Apple's Restructuring and Economic Concepts

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Questions and Answers

What does the 'long run' refer to in economic terms?

A time frame where no changes can be made

A time frame when everything can be changed (correct)

A phase characterized by temporary measures

A short period requiring immediate solutions

What characterizes the 'short run' in economics?

Time for long-term strategic planning

The phase requiring lengthy adjustments

Unlimited ability to produce goods

A period where present conditions cannot change (correct)

What was one of the significant steps Apple took during its restructuring in 1985?

Increasing advertising budgets

Acquiring new companies for expansion

Launching new product lines

Laying off over 1,600 employees (correct)

Who was the chairman of the board of Apple during the restructuring in 1985?

Steve Jobs Signup and view all the answers

What was one outcome of Apple's 1985 restructuring?

The elimination of the Lisa computer Signup and view all the answers

Why did Apple’s corporate reorganization occur in 1985?

Due to a slowdown in personal computer sales Signup and view all the answers

What strategy was employed by Apple when reorganizing in 1985 regarding executive roles?

Bringing in experienced veterans from other companies Signup and view all the answers

What was the significant change in product divisions after Apple’s restructuring?

Elimination of separate divisions for Macintosh and Apple II Signup and view all the answers

What psychological effect does the statement 'That's a tomorrow problem' represent?

Delaying issues is effective Signup and view all the answers

What does corporate restructuring usually aim to achieve?

Cost reduction and improved management Signup and view all the answers

What can be said about the short run in economic terms?

It refers to a time when few changes can be made. Signup and view all the answers

What was one major outcome of the Apple restructuring in 1985?

Layoffs of more than 1,600 employees occurred. Signup and view all the answers

How did Apple approach the leadership within the company during its 1985 restructuring?

They brought in experienced veterans from other companies. Signup and view all the answers

What does a successful company aim for in the long run according to economic principles?

To expand its resources and production capabilities. Signup and view all the answers

What was a significant catalyst for Apple's reorganization in 1985?

Leadership disputes within the company. Signup and view all the answers

What defines 'the long run' in economic discussions?

A timeframe when all factors can be adjusted. Signup and view all the answers

What change was made to Apple’s product divisions in their 1985 restructuring?

They combined the Macintosh and Apple II divisions. Signup and view all the answers

In the context of the corporate restructuring, what could be seen as a reimagining of the present?

Implementing emergency measures to improve efficiency. Signup and view all the answers

What pressure led Apple to make substantial changes in 1985?

A slowdown in personal computer sales. Signup and view all the answers

What does the term ‘extraordinary measures’ suggest in the context of short-run capabilities?

Unusual or drastic actions taken to meet demands. Signup and view all the answers

What does the phrase 'the long run' suggest regarding a company's capabilities?

The company can adjust its operations and expand as needed. Signup and view all the answers

What primary impact did Apple's 1985 restructuring have on its executive team?

Brought in experienced leaders from other successful companies. Signup and view all the answers

What was one major operational adjustment Apple made during the restructuring in 1985?

They eliminated divisions and created new operational structures. Signup and view all the answers

How did Apple's decision-making in 1985 reflect the concept of economic short-run challenges?

The company faced immediate pressure to reorganize to improve performance. Signup and view all the answers

What signifies the need for a corporate restructuring, as illustrated by Apple’s situation?

Facing substantial internal and external pressures for change. Signup and view all the answers

Which choice reflects the primary goal of a corporate restructuring effort like Apple's in 1985?

To streamline operations and reduce costs. Signup and view all the answers

What distinguishes the short run from the long run in economic terms as applied to companies?

Short run involves adjustments within existing resources while long run allows for complete changes. Signup and view all the answers

In the context of Apple's 1985 restructuring, what did the term 'extraordinary measures' refer to?

Significant efforts to rapidly increase productivity. Signup and view all the answers

What action did Apple take regarding its existing product divisions during the restructuring process?

They integrated the divisions into a more simplified structure. Signup and view all the answers

What can be inferred about corporate restructurings based on the Apple example?

They typically happen under pressure and in reaction to existing issues. Signup and view all the answers

Study Notes

Short-Run vs. Long-Run

Short-Run: A period where changes are limited by existing constraints. Companies can't quickly adjust production.
Long-Run: A period where all factors can be adjusted. Companies can build new factories or implement significant changes.

Apple's Restructuring in 1985

Context: Apple faced a slowdown in PC sales and internal issues.
Key Changes:
- Removed Steve Jobs as General Manager of Macintosh.
- Merged product divisions (Macintosh & Apple II) into operations and sales/marketing divisions.
- Laid off over 1,600 employees.
Goal: To improve cost efficiency, management, and market focus.
Challenges: General industry slowdown and difficulty selling to businesses.

Steve Jobs and Apple's Culture

Steve Jobs was seen as a visionary product developer, but not as strong in operational management.
John Sculley, the newly appointed CEO, was meant to change Apple's culture. However, he was too focused on internal operations and didn't have the vision Jobs had.
The restructuring aimed to leverage Sculley's management skills while acknowledging Jobs's strengths in product development.

Short Run vs. Long Run

Economists define the "long run" as a time when all aspects of a business can be changed.
In the "short run", businesses are restricted to the existing structures and resources.
A company can build new factories in the long run but cannot in the short run.

Apple Restructuring in 1985

Apple Computer was facing challenges in 1985.
The company was losing sales due to the general slowdown in the personal computer market.
Apple also had internal problems including the elimination of the Lisa computer and some development efforts.
Apple laid off over 1,600 employees and closed factories for a week.
The company restructured its product divisions, merging the Macintosh and Apple II divisions into one.
The merger was aimed at streamlining marketing and sales efforts.
Steve Jobs was removed from his role as general manager of the Macintosh business and became the Chairman of the Board.
John Sculley, the president and CEO, made the decision to remove Jobs, who was seen as less experienced in operations.
The move was intended to introduce a more experienced leadership style.

The Restructuring of Apple Computer in 1985

Steve Jobs was removed from his position as general manager of the Macintosh business and became chairman of the board.
John Sculley, president and chief executive, took control of Apple.
The company was facing problems including a general slowdown in personal computer sales and internal issues.
Apple reorganized its operations to reduce costs and improve management by:
- Scaling back advertising
- Closing factories for a week
- Eliminating the Lisa computer and some development efforts
- Laying off over 1,600 people.
- Merging the two product divisions - Macintosh and Apple II - into an operations division and a sales and marketing division
The reorganization aimed to get rid of young, inexperienced executives (like Jobs) and bring in more experienced veterans.
Jobs acknowledged his strengths in product development and his weaknesses in operations.
The goal of bringing in Sculley was to change Apple's culture, as he was a subordinate working for Jobs, causing conflict.
Analysts supported the move, believing that the sales and marketing divisions should be combined because they targeted the same retail partners.
The tech industry was experiencing a slowdown, which was a major challenge for Apple.
Apple faced difficulties selling to companies as well.

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Description

Explore the critical changes at Apple in 1985, focusing on short-run versus long-run economic impacts. Understand how management decisions shaped the company's culture and operational efficiency during a challenging period. Analyze the key figures involved, including Steve Jobs and John Sculley.