Case Study on Corporate Entrepreneurship: Steve Jobs of Apple

Corporate Entrepreneurship is broadly described as the process whereby an individual or a group of individuals, in association with an existing organization, create a new organization or instigate renewal or innovation within that organization. This definition includes two aspects of CE, a new business creation within existing organizations and renewal of the current strategy of the corporation. The vital notion is that corporations must capitalize on the entrepreneurial thinking of the managers to chase future evolution under changing and uncertain environments. Overall, studies suggest that Corporate Entrepreneurship activities are composed of three areas: idea generation, selection, and implementation or retention. Autonomy is an integral and central part of CE. Under conditions of change and uncertainty, providing autonomy to enterprising managers and encouraging them to elaborate on their own experience and ideas is a more promising approach than formal strategy development that relies solely on top management. It has been argued that although CE is partially due to individual characteristics of entrepreneurs who hold positions of middle and operational managers, CE is also a product of autonomy set up by such organizational dynamics as control and reward systems, top management support, resource availability, a supportive organizational structure, and a risk-taking culture. It is significant to recognize that autonomy here is linked to an incentive for risk averse entrepreneurial managers to take a risk of thinking and experimenting with new ideas i.e. “think outside the box”.

Corporate Entrepreneurship is the pursuit of entrepreneurial activities and ingenuities that alters the present organization through strategic rejuvenation processes, it may enable the extension of the corporation’s scope of operations into new realms. Similarly CE is the practice of organizational regeneration and transmits two diverse but connected phenomena. First is innovation and corporate venturing actions. Corporate venturing refers to creation of new businesses, which could either be internal or external. Example Apple Inc. creation of Macintosh, which divided the company into two group inside the company- Macintosh and the rest in early 1980. Second, CE symbolizes regeneration actions that enrich a corporations’ capacity to participate and take risks, which may or may not involve the addition of new businesses to a corporation. Here the example of second comings of Steve Jobs at Apple, where the development of iPod mp3 player regenerated the company in early 2000. CE is initiated at the top level of the corporation in order to create a companywide strategy and gain competitive advantage. Some scholars have labelled CE as Intrapreneurship. Intrapreneurship is derived from the knowledge of using entrepreneurial skills, innovation, and start-up business practices within an organization. As we will see from the case study of Apple Inc., Late Mr. Steve Jobs belonged to this category.

To sum up, the key notion that underlies the concept of CE or Intrapreneurship is a behavioral phenomenon and all corporations fall along a theoretical continuum that ranges from highly traditional to highly entrepreneurial. Entrepreneurial corporations are risk-taking, innovative, and proactive in their strategies. Similarly, entrepreneur managers are calculated risk takers, out of the box thinkers, confident individuals, who see opportunity where there is chaos. The combination strategy of organizations and individuals in the organizations who bear entrepreneur values is what creates an aura of CE.

Case Study: Steve Jobs of Apple Inc.

Steve Jobs was an entrepreneur who turned into an intrapreneur due to demands of the environment he worked in. The concept of corporate entrepreneur, initially called ‘Intrapreneuring’ is essentially start-up entrepreneurship turned inward. Apple was established on April 1st, 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne to sell the Apple I personal computer kit. The kits were hand-built by Wozniak. Steve Jobs was booted in 1985 and returned as CEO in 1997. By the time of his death in 2012 at the age of 56, he had transformed a company that was in such weak financial shape that it accepted a $150 million investment from Microsoft, into the most profitable technology company in the world. A consummate showman, Jobs was adept at explaining his vision to a mass audience and he built Apple into one of the world’s most powerful brands. The company’s annual revenues climbed to $108 billion (CNN most admired company 2012). Jobs and Woznick, both had a steady job but their entrepreneurial needs were unsatisfied and hence this gave rise to Apple Inc.

Case Study on Corporate Entrepreneurship - Steve Jobs of Apple

But by 1980, increased competition pooled with poor sales of the Apple III and its follow-up, the LISA, resulted in loss of its market share to IBM. Faced with bad sales, Steve Jobs introduced the Apple Macintosh in 1984. The first personal computer to feature a graphical-user interface controlled by a mouse, the Macintosh was a true breakthrough in terms of ease-of-use. This move by Apple demonstrated innovativeness and risk taking at the time of adverse conditions. This was partially because of Steve Jobs entrepreneur skills and partially of the entrepreneurial corporate strategies in place, this resulted in CE. Steve Jobs and his handpicked group of twenty Apple Computer engineers detached themselves from the other Apple employees to innovatively and intrapreneurially create the Mac. The MAC group, under Steve Jobs’ personal leadership, operated totally autonomously and without meddling from anyone at Apple. This is an example of how Steve Jobs exercised autonomy and disengaged from the organizational boundaries to lead a new business creation inside the same Apple. This action links up with the points of “Autonomous” and “Innovativeness” of the framework. It also fits in well with the definition of CE in question, since it created a new innovative business venture inside the organization.

However due to creative difference between Steve Jobs and the board, Jobs quit Apple in 1985. Here we see that Steve Jobs need for autonomy and power got in the way and eventually resulted in his leaving his beloved Apple Inc. Entrepreneur need to be autonomous and locus of power can sometimes result in unfavorable results. This marked a turbulent time for the company. It can be said that Apple lost it’s in the words of Schumpeter, J. A. (1952) “Creative destruction” entrepreneur and hence entrepreneur orientation was lost and so was CE culture. However as entrepreneurs are “wild spirits” and always looking for new challenges, later that year, using a share of the money from the stock sale, Steve launched NeXT Computer Co. with the objective of developing an innovative computer that would revolutionize higher education. Here we see the “never say die” spirit of the entrepreneur that Steve Jobs was. He despite all odds and failures stood back on his feet and created a new business venture. He portrayed attributes of innovativeness and proactiveness. He took a big risk with his savings and it could be argued that it was a calculated risk but others see it as a move to show his doubters that he can create “anything from nothing”.

Introduced in 1988, the NeXT computer boasted a host of innovations, But at $9,950, the it was too expensive to create enough sales to keep the company afloat. Undeterred, Jobs switched the company’s focus from hardware to software. He also began paying more attention to his other business, Pixar Animation Studios, which he had purchased from George Lucas in 1986. Here we see that Steve created branched out from the primary product and created an alternative business inside a business by utilizing his entrepreneurial skill of learning from failures. Steve Jobs could be said was a serial entrepreneur. He created a new organization and when the organization business was not enough for his appetite of entrepreneur orientation, he created a created a new business inside a business to satisfy the hunger of “creative destruction”. Following on the success, soon Apple bought NeXT for $400 million and re-appointed Jobs to Apple’s board of directors as an advisor to Apple chairman and CEO Gilbert F. Amelio. It was an act of desperation on Apple’s part. The physician of ancient Greece, Hippocrates in his aphorisms stated “For extreme diseases, extreme methods of cure, as to restriction, are most suitable.” Because they had failed to develop a next-generation Macintosh operating system and incurred heavy financial loss, the firm’s share of the PC market had dropped to just 5.3% , and they hoped that Jobs could help turn the company around . One could argue that the move to buy NeXT and bring back Steve Jobs was risky and innovative in some sense and that was Apple’s entrepreneur orientation as its best for many years. On the other hand one could say that emotional embedded reasons were behind Steve Jobs accepting the offer to work for Apple Inc.

Once again, head of Apple and having gained back the “locus of power” and “autonomy” , Steve went to his old style of leadership by example but the past taught him lessons and he fully learned from those mistakes like any other good entrepreneur would. Jobs struck a deal with Microsoft to help ensure Apple’s survival. Next, Jobs installed the G3 PowerPC microprocessor in all Apple computers, making them faster than competing Pentium PCs. He also spearheaded the development of the iMac, a new line of affordable home desktops, which debuted in August 1998 to rave reviews. Under Jobs’ leadership, Apple returned to success, and by the end of 1998, boasted sales of $5.9 billion. Jobs’ first major innovation was the introduction in 2001 of the original iPod and iTunes music store, which altered how digital music was purchased. In January 2007, after years of rumor’s, Jobs rocked consumer electronics with the introduction of the first iPhone, which has since undergone four successive renovations. The device was not the world’s first touchscreen handset, but its design and easy-to-use user interface became the standard for all smartphone aspirants. However in Apple’s iPhone case, they created market or developed a new market by innovating and reinventing the existing product itself. Apple’s reconfiguring of the smartphone market caused old-fashioned players, from Microsoft, Nokia, and RIM, to reconsider and alter their own mobile strategies in the wake of the disruption caused by the iPhone. Apple Inc. under Steve Jobs adopted an unconventionality style to strategic design to identify opportunities in its external environment and to position the company to seize these opportunities. Profoundly, this involved the leader, in this case Jobs to think not only about needs of stakeholders but also how the Apple can reinvent or create new markets, products, customers, and services.

Nevertheless, Jobs stressed that the company had a longer-term strategy past personal computers, and that he was waiting for the next big thing, which turned out to be iPod and iPhone. Apple’s corporate entrepreneur strategy was heavily influenced by Steve Jobs personal values of regular and steady entrepreneurial way of doing things. It is important that CE requires consistency in approach and regularity in behavior. Jobs succeeded at seizing opportunities because he was able to recognize and initiating trends by taking a calculated risk at the time. He perceived himself akin to Henry Ford who, when asked about the of the automobile stated, “If I’d have asked my customers what they wanted, they would have told me a faster horse”. Hence, it can be said that Steve Jobs had a “knack” of seizing opportunities because he was a risk taker and so did Apple Inc. as a company. Apple Inc. embraced “creative destruction” by altering the rules of the game in an IT industry. It also involves the aptitude to recognize industry dynamics and the key success factors that drive performance. Apple is known to be obsessed about the strategic action of its competitors and encourages his employees to do the same so that the company does not become complacent. They with the help of “aggressive marketing” are always looking to “compete intensively”, another dimension of the framework that is very relevant in Apple’s strategy. This is very clear from the mp3 devices market, where iPod’s monopoly has resulted in lack of competitors in the sector.

Leave a Reply

Your email address will not be published. Required fields are marked *