Microsoft and Apple: External Environment - Assignment Example

Organization Theory Term Project 2 apple and Microsoft Insert Insert Part 3 Many companies including Microsoft and Apple are experiencing surprising changes in the external environment. They both face similar uncertainties in the external environment. The external environment, including customers, economy, competition, public opinion and even resources are the sources of major threats facing the two companies today. Customers are unpredictable, and they are the ones to determine the stability of the organization. Customers may vary according to the demographic changes that are the age, the gender, and social class. The type of products an organization will produce will determine their customers and the way to retain their customers. Customer, on the other hand, can have product preference changes, and this will determine the type of the products that they buy. If a client decides to take an alternative product, it is a loss to the company (Cusumano, 2007). Hence, it becomes unstable. The customers preference is uncertain it cannot be predicted hence the reason many businesses become unstable. Microsoft and Apple companies face this problem. The economy of a country is uncertain, and this uncertainty affects the performance of the organizations. If a state’s economy drops, it will affect the company negatively hence it becomes unstable. Both Microsoft and Apple Company will be affected negatively since if the economy if bad the sales of their products will reduce the company hence, becomes volatile and vice versa if the economy is good (Inside Apple: how Americas most admired--and secretive--company really works, 2012). Government policies determine the laws and regulations of a given country. Countries legislation and regulations are amended from time to time, and that will determine the companies are working there. If the conditions are not favorable, it will affect the organizations negatively. The rules of a country will ascertain the stability of the organization if the rules are favorable the organization will be stable. Competition cannot be predicted by organization thought they come up with strategies to outsmart each other. Competition among organizations is healthy but at times, its bad if the competition is high. For instance, if an organization has other related industries in the same countries it might be hard for them to do well especially if the other organization as a strong brand name. Getting customers to accept the new products may be hard since they may be having product loyalty. Global competition is another problem already established an organization with strong brand compete with upcoming with companies (Kaliannan & Ponnusamy, 2014). For instance, a company with the strong brand name in its own country may become a threat to an upcoming company in its own country. The future of the organization cannot be certain in terms of the resources. The availability of the resources can be a problem to the organization in the future. An organization will require finance, labor, and materials in order to run its activities smoothly. The labor market can be unpredictable in the coming years there might be a shortage of labor, and this will lead to increase in the salaries that are paid hence affecting the company negatively. Finances are also important in the smooth running of the business lack of finances will lead to uncertainty in the business (Melkman, 2000). An organization cannot be operated without materials since they are required to get the finished product, which will in turn increase the production of the company and the sale. Stable–Unstable Dimension The stable/unstable condition refers to whether or not the elements found in the environment are dynamic. The environment is considered stable if its environmental elements are able to remain unchanged in the market for a long time usually several months or couple of years. The environment is considered unstable if environmental elements change from time to time abruptly. Instability occurs when competition is high, for instance, the competitors introducing new products and doing a lot of advertisement (Nicolás Marín Ximénez & J. Sanz, 2014). We new products The introduction of new products in the market may cause instability if the customer reacts negatively to the product. Most organizational environments are becoming unstable due to the uncertainties present. They include customers, few competitors, and suppliers. Simple-Complex Dimension The simple/complex dimension refers to the complexities and differences of external elements found in the environment that are relevant to the operations of an organization. Many diverse external elements are able to interact and influence the companies in a complex environment while, in a simple environment, very few external elements influence the companies (Suder & Payte, 2006). The increase in the number of complexities in the external environment increases the positions and departments in a company. They include the government regulatory and business granting agencies. The simple/complex and stable/unstable dimensions are combined and assessed in order to arrive at a level of environmental uncertainty. A simple, stable environment with few external elements has few uncertainties while the complex, unstable environment has more external elements and hence more uncertainties. These external elements are hard to predict and cause unexpected effects to the initiatives of the organization assessing environmental uncertainty. Fast changes create uncertainties in the to the management. Microsoft Company has simple, stable environment hence it does experience many uncertainties like Apple company whose external environment is complex and unstable (Xia, 2012). Part 4 Comparing Microsoft and Apple Company Apple company employee satisfaction performance is a bit lower than that of Microsoft Company. The Apple employees work for many hours, but they get overpay, and they are involved in their workings hence feel part of the organization (Xia, 2012). Apple pays 10% health cover to its employees compared to Microsoft, which pays 100%. The Microsoft employees, therefore, have a greater job satisfaction. Microsoft Company has customers who are loyal to their products. They do not mind what they are offered but have full trust in the company, unlike the Apple whose customers are not loyal. They just want to buy products for the good they offer (Suder & Payte, 2006). Apple Company produces quality products as compared to Microsoft. Microsoft has already established in the market hence there is no need to make quality products. Apple Company has been innovating for several years now while Microsoft Company is trying to be innovative too in order to avoid competition from the Apple. References Cusumano, M. (2007). What road ahead for Microsoft the company?. Commun. ACM, 50(2), 15. doi:10.1145/1216016.1216036 Inside Apple: How America is most admired--and secretive--, the company really works. (2012). Choice Reviews Online, 49(11), 49-6372-49-6372. doi:10.5860/choice 49-6372 Kaliannan, M., & Ponnusamy, V. (2014). Apple was sweeter when Steve Jobs held sway. Hum Res Mgt Intl Digest, 22(4), 25-28. doi:10.1108/hrmid-07-2014-0084 Melkman, A. (2000). The 12 Simple Secrets of Microsoft Management: How to Think and Act Like a Microsoft Manager and Take Your Company to the Top. Long Range Planning, 33(2), 275-276. doi:10.1016/s0024-6301(00)00021-2 Nicolás Marian Ximénez, J., & J. Sanz, L. (2014). Financial decision-making in a high-growth company: the case of Apple incorporated. Management Decision, 52(9), 1591-1610. doi:10.1108/md-10-2013-0557 Suder, G., & Payte, J. (2006). Microsoft: A case in cross-company transformation. Thunderbird International Business Review, 48(4), 555-596. doi:10.1002/tie.20109 Xia, B. (2012). Friends Technology Company: a case study of Biztalk Server - a strategic Microsoft technology. IJBIS, 10(3), 298. doi:10.1504/ijbis.2012.047532 Read More