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MNB3701 ASSIGNMENT 2 REPORT 1 (APPLE)
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Table of Contents
DISCLAIMER: .............................................................................................................1
Executive Summary ....................................................................................................3
Background of Apple South Africa ...........................................................................3
Literature search ..................................................................................................... 3
Search terms used: .............................................................................................. 4
Some of the sources consulted: ........................................................................... 4
Institution Based View ............................................................................................. 5
Formal institutions ................................................................................................... 5
Intellectual property ..............................................................................................5
Political System ....................................................................................................6
Economic systems ............................................................................................... 6
Implications ............................................................................................................. 7
Informal institutions ................................................................................................. 8
Culture ................................................................................................................. 8
Religion ................................................................................................................ 8
Social Structure ....................................................................................................8
Education ............................................................................................................. 9
Management implications ........................................................................................9
Conclusion ................................................................................................................ 10
Bibliography .............................................................................................................. 11
IMPORTANT NOTES TO CONSIDER ..................................................................... 13
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Executive Summary
Most countries have seen an increase in the number of multinational corporations
because of globalization. The need to increase business market share has driven
significant expansion. In terms of profitability, most MNEs established their entities in
countries with greater potential and less competition. Apple has been attempting to
increase its market share by establishing subsidiaries in various African countries.
South Africa is one of the countries where it has successfully established a firm in
recent years. Given South Africa's current economic situation, Apple's services and
resources are in high demand. It is fascinating to note that the government will use
all available means to address some of the institutions that may be impeding Apple's
performance for the company to regain confidence and continue to operate in the
country. The existence of Apple is critical to the survival of the country. As a result,
the company's interests will be protected in South Africa. This report highlights
various institutional challenges faced by Apple in South Africa, and how does the
institutional based view impacted management in their decision-making process
such as long-term strategic positioning, hedging against adverse shocks in formal
institutions among others.
Background of Apple South Africa
Apple’s history in South Africa stretches back to the Apple II computer, which was
brought into the country by Base 2 Ltd (Akanji, et al., 2020) . Apple’s recent history
here involves Core being the official distributor for non-iPhone products, the local
launch of the App Store, music, and movie purchases through iTunes, and the
recently launched Apple Music. Between the Apple II and Apple Music is a storied
history of the brand. It began in 1979 with the Apple II Europlus, was interrupted by
sanctions against the Apartheid regime in the mid–80s, and then survived after re-
entering South Africa through Apple’s long drought and turnaround in the 90s and
early 2000s. Brian Seligmann, the marketing manager for Apple Computer SA during
the company’s re-entry in the market post-democracy, provided much of the
information in relation to the transformation of Apple South Africa.
Literature search
This report is built on a foundation of vasty scholarly work ranging from academic
journals, research articles, textbooks as well as company reviews and integrated
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reports using google as the search engine. The literature upon which the report is
built is mainly accessed from online databases as well as the library. The author
engaged in systematic search and review of vast research works, primarily from
2000 to 2022, although due to need, some older documents were utilised. For
theoretical literature purposes, the researcher used general to specific approach of
literature search.
Search terms used:
- The historical path Apple has taken to become an MNE in South Africa.
- Motivation for Apple for expanding operations into Africa, success, and
failure of operating Apple in the African context.
- Success or failure of Apple operating in different locations internationally
(SA).
- The institutions-based view is that formal and informal institutions combine
to govern MNE’s Apple.
- Informal constraints will play a much larger role in reducing uncertainty
and provide constancy operating Apple.
- Informal institutions governing the behaviour of Apple.
- Economic integration in South Africa.
Some of the sources consulted:
Akanji, B. et al., 2020. The influence of organisational culture on leadership style in
higher education institutions. Personnel review, 49(3), pp. 709-732.
Bara, A. & Mudzingiri, C., 2016. Financial innovation and economic growth: evidence
from Zimbabwe. Investment management and financial innovations.
Brney, B. & Hesterly, W., 2005. Strategic Management and Competitive Advantage.
New Jersey: Pearson Education.
Makina, D., 2010. Historical perspectives on Zimbabwe Economic Performance: A
tale of five lost decades. Journal of developing societies, pp. 99-123.
Mohelska, H. & Sokolova, M., 2015. Organisational culture and leadership-Joint
Vessels?. Social and Behavioral Science 171, pp. 1011-1016.
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Srivastava, S., Singh, S. & Dhir, S., 2020. Culture and international business
research: A review and research agenda. International business review, pp. 101-124.
Wei, X., Mohsin, M. & Zhang, Q., 2022. Role of foreign direct investment and
economic growth in renewable energy development. Renewable energy, pp. 828-
837.
Institution Based View
The institution-based strategy approach emphasizes the dynamic interaction
between institutions and organizations and examines strategic decisions made
because of that interaction (Akanji, et al., 2020). In other words, institutions are much
more than a collection of circumstances. "Rather than determining what arrows a
firm has in its quiver while battling to conceive and implement strategy and achieve
competitive advantage, institutions directly define what arrows a firm has in its
quiver," (Abel & Le Roux, 2019:53).
Formal institutions
Seretis and Tsalik (2018) states that, formal institutions include the political, legal,
and economic systems, among others, that are established by the government to
regulate the behaviour of individuals (property rights, contracts, procedures, political
structure). Formal institutions are clear and specific norms in a nation (or society)
that are established by public authority and must be abided by all community
members XXXX. Formal institutions include regulations, policies, laws, property
rights protection, and political systems.
Intellectual property
Governments around the world make various efforts to promote innovation in a
variety of activities. According to Peng and Meyer (2019), countries have different
approaches to protecting innovation through intellectual rights protection, which is
consistent with the TRIPS. 53However, the extent to which this protection is
implemented and practiced varies by region. The protection of intellectual property is
inextricably linked to the country's judiciary. The South African judiciary, like that of
many other African countries, places less emphasis on the cost of infringement of
property rights (Niemann & Kotze, 2006) . Given the judicial system's laxity, it
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