Economic impacts of leadership change

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).


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 “”

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 (

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 “”

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 (

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.


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.


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