PLANNING AND CONTROL AT APPLE COMPUTER

Apple Computer, Inc., enjoyed phenomenal early success after it was founded in 1977 by Steve Wozniak, the technical expert, and Steve Jobs, the marketing genius. However, success did not last for very long, partly because of the introduction of the IBM Personal Computer. In the early 1980s, in the view of some observers, Apple needed tighter control and a more professional approach to managing. John Sculley was lured from the Pepsi-Cola Company to give Apple a new direction. To bring the company under control, sculey employed cost-cutting measures to improve its profitability. At the same time, however, research and development expenditures were increased so that the company could remain a technological leader in the field. However, later he was accused of spending enough on research and development and too much on advertising. The firm was also reorganized to reduce duplication of efforts, to lower the break-even point, and to reduce friction among the departments. To improve its effectiveness and efficiency, Apple introduced new reporting procedures. Furthermore, considerable efforts were made to control the inventory level, which is a serious problem in the personal computer industry. These measures, combined with a successful strategy (Apple's Macintosh computer is making inroads into business corporations that are limited by IBM) and helped by the popularity of desktop publishing, resulted in an increase of over 150 percent in earnings in the 1986 fiscal year.

Questions(05+05)=10

1. What is the relationship between planning and controlling?

2. What other types of plans can be used for controlling the organization?