Sunday, 24 June 2012

Apple Computer versus Apple Computer

1.0  Overview
Steve Job was born on 24 February 1955. He was co-founder of Apple Computers with Stephen Wozniak in 1976 when he was only 21. Interesting story about the founded of Apple Computer started in the Job’s family garage and funded by selling his Volkswagen bus and Wozniak sold his beloved scientific calculator. With the selling of first Apple 1 of $666.66, their first model earned them $774,000. Apple II sales made an incredible record of $139 million, 700% increased three years later. By 1980, Apple Computer became a publically traded company worth $1.2 billon on the very first day of trading [1]. This in where John Sculley of PepsiCo join Apple Computer as Apple’s President.
John Sculley was born on 6 April 1939 is an American businessmen. He was the vise-president of PepsiCo in 1970 to 1977 then as president in 1977 to 1983. He was named Pepsi’s youngest-ever president.  Sculley is best known at Pepsi for the Pepsi challenge, a campaign he started to compete against Coca Cola to gain market share by using the taste test [citation]. Ironically, he himself took the test and picked Coke instead of Pepsi. He became CEO of Apple Computer in 1983. Apple lured Sculley to apply his marketing skills to the personal computer market. This is where Jabs came up with his legendary pitch to seal the deal with Sculley:”Do you want to sell sugared water for the rest of your life? Or do you want to come with me and change the world? [3]

It was a great development for Apple but it becomes turmoil in Apple leadership starting late 1984 when Apple experiences a reduction in sales and profit.  It’s become worst when Jobs as a co-founder of Apple was force to leave the company. Jabs resigned and founded NeXT Inc at the same year. In an interview with Lubenow and Rogers in 25 September 1985 Jabs said: ”I was very happy in the early days of Macintosh. Really, up until very near the end. I don’t think that my role in life is to run big organizations and do incremental improvements. Well, you know, I think that John felt that after the reorganization, it was important for me not to be at Apple for him to accomplish what he wanted to accomplish. And, as you know, he issued that public statement that there was no role for me there then or in the future, or in the foreseeable future. And that was about as black-and-white as you need to make things. Probably a little more black-and white than it needed to be. And I, you know, I respect his right to make that decision” [6].

2.0  Steve Job as Co-founder of Apple Computer

As co-founder of Apple he held 11.3 percent block of the company stock. It makes him an extremely powerful member of the company. As an employee he is responsible for Apple’s Macintosh Division. As a person, Jabs described to be a charismatic and persuasive leader. Jabs famed for his ability to gives speeches and captive the audient attention. He is a gifted speaker that able to captivate his employees and audience with the ability of an evangelistic delivery [7]. His understanding and deep knowledge of technology, combine with an idealist visionary gift help him to develop his vision and then interpreters it to his employee.
As an idealist, Jabs saw that Macintosh Computer as the next generation personal computer. As a chairman he put major resources to the development of the Mac. He also gives special treatment for Mac employees that what makes them frequently resented by other division. However, several of the products from Apple suffered significant design flaws resulting in recall and consumer disappointment. The Lisa was introduced in 19 January 1983, for $9998, and had disastrous sales.  While the Macintosh shipped in January 1984 and sold well, it cannot compete with the IBM PC. In late 1983 IBM sells 1 million IBM PCs, and introduces the big flop IBM PC/Jr. IBM suddenly surpass Apple sales, and Apple had to compete with an IBM/PC dominated business world [8].
As the problems arise the power struggle between Jabs and Sculley had become obvious. They have several fights about the philosophy and the vision of the company. Some of the director question what Jabs do with the Macintosh division and wonder whether Jobs has lost his objectives. The Apple board of director instructed Sculley to contain Jobs and limit his ability to launch expensive venture into untested product. Scully recommended a major reorganization that included the assimilation of the Mac division by other division. Jabs power of controlling the company shrinkage. When the board approved the reorganization that left Jabs with little to do. As he lost his power in the Mac Division the directors had circumvented his authorities on the board.

3.0  John Sculley Power as President of Apple

John Sculley was hired by Steve Jabs to become a President of Apple because Jabs need a professional manager to run the company. As a company president, he is a highly experienced senior-level executive who generally reports to the chief executive officer and board of directors of a corporation or business. He is the person that has a broad range of fiscal and strategic responsibilities within the company [10]. According to Sculley in an interview with David Greelish, he said:” Steve and I were partners and I was brought in to Apple to help run the company, together with him. I had no computer background when I was brought to Apple. I was brought to Apple because they needed someone who had the management experience first to help solve the problem that Apple had introduced the Apple III in 1982, and it had failed. The Apple was near end-of-life, technically, Commodore outsold Apple almost two-to-one, Atari outsold Apple more than two-to-one, the IBM PC had been introduced in 1981 and was rapidly catching to up the Apple and was expected to pass it and clearly it was going to dominate business”[2]. Sculley was recruited to Apple because Steve Jabs believe that the Mac would be such a life-empowering tool for the mind that Apple needs to prepare to sell Mac in a million. He was so moved by Pepsi Generetion and Pepsi Challenge that he believe that Mac deserved to have a huge and world class campaign [9].
Steve Jabs as that time was the CEO of the company. CEOs work on the company's long-term strategies and strategic partnerships, while presidents deal with day-to-day operations and bottom-line performance. As the CEO, he should handle overall strategy while the president's responsibilities are more to managerial. As a president Sculley answer to CEOs. Presidents often hold the title of Chief Operating Officer, or COO. The COO is responsible for executing the policy of the CEO and board of directors. So, in short, it's a "vision thing" versus a "nuts and bolts thing."
According to Sculley in an interview he said that he was brought into the company to help Apple with his experience in marketing to make sure Apple is still commercially successful at least for three years to generate enough money and time so that Jabs can successfully launch the Macintosh. [9]. At that time he saw that Jabs was more focusing on Mac other than Apple itself. He said:”..even though Apple was a cult product in itself, much like Macintosh became, that Steve looked at the Apple group as the bozos, and he looked at the Macintosh as the elite talent team that was going to create the next great computer. And so, the Apple group was actually not even physically located on the Apple campus. They were off in an entirely different part of Silicon Valley in a building called the Triangle Building. So the first thing I did when I joined Apple was to move my office over to the Triangle Building and became the titular head of the Apple group. Because I wanted to give it some attention and then I used these two talented directors, Del Yocam who eventually moved from manufacturing to head up the Apple group as the operational head and Bill Campbell, a terrific sales and marketing executive, and between us we were able to re craft the strategy for the Apple”[2]
Sculley play a major role in Jabs resignation since the fall of Macintosh sales. The downfall came soon, however, when their largely overestimated expectations of the Macintosh sales could not be met. In their euphoria about the revolutionary Mac, they thought they would ship 80,000 units by the end of 1984, and had produced them in advance. However, the reality brought just 20,000 with a falling tendency, the crisis was evident. Reasons for that decline were that the Macintosh was not as "perfect" as expected - with its 128 KByte RAM (they were then mounted to 512 KB) it was not powerful enough, and there were hardly any software applications available yet[8]. Moreover, at the 1985 annual meeting, Jobs and Sculley neglected the fact that 70 percent of the company's sales were still due to the Apple II, whereas the Macintosh accounted for only 30 percent. Many sophisticated Apple II designers were annoyed and left the company. [3].
Steve Jobs became more and more angry and aggressive because of the continuing drop in Macintosh sales that merely 2,500 units in March 1985[5]. He blamed everyone for it, except for himself. Steve just did not see that the real problem.  In the end, he blamed even Sculley for the crisis and wanted to lead the company himself. But this seemed impossible since it was a public company and it has Board of Director [2]. When Sculley was informed that Jobs intended to remove him insidiously from the company, he was quite concerned, but then decided to choose the company's welfare over his friendship to its visionary co-founder. Supported by Markkula and the other members of the board, in May 1985, he dismissed Steve from his positions as the vice-president and as the leader of the Macintosh division; Jobs did not have any managerial power anymore [5].
In other words, it is not Sculley that force Jobs to resign but his autocratic thinking and the power of Board of Director.

4.0 Pitfall of Steve Jobs

Steve Job was known as the unconventional leader. In the ages of 27 he has own a multi billionaire company. His management style was not the stuff that people learn in university. He was a genius and high-maintenance co-worker who demands excellence from his colleagues. However, he was also known for blunt delivery of criticism [7]. Jobs sometimes described by other as being manipulative, dishonest and boorish. Being working with co-worker with average ages of 22 at the Mac Division, Jabs considered that they are the elite team. That makes the other division resentment with them [5].        
 As an autocratic person and yet aim for perfection, Jabs was alienating key company employees and member of board with his exclusive attention to the Mac. He was not willing to listen to advice about Mac’s problems. The Board of Directors wondered if jab had lost his objectives and questioned of his moves while he maneuvering the Macintosh division. While Sculley and Jab argue for the management philosophy and vision for the company, IBM suddenly surpassed Apple sales, and apple had to compete with an IBM/PC dominated business world. The next several product from Apple suffered significant design flaws resulting the recall and consumers disappointment. Scully believes Jobs was hurting Apple and executives begin to faze him out.
When Mac sales were catastrophic by the end of 1984, Jabs was defending some of weaknesses in Mac. At that time, there were a huge reduction in sales and profit. Mac that he claim the future was not as perfect as he think of. The sales were not very well by the first quarter of 1985. Jabs and Scully started to have major disagreements on the marketing strategies. Jabs wanted to lower the price and at the same time still wanted to run substantial advertisement. However, Sculley said that they can’t afford to lower the price on the Macintosh and still put advertising behind it. The issue was brought to the board of director and the majority favors to Sculley. The board asked Jabs to step down from the role of leader of the Macintosh division.
In the interview with Lubenow [6] jab said: “If my vote had counted for everything at Apple, I certainly would not have told Steve Jobs that was no place for him at Apple. But my vote was just one vote. So… “. He also added: “I think, more importantly, it was which philosophy and perspective, more than individual person. You know, my philosophy is – it’s always been very simple…I have certainly been accused of not listening to costumers enough. And I think there is probably a certain amount of that that’s valid. [6]
After his been removed to new office that he called Siberia he know that he had lost all his power in Apple. He became more depressed. As he appraised: “So I moved across the street, and make sure that all of the executive staff had my home phone number. I knew that john had it, and I called the rest of them personally and make sure they had it and them that I wanted to be useful in any way I could, and to please call me if I could help on anything…but none of them ever called back… there was nobody really there to miss me.”[6]
Then, he took an extremely step to resign on his own founded company, sold his entire share and started a new company called NeXT.


[1]  Bio True Story.2012. Steve Jobs Biography [online]
Available at: [Accessed on 10 April 2012]

[2]  Coursey,D. 2012. John Sculley Tells The Real Story of Steve Jobs' 'Firing'. [online]

[3]  Groeger,M. 2012. John Sculley and Steve Jobs. [online]
      Available at: [Accessed on 10 April 2012]

[4]  Kramer,D. 2010. Leadership Behaviors and Attitudes of Steve Jobs [online]

[5]  Kuehl,J & Martellaro,J. 2012. John Sculley: Steve Jobs Was Never Fired From       Apple.[online]

[6]  Lubenow,G.C & Roger,M.1985. Jobs Talks about His Rise and Fall [online]

[7] Mclnerney,S. 2012. Steve Jobs: An unconventional leader.[online]

[8]  Mesa ,A.F. 1998. Apple History Timeline.[online]
Available at: [Accessed on 10 April 2012]

[9]  Sculley,J. 2011. John Sculley on Steve Jobs. Apple's former CEO remembers a visionary whose innovation and taste changed the world [online]

[10] Sculley,J. 2008. Transformational Leadership:How Innovation, System Design,   and the Reinvention of Work are Changing the Game.[online]
Available at: [Accessed on 10 April 2012]

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