Table of Contents

1. INTRODUCTION.........................................................................................................................2
1.1 APPLE INC....................................................................................................................................2
1.2 Organisation Structure of Apple..................................................................................................3
2. Management Information System.................................................................................................4
2.1 Introduction.................................................................................................................................4
2.2 Importance of Information..........................................................................................................5
2.3 Strategic Information Management............................................................................................5
2.4 Virtual Business Organisation......................................................................................................5
2.5 Information Systems in Apple Inc................................................................................................6
3. CONCLUSION.................................................................................................................................7
4. FUTURE RECOMMENDATIONS......................................................................................................7
4.1 Intellectual Property Management..............................................................................................7
4.2 Information Security Management..............................................................................................8
4.3 Corporate Social Responsibility and Information Systems...........................................................8
4.4 People Management from the Prism of Information Systems.....................................................8
4.5 Flaws in the Present System........................................................................................................9
4.6 Feedback Mechanism..................................................................................................................9
4.7 Outsourcing versus Internalisation..............................................................................................9
REFERENCES........................................................................................................................................11
 MANAGING INFORMATION SYSTEMS: A STUDY OF APPLE INC

1. INTRODUCTION

This paper would discuss the issue of Managing Information systems in a

corporate environment. The issue of information communication within the
organisation would be studied and how lack of information to the concerned decision
makers would impact the overall efficacy of the organisation would be brought
forward. Finally the learner would conclude by providing recommendations to
overcome these issues in an international environment.

The company chosen for this paper is Apple Inc as information systems in a
Information Technology based company would be interesting and highly important to
look into. The company has a global presence with manufacturing, assembling,
retailing, supply chain management, being the core activities of the company along
with the important element of research and development which is the key
differentiator for the company in terms of being the leader in the industry in relation
to innovation.

1.1 APPLE INC

Before we go ahead and analyse the issues related to information system, we

would first have a brief overview of the company which would enable us to view the
overall impact of information systems in the organisation and its relevance to the
different activities undertaken by the company.

Apple as a company was incorporated on 1 st April 1976 by three persons

namely Steve Jobs, Steve Wozniak and Ronald G Wayne. The company received its
first order for computers from “Byte Shop Computer Store” for 50 computers.
However, the company did not have the financial depth that was required to match
the big players of that time like IBM, HP, Atari and Commodore. Luckily, they were
able to raise venture capital from Mike Markkula and set up their new corporate HQ
in Cupertino, California (Newyorktimes, 2007).

Apple was successful with the next product which was launched and branded
as Apple II which was in production for a record amount of time from April 1977 to
November 1993. This has been the successful product and created the pathway for
the growth of the organisation and by 1980 the company several thousand
employees with a market share of 50% and was selling computers internationally.

The above factors created the operational and management hurdles as there
was lack of clarity and communication between the different board of directors were
focussed to bring in efficiency and make the company a stereotypical one was
progressively implemented by the new investors and the new employees which led
to a strong divide between the old and new set of employees. In this phase the
organisation underwent a change from being a functional organisation to a product
oriented organisation. There by segmenting and creating different departments
based on product lines like Apple II, Macintosh, Apple III, Lisa, manufacturing, slaes
and service, human resources, administration, etc., (Apple.com, 2010).

Let us understand the corporate structure in the organisation as that would

provide us with an understanding of where the communication gap exists and how
the same can be addressed through the effective deployment of management
information systems.

The company’s core and support activities are listed below for ease of
understanding of the functions that are undertaken by the company.

Source: Lliev, et al, 2004, Strategic Audit, Dublin Institute of Technology.

1.2 Organisation Structure of Apple

The organisational structure at Apple has undergone changes and in its

present form it looks as follows:
Source: Lliev, et al, 2004, Strategic Audit, Dublin Institute of Technology.

As can be seen from the above the structure of the organisation is flatter and
also aligned with the functional roles of the different directors this greatly enhances
the control on organisational activities and keeps the focus on the core
competencies of the different departments (Hill & Jones, 2004).

This kind of structure creates numerous possibilities for the lower level
managers to take initiative and thereby foster company’s strength (BusinessWeek,
2004).

The next level of the organisation is structured as follows which can be

considered as the mid managerial level, this is segregated according to the
geographies that they serve, like for example the Americas, Europe, Japan, and
finally Retail. This kind of structure at the mid managerial level enables the company
to be responsive and understand the operational issues of the different geographies
that they operate in. This enables the company to leverage its skills globally (Hill &
Jones, 2004).

The difference in structure at the various levels creates a concern in terms of

communication as the matrix structure is created in the lower levels, the functional
reporting to the corporate directors and the operational elements being reported to
the regional directors. In this juncture it would be prudent to understand the
effectiveness of information systems to enable and sustain this issue of dual
reporting and how the same can be turned into an advantage by the company.

2. Management Information System

2.1 Introduction

Today the society is changing from an industrial society to an information society.

Modern societies are driven by technology and large organisations which operate on
trans-national networks without any geographical boundaries, all this require highly
efficient communication systems. Hence, Management Information Systems can be
described as the key differentiators which are affecting the way companies are
differentiating their products and services (Murdick & Munson, 2004).

They further describe Management Information System as “the system that

monitors and retrieves data from the environment, captures data from transactions
and operations with the firm, filters, organizes and selects data and presents them as
information to managers, and provides the means for managers to generate
information as desired”. Modern management is undergoing changes which can be
witnessed in progressive companies where the management is becoming system
oriented, information is made available to managers as needed, planning and control
are increasingly tied to operational systems of implementation due to availability of
information (Murdick & Munson, 2004).

2.2 Importance of Information

There are different attributes to information like the purpose for which information
is being collected, mode and format of information, efficiency of the information,
frequency of information reporting, cost of information gathering and the reliability
and precision of the information being gathered (Murdick & Munson, 2004).

Any organisation’s context has a definitive influence on the problems faced

and solutions provided. The problems are shaped by the constraints the organisation
faces and the organisation structure that is in place in the organisation. When
unanticipated events occur in the problem solving process we identify them as
contingencies (Thompson, 1967). “This indicate that the organisation’s structure, its
technology or technical process and its environment will all be significant elements of
the context affecting its decision-making” (Sauer, 1993).

2.3 Strategic Information Management

On a strategic information management level Agarwal and Sambamurthy

(2009) state the following principles that are required to be borne in mind when the
information system management is planned and they state that there is no one “best”
IT organisational structure, however it needs to be adaptive and should provide
value proposition, synchronisation of the model to the current situation faced in the
organisation, organise according to the new developments in the organisation.

There have been recent developments with regard to Strategic Information

Planning (SIP), however the key focus is still relied on the planning process rather
than the result i.e., information strategy (Teubner and Mocker, 2009). The other
aspect being discussed is the element of fusion between the business strategy and
IT governance strategy in the overall blueprint which is developed for the
organisation (Hodgkinson, 1996).

2.4 Virtual Business Organisation

The other development which is being witnessed is in the area of virtual

business or virtual organisation which brings in a third dimension to the issue of
information management apart from the above issues of communication and
strategy. A virtual organisation has been defined by Porter (1990) as “a collection of
business units in which people and work processes from the business units interact
intensively in order to perform work which benefits all”. Even though the virtual
organisation concept is not too prevalent however the elements of the concept are
being picked up by different organisations in segments to enable the utilisation of the
same to build comparative competitive advantages in the market place through the
leveraging of the different information technology systems that are currently available
(Davidow & Malone, 1993).

The above concepts give guidance on the multitude of issues that are being
faced by the organisation. And shows how an effective deployment of managing
information system is required to ensure that the plethora of data which is being
collected can be assimilated to the required managers in an effective and timely
manner.

2.5 Information Systems in Apple Inc

The organisation structure of Apple with its global presence and different
domains in the electronics industry would require a system of information
dissemination which enables availability of right information to the right people and at
the right time, to ensure that the business decisions undertaken by them are
consistent and backed with appropriate availability of information.

Let us have a look at how Apple is managing their information system and the
technology that is used by the company to managing this mammoth task of
information management.

Apple’s main objective has always been to be the innovation leader. The
same philosophy extends even to the manner in which they manage their internal
communication which showcases their superiority. In accordance with this concept
they have most of the processes which are virtualised, as the company believes that
virtualisation is the factor which will provide the company with a competitive
advantage in the market place in future.

Apple’s intranet provides the required platform for undertaking this process
and this intranet in the company enables the employees to access all required
information from the comfort of their desktop. From an external linkage point of view
the company has an extranet which enables the company to interact with the key
suppliers and developers of Mac based applications. This enables the organisation
to build a seemingly unlimited ‘value chain’ in the information domain by creating a
virtual link between the suppliers and the production units which are in turn linked to
the retail stores. The information from the retail stores is communicated to the
customer service department which already has access to other information about
the supplier and the production details. Hence, there exists a vast amount of
information to enable the company to offer services at the ‘click of the mouse’ (in
terms of information availability, the seemingly end to end link up of all parties
involved in the value chain has enabled the company to offer customised services to
its customers).

The company has undertaken a tie-up with Utility Computing whereby they
are reducing the amount of computer assets that the company owns and offering
payment for the services undertaken this concept is gaining momentum and is called
as SaaS (Software as a Service). This has enabled the company to achieve the
differential with other competitors in the market place and made the overall
information management system leaner and effective.

3. CONCLUSION

From the above discussion it can be seen that the segment of MIS is highly
important and can provide a substantive advantage in the market place to the
company if administered effectively. At the same time if the same is not planned and
positioned effectively the company faces the risk of losing out on opportunities and at
times may incur serious losses due to decisions being taken without availability of
appropriate information to the managers. Hence, it can be stated that MIS plays a
crucial role in the overall strategic ‘fit’ of the company.

Bateson (1978) stated that MIS is a system which is “a difference that makes
a difference” which is a simple definition of MIS and at the same time powerful as it
is able to deliver the true meaning of MIS as a system.

Moving forward let us have a look at the different aspects that the company
can utilise to improve the efficiencies in the system. Some of the recommendations
are as appended below.

4. FUTURE RECOMMENDATIONS

4.1 Intellectual Property Management

The company is at the cutting edge of technology and hence it would have to
harness the intellectual property of the employees and provide a proper ‘fit’ for the
employees to undertake the different activities which would enable them to co-
operate in the development of the knowledge in the company.

The knowledge based information systems are going to gain prominence in

future and the company can harness the same by setting up virtual communities for
the suppliers and employees to interact and develop potent new technologies which
can be assessed by the management for future viability. This would fit well with the
organisation goal of being an innovative leader in the market place, as a collection of
ideas can be gathered which can be harnessed by the management for future
developments in this regard.

4.2 Information Security Management

The security of the networks is one of the other concerns that would require to
be addressed by the company. As the increase in the market cap of Apple and its
software has brought the company into the mainstream which was hitherto
dominated by Windows networks, this would invariably create a venue for hackers to
hack into the internal networks of the company for information or other ulterior
motives. Hence, the company should focus its efforts towards building robust and
firewall proof systems which would ensure that the company is able to withstand and
secure the information channels that it runs.

4.3 Corporate Social Responsibility and Information Systems

The issue of corporate social responsibility is gaining prominence, a sub

domain of that being the ethical concerns, in information systems management a lot
of data pertaining to customers, employees and suppliers is available to the
management. Hence, the issue of data protection and limitations towards usage of
data for various purposes need to be defined to ensure that the company is not
embroiled into any controversy pertaining to the issue of data protection.

4.4 People Management from the Prism of Information Systems

The company should be careful to differentiate between the organisational

knowledge and the individual’s attribute which has been clearly identified by Teece
(2000) as follows “the knowledge about organisational procedures, products,
customers, suppliers and competitors is trapped inside the minds of key-employees”.
For this reason organisations depend on employees behaviour to create and transfer
knowledge (Bock, et al., 2005). Hence the company would have to handle the issue
of Intellectual property in information system management carefully to avoid any
pitfalls or losing out to competition in this regard.

As and when the company undertakes the strategic move towards

reorganising their information management systems the company should focus to
avoid the endemic concept of falling for the standardisation approach as in the case
of SaaS which is being considered the company should adapt the system to suit its
business needs.

Standardisation of systems across the different platforms of support systems

is one of the considerations that the company can look into like the standard
platforms of SAP which is already in place in the company need to be looked into for
customisation to the different regions that the company operates in.

4.5 Flaws in the Present System

The flaw in the present system is the utilisation of the communication process
to bridge the gap between the different organisational structures which the company
follows. This can be addressed through the deployment of voice over networks along
with the present data capturing systems that are in place to avoid communication
gap in the system.

As the company is highly innovative they need to look at the process of

revolutionising the value chain and look at the option of making the information
availability in a mobile medium like the smart phones which would make it more
effective for the managers to view information and make decisions in an effective
and timely manner.

As a general practice the companies use consultants to formulate the

Information system process as they would have sufficient knowledge in the
technology. However, the company can derive benefit from the in house experts as
the company is involved in the knowledge management and technology industry to
achieve far greater efficiencies in the management of the system.

4.6 Feedback Mechanism

The company should incorporate the feedback mechanism which would

ensure that they are able to achieve the desired level of success any flaws which are
noticed can also be addressed by having this feedback mechanism, as an
accumulation of flaws if left unattended would have the potential to create a situation
or a contingency which could be avoided by following a feedback mechanism.

The information even though available should be validated before any

decision are arrived at, as the issue of regional bias, or departmental bias can creep
in due to the fact that the organisation is structured around those lines. Hence,
before undertaking any strategic decisions the company should consider these facts
and then put forward the decision process in motion.

4.7 Outsourcing versus Internalisation

The past aspect of outsourcing is being reversed and more and more
companies are reverting back to internalisation or pulling out of outsourcing. This is
because of the achievement of the required skills within the organisation or the
understanding gained through the deployment of the knowledge by outsourcers in
the company. Hence the company need to factor these issues before going ahead
with any acquisitions or mergers with this kind of companies.

The company has to continuously scan the different geographic environments

for any potential threats from the environment it may in terms of political instability,
environmental impact, etc., Hence the company should deploy a special set of tools
to capture this kind of information and the same can be configured to work with the
public relations or the corporate communications team under the corporate network
to ensure that the information is available speedily and to the right employee or
department who can undertake the decision making process with efficiency and
alacrity.
REFERENCES

Agarwal, R & Sambamurthy, V. (2009) Strategic Information Management, Challenges and

Strategies in Managing Information Systems, 4th edn, Routledge: Oxon

Bock, G.-W., Zmud, R.W., Kim, Y.G., Lee, J.N., (2005) Behavioural intention formation in
knowledge sharing: examing the roles of extrinsic motivators, social-psychological forces,
and organisational climate. MIS Quarterly, Vol. 29, no. 1, pp. 87

Bateson, G (1978) Steps to an Ecology of Mind, Ballantine, New York (p, 271)

BusinessWeek, (2004). Steve Jobs – “It feels good”, BusinessWeek, Vol. 2, February, 2004

Davidow, W. H., Malone, M. S. (1993). The Virtual Corporation. New York: Harper
Business

Hill, C.W. & Jones, G.R. (2004) Strategic Management - An Integrated Approach. 5 th edn.
Boston and New York: Houghton Mifflin Company

Hodgkinson, S.L. (1996), The role of Corporate IT function in the federal IT organisation. In:
Information Management, The organisational Dimension (Earl, M.J., ed). Oxford University
Press, Oxford.

Markoff, J., 1997, New York Times, The Apple World according to Markkula,
Available at: http://www.nytimes.com/1997/09/01/business/an-unknown-co-founder-leaves-
after-20-years-of-glory-and-turmoil.html?pagewanted=1
[Accessed on: 17-08-10]

Marshall, D. (2007) 3 Tera on the fit between virtualisation and utility computing,
TechWorld Available at: http://features.techworld.com/operating-systems/3842/3tera-
on-the-fit-between-virtualisation-and-utility-computing/
[Accessed on 17-08-10]

McCarthy, C., 2009, cnet news, Remembering the ‘1984’ Super Bowl Mac ad
Available at: http://news.cnet.com/8301-13577_3-10148380-36.html
[Accessed on 15-08-10]

Porter, M. (1990). Competitive Advantage of Nations. New York: Free Press.

Sauer, C. (1993) Why Information systems fail: A case study approach. McGraw Hill.
London

Teece, D.J., (2000) Strategies for managing knowledge assets: the role of firm
structure and industrial context. Long Range Planning, Vol. 33, no. 1, pp. 35-54.
Teubner, A. & Mocker, M. (2009), Strategic Information Management, Challenges and
Strategies in Managing Information Systems, 4th edn, Routledge: Oxon