In January 2011, Steve Jobs announced that he would be going on medical leave to focus on his health, this raised concerns about the future leadership of Apple. This is because Steve Jobs was the founder of the company and was credited with the company’s innovation culture that led to its competitive success. During this time, the succession plan of the company remained a secret; several advantages are seen by employing this type of approach.
Secrecy in succession planning does not have negative impacts on the business giving competitors an unfair advantage. This was seen in 2009 when Apple’s stock took a $13 billion plunge the same day Steve Jobs announced that he would be taking medical leave (Rothaermel and Horbaczewski). Another negative impact that transparency could have on a company is that the successors often tend to be poached by rival companies.
Secrecy in succession plans also gives leaders the room and capability to change their minds without any consequences. This is because organizations require flexibility to meet any organizational change in strategy or operation. Such changes may bring about different requirements for the top jobs, prompting the immediate change of would-be successors.
The last advantage is that the approach does not demoralize any employees and makes everyone with the aspirations of being the successor work hard. In an organization, the employees who do not make the list of the top employees tend to feel disenfranchised and view the ones who made the list as favored (Grensing-Pophal). This will have negative effects on their work as they will not see the need to work hard since in their opinion the company does not value them.
Although Apple’s secrecy in its succession plan had many some benefits to the company, the board of the company breached its fiduciary responsibility to the shareholders. This is because the organization is a public company owned by shareholders, and they had the right to know who would be taking over Steve Job’s role in the company. This would have given shareholders the ability to access whether there would be any adverse effects due to leadership changes.
Works cited
Grensing-Pophal, Lin. “The Secrecy of Succession Planning.” Human Resource Executive (10 July 2012): n.pag. Web. 2 Feb. 2016.
Rothaermel, Frank. T, and Alicia Horbaczewski. Strategy in Action. N.p.: McGrawHill Education, n.d. Print.
