming brought about by the lack of experience. However, it is almost impossible to perfectly prejudge a value. Lastly, making a decision based on rationality calls on the individual deciding to settle on a choice among varied possibilities or alternatives. Significant to note is the fact that most companies derive their decision after assessing very few alternatives. In the case of Apple, these alternatives included reproducing similar items in the market which satisfy the needs of the information age. The choice the company made was its resignation to produce the iPod, iPhone, ITunes and Ipad. Given the various limitations arising with regard with the economic man model, Simon proposed the concept of the administrative man.

The administrative man draws two significant variations with the economic man. Compared to the economic man that maximizes by way of selecting the best alternative from a host of available options, Apple as an organization run by administrative men strives to satisfy. As such, the alternatives that Apple had related to a course that ideally was good enough or satisfactory. Secondly, man as an economic being and as such, decision makers at Apple has the tendency to deal with the world bearing in mind all complexities. Administrative men on the other hand hold the view that the world is a drastically simplified framework. Made decisions are based on a simple picture of the circumstance that considers very few aspects that decision makers consider to be critical and highly relevant. Bakka and Fivesdal, summarize the administrative man as one who simplifies a situation at hand and also seeks a small number of alternatives in relation to the consequent effects of various alternatives. To an administrative man, decision processes are motivated to find and make a choice from all available alternatives that are thought to best satisfy a given need (Bakka and Fivesdal, 1986). It is rare to find a decision motivated by the need to maximize. Owing to the fact that the administrative man only invokes a limited number of available alternatives, the resulting decisions draw from simplified heuristics.  This does not always call for unrealistic or impossible insight (Bakka and Fivesdal, 1986).  The question that arises here is the best organizational perspective that is highly likely to be embraced.

In light of the question on organizational perspective, it is critical to seek how Apple managed to fit individual staff behavior into a single recognized pattern. This leads us into distinguishing between two major external and internal mechanisms. The external mechanisms have to do with the stimuli that inspired the company to attempt influencing individuals. Ideally, these mechanisms veer behavior in a given direction. Internal mechanisms on the other hand influence the individual’s response to the stimuli. Significant to note is the fact that it is a result of the internal mechanisms that behavior persists in a certain specific manner. Internal mechanisms relate to personal psychological features whose definition and function draws relations with psychology. External mechanisms on the other hand tend to be in focus owing to the fact that an individual other than the person they are targeting can invoke them.  This feature of external mechanisms allowed Apple to seek a crucial role in the company’s administrative organization. The implication here is that companies looking for strategy success should seek to influence items that are external from them. These are mainly consumers whereby in the case of Apple, they include the market for its iTunes, iPod, iPad, and Iphone.

 

 

 

 

References

Bakka, J. F. and Fivesdal, E. (1986)  Organizational Theory. Structure, Culture,

Processes, Arnold Busck, Denmark.

 

Simon, H. A. (1997). Administrative Behavior. A Study of Decision-Making Processes

            in Administrative Organization, Forth Edition, The Free Press, Collier

Macmillan Publishers, London, UK.