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Economic impacts of leadership change
Economic impacts of leadership change
Apple is one of the current being names in provision of innovative and technologically driven products such as ipods, ipads, mac, itunes and iphones among others. The company was founded in 1976 and currently leads in the market with its iphones and other application stores. The success of apple is attributed to the sound leadership of the co founder and current CEO Steve Jobs.
Steve Jobs has remained as one of the iconic leaders at apple given his success in other businesses such as Pixar animation studios, which later merged with Walt Disney. Steve Jobs was born in February 1955 and has grown up to become a highly innovative leader and businessperson with his Apple brand making headlines in communication technology arena worldwide. His ability to leader a successful business venture has therefore come out clearly for all the time he has been the CEO of apple. He is therefore a transformational leader who uses his innovative skills to put apple to international standards (Hacker & Roberts,2003).
It is however worth noting that at the current age of 56 the man has been suffering from old age and illnesses that threatens the future of apple.Perenial illnesses therefore raises the prospects of death and hence this paper will try to analyze the economic impacts of such an occurrence on the company, its stocks, the demand and supply of apple products both locally and in the international markets. The paper also seeks to evaluate the impact of his death on the current and prospective investors of the company (Fortner & Facler,2011).
Discussion:
The situation at apple clearly shows how the type of leadership can greatly affect an organization. Steve Jobs is not only the CEO of the company but also a cofounder and hence he shares the vision and mission of the company. Apple inc.was established in the year 1976 with a commitment to creating personal experience in computing among the students, consumers, professionals and educators by providing innovative softwares,hardwares and internet capabilities to its clients across the world. From the above mission statement, apple was therefore geared towards becoming a global leader in personal computer offerings to a wide range of customers. The firm has been able to leave to this dream and despite being the youngest company in the market apple has been able to shake off competition to achieve a market share of 10% in the US market using its iphone.The shipment for its products also grew from 8.7 million to 18.7 million within the first quarter of 2011 making the company to boost its global market share from 2.8% to 5% and among the top 4 vendors. The table below shows the total statistics for shipments during the same period (Dalrympe, 2011).
The mobile phone vendors, shipments and market share during the first quarter of 2011.Obtained from HYPERLINK “http://www.loopinsight.com/2011/04/29/apples-iphone-market-share-grows-115-in-2011/” http://www.loopinsight.com/2011/04/29/apples-iphone-market-share-grows-115-in-2011/.
The above statistics therefore shows the commitment of the company towards the achievement of its mission, which is clearly owned and shared by the co founder, CEO.In fact Steve, must one of the people who formulated the mission, and hence he has a better understanding of the long future of the company. His long-term illness or death will therefore affect the achievement of the company mission and vision as the other leaders may not have the personal attachment to the mission and vision like Steve.
According to peter rock consulting inc., leadership continuity is a very important aspect of an organization. This is because the business environment has become so dynamic and hence there is need for leaders who can withstand the challenges.Organisations therefore require tested leaders who have a record of accomplishment of managing change in the organization. This is quite evident for Steve Jobs who has been at the company since its inception and clearly understands all aspects of the business from within and without. He has been therefore able to meet the expectations of key stakeholders such as customers, shareholders, suppliers and employees. Effective leadership continuity also requires that the leaders’ behavior is aligned to the company vision and mission and as such, Steve Jobs position has not been just that of CEO but a major stakeholder whose dream is anchored in the company mission and vision. His innovative abilities have been demonstrated by the company’s sudden rise in variety of brands (peter-rock.com).
The role played by the CEO is therefore enormous in the achievement of the long-term goals of the company as indicated in its mission and vision. This means that the change in leadership at apple would have negative impacts on the company and its stakeholders. This could change the fortunes of the company and its future prospects.
Economic impacts
The death of the CEO will therefore lead to a sharp decline in the performance of the company. Just like any other organization, a change in leadership may give rise to a change in strategy. This could however derive negative results for apple when it is doing very well in the local and international markets. The members of the organization especially the employees will take time to adapt to the new leadership and hence their individual performance will be affected. As mentioned earlier new leadership will come with changes but as usual, the employees could be resistant to the changes. This will affect negatively on the organization (Gilmore, 2003).
Consumers form an important component of the organization supply chain and as such, they will demand for continuity especially if the organization is able to satisfy their needs. The current CEO has been able to build his reputation with the quality services and products delivered to the consumers. He has been the face of the company during this successful period and hence the consumers have been able to build brand loyalty from the products. This could however be affected by the death of the CEO as consumers may anticipate a change in brand and good will that he has been able to build for the three decades with the company. The overall impact will therefore be the decline in the profitability of the company (Outward bound USA, 2007).
Impact on the stocks and current shareholders:
The high levels of performance shown by apple are clearly reflected in the performance of the stock at New York stock exchange and as such, the shares have been able to achieve growth in the prices as seen in the five-year trend below:
The stock performance trend for five years. Obtained from HYPERLINK “http://finance.yahoo.com/q/bc?s=AAPL&t=5y&l=on&z=l&q=l&c” http://finance.yahoo.com/q/bc?s=AAPL&t=5y&l=on&z=l&q=l&c=.
From the above graph, it is evident that apple shares have enjoyed long spells of growth and stability apart from the 2009 period where the company shares were affected by the global financial crisis. The shares currently trade at $364.92 with diluted earnings per share of 20.88 and a return on equity of 38.78%.The high level of performance of the stock is major boost for the shareholders as it creates value for their investment. It’s however worth noting that the performance of stock will largely depend on the performance of the company and other information available to the shareholders. The company realized a profit margin of 22% and operating margin of 29%, which were quite impressive for the company given the current economic challenges. The leadership of Steve Jobs guided the performance of the company and hence his death will most likely upset the performance of the company and such information will lead to decline in the price of apple shares in the market (yahoofinance.com).
Shareholders of the company have built their trust in Steve Jobs and believes that through his leadership, they are able to achieve high levels of growth in their investments. The death of the CEO will therefore affect their investment decisions, as they will suspect a possible decline the performance of the company, which will threaten the value of their investments. This will lead to cases of Punic sell of their shares while others will seek to look for other alternative investment options. The two effects will lead to decline in the performance of the company stock (Madura, 2008).
Impact on the demand and supply of the products:
The customers initiate the demand for apple products across the world and this comes because of customer satisfaction with the company products. This has been the key objective of the firm through the leadership of Steve. The supply side is brought about by the firm’s production and innovation activities. Steve Jobs is a leader and innovator technological solutions to the company clients. This has seen the company design different brands of iphones, ipads, itunes and macs.Customer driven innovations will create the supply of the right products in the market to match the demands of the customers. The death of Steve Jobs will definitely affect both the supply and demand side of the apple market. The supply side will be strained by the lack of leadership while the customer loyalty created by his reputation will reduce and hence there will be a decline in the demand for the products worldwide. Macintosh operating system, which has been the brainchild of Steve Jobs, will be greatly affected.
Impacts on market structures and international operations:
The iphone, which is one of the successful brands by apple, has dominated the market for quite long and this innovation clearly portrays the effort put by Steve in building the company. His death will however expose the brand to intense competition especially in the US as the competitors will anticipate a change strategy concerning the product. This will also open up the market for other competitors and this will upset the market share of the company. Although apple operates globally, it maintains a central strategic and product development and hence the international outlets only act as distribution channels. When the central operation is affected, the company will find it difficult to run an efficient supply chain in other countries like Indonesia. This will therefore lead to poor customer service and hence the firm may lose out to the competitors.
Conclusion:
Steve Jobs has lived the dream of apple inc. and all decisions he has bee making are geared towards achieving the company goals. The great success that the company has achieved is therefore attributed to Jobs who is not only a CEO but also a partner and owner of the company. He has therefore built a reputation and leadership that cannot be easily matched. For these reasons, his continued illness or death could affect the company.
References:
Dalrympe,J.(2011).” Apple’s iPhone market share grows 115% in
2011”Loopinsight.com.Retrieved July 18,2011. From
HYPERLINK “http://www.loopinsight.com/2011/04/29/apples-iphone-market-share-grows-115-in-” http://www.loopinsight.com/2011/04/29/apples-iphone-market-share-grows-115-in-
2011/.
Fortner,S.R & Facler,P.M.(2011). The Handbook of Global Communication and Media
Ethics.John Wiley and sons.
Gilmore,N.T.(2003). Making a leadership change : how organizations and leaders can
handle leadership transitions sucessfully. Lincoln : iUniverse.com.
Hacker,S.& Roberts,T.(2003). Transformational leadership: Creating organizations of
meaning. Milwaukee, Wis. : ASQ Quality Press.
Madura,J.(2008). Financial markets and institutions.8th ed. Mason Ohio : Thomson.
Outward bound USA.(2007). Leadership the Outward Bound way : becoming a better
leader in the workplace, in the wilderness, and in your community. Seattle : Mountaineers
Books.
Peter-rock.com(2011).Leadership Continuity”Peter-rock.com.Retrieved July
18.2011.From http://www.peter-rock.com/LeadershipContinuity.html.
Yahoo.finance.com (2011).”Apple inc.(AAPL).”Key statistics. Retrieved July
18, 2011.From HYPERLINK “http://finance.yahoo.com/q/ks?s=AAPL+Key+Statistics” http://finance.yahoo.com/q/ks?s=AAPL+Key+Statistics.
Analysis of “Disconnected Youth, New Media, and the Ethics Gap” (2)
Analysis of “Disconnected: Youth, New Media, and the Ethics Gap”
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Analysis of “Disconnected: Youth, New Media, and the Ethics Gap”
The book “Disconnected: Youth, New Media, and the Ethics Gap” by Carrie James focus on the involvement of the youths in the internet space and how they approach the social media. Technology advancement as a major process of devolution has made the world a media control sphere where people depend on the internet in carrying out their day to day life activities. It is right that the internet, as well as other media, has resulted to societal development where people interact positively, but it has also led to negative effects that are devastating to the adolescents’ growth. The young people are the most affected by the media as they have been brought up in the community where digital technology is the order of the day, thus seek a sense of belonging in these platforms. According to Carrie James, there are thinking gaps in the society which includes disconnects and blind spots which are instigated by different forms of thinking like moral, self-focused and ethical thinking. In her research, Carrie James involved a hundred and forty-three participants that had the age ranging between ten to twenty-five years. In this discussion, the analysis of “Disconnected: Youth, New Media, and the Ethics Gap” is done in an in-depth extent in consideration of the ethics in the new media as well as how the text amplifies the issues regarding the youth’s internet approach.
Throughout the book, Carrie James has depicted hoe the young people at the teenage as well as young adulthood perceives the media in the modern society. Carrie James has developed the chapters at a far-sighted way where she brings in various matters arising in the community regarding media, and she has ended with a topic that tells the adverse effects social media platforms as well as their advantages (James & Jenkins, 2014). Her primary focus when writing the book was illustrating how the young people think and react to the contradicting issues that daily arise when using the internet. In the book, she puts in point the concepts that are alarming regarding the internet use as well as the matters that are important to think about when it comes to the youths online conducts. According to her argument, there are some disconnections and blind sports the acts as a hindrance to the youths putting into consideration the ethical and moral limits in their online activities. Carrie James precisely elaborates steps that show where the gaps occur in the young people perceptions toward online services and also provides sound solutions in curbing the issue. The adults are considered as the vessels to apply these remedies to on the interest to mentor the young people towards more ethical online conducts.
In the first chapter of the book, Carrie James illustrates the three types of thinking which include ethical, self-focused and moral reflection. The self-focused reasoning involved the act of an individual getting at the main point of argument and the conclusion made are based on one’s assessment at the personal level. Moral thinking regards sympathetic rationale where the individuals cognitive allows one to put in consideration of how the close people which include friends, neighbors as well as the family are affected by an issue. On the other side, ethical thinking has the same bases as moral thinking, but in this instance, a wide range of the people who are a distance away and not specified are considered.
It is significantly seen in various forms such as community thinking, multiple viewpoints taking as well as responsibilities and roles thinking. The significant perceptions in understanding the online gap that exists in the society regarding the youth’s internet behaviors are disconnects and blind sports. Blind spots tend to occur when an individual depicts self-interest at the expense of others without his or her awareness which is led by the impacts of unintentional and insensible conducts. On the other hand, disconnects are contradictory to blind spots as they take place when an individual realizes either an ethical or moral scenario and significantly assumes it for a self-favoring choice. For instance, in the social media platform today people spread information as well as artwork which are unethical or biased in a way or the other for self-beneficiaries without the awareness of how they affect others in the society as well as the prejudice they instigate.
In chapter two, Carrie James talks about privacy as well as the issues related to it when it comes to the youth’s application of internet and social networking. Privacy issues are often experienced among the teenagers in the online platforms as they are the vast users of the social media sites as a way of socializing as well as sharing lots of materials and information with family and friends. According to Carrie James in her research, she approached privacy among the young people in three distinct ways where it considered in the individual’s hands, forsaken and social (Kim, 2015). Considering social privacy, the young people tend to trust the people they are connected with when it comes to the privacy issues. For instance, in the process of posting a picture or any other information, one thinks that it is right to share the post with the connected friends and they is a high expectation of them approving the position.
When it comes to privacy in your hand, the youths understand that the information is not a public thing and that the online social network does not have privacy. Instead, the individual will restrict the information and share it with specified people who are intended to get the post. In the third part regarding confidentiality forsaken, the youths are aware that in the online social platforms there is no privacy and at the end, the information will be saved at various servers and be shared among other people. They also know that there is a capability of the data being viewed by a third party such as the administrative authority. Carrie James argues that the adults who are there to guide and direct the youths on media issues are substantially focused on the private safety information, and they do not get to the moral and ethical limitations.
Furthermore, Carrie James focuses on the property matters where she puts in consideration authorship as well as ownership of the materials. When it comes to making use of the online resources, the youths tend to forget about the duplicate productions which they in many instances. Many of these duplicates might compose the wrong information which contradicts with the original one. The young people claim that it is appropriate to use the materials on the internet even if they are unethical justifying that they are produced for commercial purposes. Also, the youths are not considered about the issues regarding copyright which is an authorized and they do not know the consequences. In many instances, the young people make decisions for their benefits without considering the ethical and moral values that may influence the society (Haack, 2015).
The other widespread standpoint regarding the social internet platforms involves people’s participation in media activities such as negative dialog and destructive gaming behaviors. Many youths get into deleterious communication situations in the online platform which ends up affecting their speech even with their friends resulting in the degrading of the ethical values in the community. They are also involved in gaming which is self-focused where they might end up using ill language on to others who significantly feel neglected and end up regretting. Excellent examples include game scamming and the play excellent which at many scenarios depicts poor mind and it is related to adverse information and language. At the last chapter, Carrie James tries to come up with the practical solutions against the illustrated disconnects and blind spots when it comes to the youth’s use of online platforms. Where she concludes that the adults among which parents, teachers and other community members have the responsibility of guiding and educating the youths about privacy, privacy matters as well as thinking regarding the internet online socializing.
As discussed above, Carrie James has perfectly illustrated the ethics in the new media as well as efficiently amplifying the youth’s approach towards internet and issues arising from its usage. It is right that the internet has been used in a substantial advantageous way when it comes to commercialization and sharing of positive information among other things, but significant steps are supposed to be adhered to curb its effects to the young generation. Youths are all the time involved and exposed to the threats of social media in the name of socializing without putting in consideration their privacy and property matters. It is the role of the parents, teachers as well as other elderly members of the community to educate the young people on the use of internet and challenges accompanied by online media.
References
Haack, S. M. (2015). Disconnected: Youth, New Media, and the Ethics Gap. Ethics & Medicine, 31(2), 127.
James, C., & Jenkins, H. (2014). Disconnected: Youth, new media, and the ethics gap. MIT Press.
Kim, S. H. (2015). Carrie James: Disconnected: Youth, New Media, and the Ethics Gap.
Economic impact of Diversion of corn crops for production of ethanol
Economic impact of Diversion of corn crops for production of ethanol
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The effect of corn ethanol, or a personal drought, or other price related factors, on the cost of global goods is difficult to qualify. The change from ethanol to corn crop in America in the past decades has had a great effect on the food prices in America and around the world. There are numerous factors that have had impact on the global food prices though, and the nonlinear impacts on the prices of goods, and prices of gods affect each other, and this has made it quiet hard to determine the major and minor effects (Marshall, 2010). These price dependency and effects of one good’s price change on another has resulted too many theories and facts regarding the prices change in America. The reason being, some good have direct impact on prices of other and other indirect.
According to Glauber 2008, the rise in the food prices has been contributed by the high price in ethanol made from corn. The report produced by the US government indicated that the rise in food prices has occurred for more than eight consecutive months. The food prices have increased by about 5% and the value is expected to rise. The American Agricultural department estimated that food prices would reach 5.5% in 2008 and the estimate was accurate though were few units less. Glauber 2008 says that one of the stated reasons was that the corn price was selling above 8% per bushel. Corn is a stable ingredient in many foods from cola to cereals and the major gradient is animal feed (Glauber, 2008).
The rising corn price is encouraging the reduction of the amount of corn ethanol added to US gasoline. The increase in the corn prices has resulted to almost increase in every food in America and neighboring countries. About 333 million metric tons of corn was estimated to be produced in 2008. Suppose the 31% of the American crop is being used in making ethanol, this indicates that ethanol will use about 103 million metric tons of corn (Glauber, 2008). This further implies that about 13% of the ethanol produced worldwide is being consumed by the Americans. One is left wondering the extent to which the food prices would decrease suppose there was an increase in the supply of corn used for other purposes apart from ethanol production. One of the conditions that might result is the decrease as well as increase in other prices of goods.
The availability of substitutes of corn determines the elasticity of a product; if the consumer can get other products (availability of substitute) it means they can easily change their consumption from one product (corn) to the other especially if there is an increase in price of one commodity. Nicholson and Snyder assert that the degree of necessity of a product also determines the price elasticity of demand. If the product is a necessity then its price elasticity will be greater than that of products which are not necessary. Basic needs have high elasticity of demand compared to luxuries. To some consumers automobiles are not necessary and therefore they are not affected by the changes in the prices (Marshall, 2010).
The time period considered; in a very long period of time, price elasticity of demand tends to be higher. This is because the consumer gets time to adjust after gathering full information about products in the market. The nature of a change; if there is a permanent change in prices consumers will look for ways of changing their consumption bundles (Tucker, 2008). A temporary change will be assumed by many since some usually take a very long period of time to shift their consumption of one product to the other.
The diversion is playing a significant role in reducing corn supplies for food and feed. For example in 2008, the government estimated that 3.1 million bushels of U.S corn was to be sued to produce bio-fuels. That is an increase of about 50% over the 2.1 million bushels the previous year and close to twice the 1.6 million bushels of 2006 (Marshall, 2010). A change in demand can only be responded to quickly if the suppliers have enough stock of inventory or raw materials within his reach. This makes the price elasticity of supply to be elastic. If at all the supply doesn’t keep stocks within his premises (stores). It may take some period of time to produce and ensure that there are enough stocks are kept for future demand. The quantity of stock to be kept can depend on factors like availability of space and he storage cost. These factors in turn affect the price elasticity of supply.
An in increase in the price of corn crops will cause a more than proportionate increase in the quantity demanded. In the real sense, any increase in the price will lead to a fall in the revenue collected by the producer or the price setter. Consumer will immediately lower their demand of the product whose price has been increased. They will switch their consumption to other related products will can satisfy their utility. An example of such products includes bread. In such cases the quantity demanded of bread is relatively elastic. Price elasticity of demand is usually infinity (Mania, 2008).
Any increase in the price of a commodity will cause a less than proportionate increase in the quantity demanded of a product. For example, when the corn prices increase, and following the fact that it is closely tied to the oil prices, when the prices rise, it results to an increase in the demand for ethanol. Under such circumstances, consumers have no option of consuming a given product and therefore will not consider it prices (Marshall, 2010). An increase in price of a commodity will lead to an increase in revenue. An example of products or services which has perfect inelastic demand is in a scenario when the consumer is supplied with electricity as the only source of energy from one company.
Since the introduction of corn and enacting the ethanol mandate sometime back, the consumption of ethanol in America has tripled. Majority of the corn is used by the machines that take about a third. The enacting of the ethanol mandate is has resulted to the increase in the prices of ethanol by about 1.5% as indicated by Babcock. As noted by various economists, the consumption has increased due to the introduction and erection of the ethanol plant and the high production, suppressing other alternative products and so the increase in prices. The other factor fueling the increase in prices and the high amount in America is the fact that the government has thwarted it from entering international markets (McConnell, 2005). Furthermore, as noted by numerous scholars, the fact that about 8% of the American fuel comes from ethanol has altered the flow and ebb of the product market.
Considering other factors, not everybody is threatened by the increase in the corn prices due to its demand. Some economists have noted that from about 40% of the global food index, ethanol only constitutes about 3% (Glauber, 2008). There is also a high probability that the price of corn might rebound prior to the growing term ends in the drop. They further state that the high corn prices has very little to do with the increase in the food prices in America. According to Mania 2008, the high prices of corn has a very minimal impact on given food items, and that the food items like eggs and milk, have high prices and the prices are unrelated to ethanol or corn. They instead say that the high prices are connected to the fundamental demand or supply relationship throughout the world.
As some of the rise in prices is as a result of the farm-level price rise, there are other factors that have contributed to the high food prices in America other than the increase in the price of corn. One important factor that should be considered and counted responsible for the high food process is the effects of high prices fuel. The effects of higher prices of energy might be felt in many forms in marketing, packaging, transportation, energy and other related factors.
References
Mania, G. (2008). Principles of Microeconomics. Fifth Edition. Cengage Learning publishers, New York
Tucker, B. (2008). Microeconomics for Today. Sixth Edition; Revised. London. Cengage
Learning publishers.
McConnell, C. (2005). Economics: principles, problems, and policies. New York. McGraw
Hill/Irwin, U. S. A.
Glauber, M. (2008). Corn Production and Ethanol. Retrieved from
http://economicsofcontempt.blogspot.com/2008/05/corn-production-and-ethanol.html on
6th, May, 2011.