Apple Battery Crisis
Crisis in the organization of the people’s life sometimes is inevitable; however, their crisis management plan comes in handy when a crisis occurs. Organizations need to prepare themselves well with some kind of plan activities that can help in making a situation less damaging. The fact that crisis is inevitable should be the driving force to various organizations managers to ensure they are a well-thought strategy to dealing with an eventuality that could lead to damage on both the reputation and the organization standing. Communication, leadership, and prevention are a crucial element for crisis management plant. Crisis by themselves might not have great harm to the organization; however, how that is handled could either make better or worsen the situation.
Brands and reputation are built over a period; most consumer’s loyalty and trust are based on the reputation and brand. Apple is one of the most innovative companies in the technology world. The company’s brand has spread throughout the worlds due to the massive investment in advertisement and innovation (Anthonissen, 2008). This point out to the fact that building a brand is an expensive venture. Organizations should not just stop at building brands but maintain and protecting the same. This includes having a clear plan of responding to a critical incident to control the impact of the organization market share and share price. A quick response to the crisis requires the organization to take a transparent and compassionate approach then engage in robust crisis management to lessen the recovery time.
The Apple Battery crisis was fuelled by lack of pre-incident review. As a result, the company was not able to predict the lingering crisis. One of the plans to ensure organization overcomes such a crisis is to carry out pre-incident reviews to determine risks that the company face to limit the damage. This should be followed up by putting in place the necessary crisis management plan before incidence arises, a complete step of assuring a stakeholder and clients of swift and appropriate response.
Apple Inc is a leading multinational technology company based in the US. The company has been a leader in designing, developing and selling consumer electronics, computer service and engaging in online services. Apple Company has been regarded as one of the big technology companies together with Google, Amazon, and Facebook. This description points out the critical role the company plays in fulfilling the technological needs of individuals worldwide. Being among the big four technological company means the company has a vast customer base worldwide. Being in such position calls for the company an effective crisis management strategy.
Towards the end of 2017, Apple faced a public relation crisis after it had emerged that it had been regulating the presentation of older iPhone though updates as it sought to maximize the battery life. The bone of contentious was the fact that the company was doing what it did without their client’s consent. Majority of complainants cited the fact that the company was acting in an insincere manner (Anthonissen, 2008). Most resorted to tech blogs to post on the issues, while other consumer took to social media to share their own thought on the matter. It was after pressure from the clients that Apple finally admitted that it was indeed responsible for the software throttling conspiracy. The admission by the company resulted in customer filing lawsuits against the company.
Technology revolution can also be identified as a significant factor in fueling the effect of the crisis in the management. The company underestimated the power of social media, which was indeed a significant threat to the organization. This was because the public was able to binge much faster and to a broader audience. Social media enable the public to voice their sentiments and spread their experience faster.
The first mistake by the company was degrading their products. It made it worse by the late response to the client’s queries. While there was a massive complaint from the clients, Apple Company took long to respond. It was only after John Poole, founder of Geekbench, issued a blog post about the issue on December 18 that the company responded. Communication has been identified as the key to crisis management. Failure to communicate effectively tends to fuel the damage. There is little doubt that the situation would not be worse if the company communicated promptly (Smulders & Collins, 2002). Apple is a global company; there was nothing like economic crisis due to rapid growth in internet and social media. There was, therefore, need for the company to prepare to address the crisis in its market that could have covered all borders. This would have a single method to social media will not work. Media, customs and cultures vary in dissimilar markets. What works in one, may strengthen the problem in another.
The company failed to prepare for different crisis and planning on how best they could have communicated during the crisis. According to Anthonissen (2008), failure to communicate promptly tends to lead to more damages to the business; it then becomes expensive to repair the damage that it could have been to prevent. Lack of adequate internal and external communication leads to a breakdown in operational response, leads to confusion on the part of stakeholders who might react negatively.
Because of the company late response, the company was apparent as inept and illegal lax. The company extended the length of time it needed to bring full determination to the issues. During the extended period, the company will miss on its mandate to manage the crisis. The impact of the crisis on the financial and the reputation of the company was severe.
Thus, it is clear the company has done very well in marketing its products worldwide. Prior to the crisis, the company has used all available technological avenues to advertise and popularize its presence in the market. However, after the crisis, the company failed on its mandate to ensure it responds to the crisis in a timely manner. The primary failure has been found to be a lack of communication to its customer base (Smulders, & Collins 2002). The company ought to have used the same avenues it gas used to market itself to communicate with both stakeholders and clients to address fears and anxiety that had been created by the crisis. The company acted failed on integrity, even when it made communication, it failed to address that actual problem and seems to shift blames. It admitted the situation but failed to take responsibility for the satisfaction of the clients.
It is clear that Apple is a global company that has heavily invested in being where it is today. Risk modeling could have been in handy to help the company averts the battery Crisis, or help it overcome the crisis without much damage to its reputation. The following is the risk modeling/assessment that will help in analyzing the Apple Battery Crisis.
This critical step can help an organization identify risks that could affect it. A possible outcome of this step is to help an organization mitigate against the risks, prepare for eventualities and arrive at the right decisions. Risk management is essential as it helps an organization to prevent, control, financial, political and cultural ramification associated with risk eminent to harm the organization. The company decided to throttle its products was a wrong move arrived at due to a weak and uninformed decision.
Risk can be defined as either internal or external factor-based risk, which tends to affect the objective of the entire organization. These factors affect the company’ objective by creating a negative reputation of the company, which affects the profits hence organization-making losses. The factors can further be classified as economic issues, technical regulations, political influences which have a significant toll on the profit making of the company.
One factor leads to the other. For example, the apple battery crisis was an internal factor. The decision was arrived at from the management. While the internal factors did not have much impact, the external factors, which were perpetrated, by the clients and bloggers bearded the most significant burden. The company “Power Management” features were introduced in 2016. This analyzes the decision to be an internal factor. The company believed that they had excellent reasons why they did so. The feature made older batteries to cause iPhones to randomly shut down and restart when the phones were running at the peak performance. It is also clear that the company arrived at this decision in secret, making it on behalf of the customers without telling them. The decision arrived with official word from Apple that this “feature” even existed. As a result, the company kept the secret to its customer giving them every reason not to trust the organization (Rable, 1991). They had no choice or said in a matter that concerned them. The company needed to perform a risk analysis, which will have informed them about how their decision was potential risks and the effect it had on the business. The apple ought to have made the right choices from the beginning. They should have given the client option in the settings. Clients have the right to decide whether they want to slow down their phones or not. The company should also have come up with an app to notify the client when the battery is low, and the setting needs to be enabled. Having the above in place, customers would have some control over the battery level (Rable, 1991). Which would have given them the power to whether to upgrade to a new iPhone; at least it would be a more informed purchase.
Crisis tends to have some economic impact on the organization or to individuals. The company failed to estimate the cost of their decision. Apples were fined AUS$9 million for misleading their consumer in Australia regarding rights to get faults iPhone and iPad devices repaired. The ultimate goal of any business is to make profits, and every avenue that might prevent the company from making profits ought to have been dealt with. The Australian Competition and Consumer Commission (ACCC) made the right move against Apple and on Tuesday reported that the Federal Court requested the organization to pay the fine.
An ACCC examination found that Apple told 275 individuals that they were not qualified for a have their gadgets fixed or discounted in the event those they had recently been overhauled by an outsider. In particular, the iPhones and iPads of those influenced were showing a “Blunder 53” cautioning, which is apparently activated by free fix shops supplanting the connector that keeps running from the Touch ID sensor in an iPhone’s home catch. It is the responsibility of the management to ensure they fully understand what their decision would cost to the company. The damage is more extensive on its reputation, which leads to a decline in the profit. The cost associated with lawsuits, fines, and the refund was another major fail on the company side. Estimation is a vital risk modeling that could have not only predict the exact cost of the damage but help the company make the right decision. They should have predicted the numerous court wars and the refunds to their clients.
Mapping the Risk
An internal factor perspective can perceive the Apple battery crisis. The decision to throttle the battery was arrived by the management on behalf of the company. The internal factors significantly affected the company’ objective by creating a negative reputation of the company, which affects the profits hence organization-making losses. The factors can further be classified as economic issues, technical regulations, political influences, which has a significant toll on the profit making of the company.
Internal factors led to unsatisfactory products, which led to the outcry of the clients. This is to mean that internal factors combined with external factors to create the crisis. The internal factor was perpetrated by the management, involving the technical team of the company. Clients and bloggers mainly perpetrated external factors. It is the external factor that made the company to rethink their decision and offers public admission of their mistake. The company managed the crisis partially, they confirmed the speculation, but the damage had by this time been done. Apple obtainable abridged prices on batteries and became more transparent on their product’s battery life through software updates. However, the company failed to Apple make up for the damage that had been caused by a lack of transparency resulting in the crisis. The crisis had the potential to have a significant crisis were it not of strong brand loyalty it has managed to create.
Samsung had a similar crisis in 2016; reports surfaced in 2016 regarding the complications associated with Samsung’s product they had just released, the Galaxy Note 7, Samsung Corporation faced a significant threat to its reputation. The company resorted to image restoration strategies that included corrective action, mortification, and minimization. Samsung is also accused of failing to act swiftly and employing the right strategy. Samsung just like Apple failed in implementing effective crisis communication; there was a lack of accuracy, consistency and quick response (Valsamakis, Vivian, & Du, 2002). In both cases, Samsung Crisis and Apple battery crisis, the early response from the implicated organization would have been imperative, the organization might have failed to communicate “new” information, and lack of adequate response denied them control of the crisis.
Anthonissen, P. F. (2008). Crisis communication: Practical PR strategies for reputation management and company survival. London: Kogan Page
Rable, G. C. (1991). Civil wars: Women and the crisis of Southern nationalism. Urbana: University of Illinois Press.
Smulders, F. J. M., & Collins, J. D. (2002). Food safety assurance and veterinary public health. Wageningen: Wageningen Academic Publishers.
Valsamakis, A. C., Vivian, R. W., & Du, T. G. S. (2002). Risk management: Strategy, theory, and practice. London: RIRG.