Mia Hill Media

CMGT: 544 Creating Organizational Identity – Meaning Through Messages Course | USC Communication Management Masters Program

By: Mia Hill

2020

While Apple remains the most profitable retailer globally, profiting $5,600 per square foot with 20,000 people coming through its doors per week, other tech companies have found it hard to generate a profit from their brick and mortar stores (Kawasaki, 2012; Hafner, 2007). A few months before Apple opened its first store, Gateway, a competitor, began closing some of its locations and eventually closed all stores by 2004 (Coget, 2011). Other competitors have tried to emulate Apple with no success (Hafner, 2007). Hoping to generate buzz around their brands, Samsung, Nokia, and Sony created brick and mortar stores. With a lack of customers entering their stores, they have been compared fatefully to mausoleums and aquariums (Hafner, 2007). Many have speculated the different reasons behind Apple’s success. Some equate its profitability to the magnetizing aura Steve Jobs brought to the brand, others to its disciple-like employees, or the mass amount of devoting Apple consumers (Hafner, 2007; Kawasaki, 2012; Segal, 2012). When, in fact, it is a culmination of all three statements. 

A study from 2010 found that managers with strong organization identification can influence organization identification upon employees who then influence a customer’s organization identification, which ultimately increases a company’s profit (Lichtenstein, Netemeyer, & Maxham, 2010). This effect is dubbed a downstream flow of influence. The theory is that customers will spend more when highly identified employees and managers influence them because they influence customers to become more identified with the brand (Lichtenstein et al., 2010). One can begin to understand how this translates to Apple’s success by first looking at its founder, Steve Jobs.  

Steve Jobs had such high organization identification that its market share decreased when he stepped out of his CEO position and then bounced back when he returned (Coget, 2011). According to the Lichtenstein study, managers and other authoritarian figures such as Jobs, who highly identify with a brand, influence employees to strongly identify with the brand (Lichtenstein et al., 2010). Jobs was the ultimate cheerleader for his brand and had intense control over Apple’s storefronts’ design and customer experience (Stewart, 2011). By committing to the brand image, Jobs was able to bring his store fronts to life through strong branding. The store fronts directly resembled the brand, which Stewart describes as “sleek, transparent, inviting, technologically advanced – and expensive” (Stewart, 2011). Therefore, one could assume that the same inquisitiveness consumers have for Apple products is the same inquisitiveness they have for the Apple stores themselves because Jobs was able to attract consumers to his storefronts in a similar way people that they were attracted to his products. 

This intense dedication to the brand also helps increase employees’ organization identification (Lichtenstein et al., 2010). For example, managers who increase their organization identification by 50% will increase an employee’s identification by 14.5% (Lichtenstein et al., 2010). For those lucky enough to get a job at Apple, organization identification begins at orientation (Segal, 2012). Past employees recall being applauded by managers when they first walked into orientation, signaling that they should be proud of being Apple employees. It was an achievement. Something so many people wanted, but only a certain few could enjoy it. At the end of orientation, employees have fully bought into the brand culture. They have become disciples for the brand, signaling increased organization identification (Segal, 2012).

Organization identification shows through the way they talk, act, and sell to customers. Employees are cool, energetic, here to help, and create an experience for customers, all characteristics of the Apple brand (Coget, 2011). The intention is never to sell but to enrich people’s lives (Segal, 2012). Studies have shown that when employees have high organization identification, they can increase a customer’s identification by 3.63% resulting in an average yearly spending increase of 2.69% (Lichtenstein et al., 2010). For instance, a dad walked into the Apple store with his two daughters looking to buy an iPad for himself (Kawasaki, 2012). The employee took it upon himself to show the young daughters how they could use the iPad to do things they would enjoy. In that moment, the daughter proclaimed, “I love this store”, gaining an instant Apple fan. The girl is not looking at the product as some high tech chunk of metal that she has no purpose for, but as the brand wants her to see it… as something she can use and will fit into her lifestyle (Kawasaki, 2012). Employees may also be able to increase customer identification because the customer experience is set up in a way for the employees and customers to interact more often (Hafner, 2007) For instance, employees aren’t there to sell, they’re there to help the needs of their customers and the Apple storefronts are specifically designed to help whatever needs customers may have. For example, if a customer needs to check out quickly, Apple employees are equipped with mobile devices to check them out instantly. If a customer needs help fixing a device, employee technicians are ready to fix their problems at the genius bar, and if you have no idea how to use Apple products, trainers are ready to assist you in either workshop settings or one-on-one training sessions (Hafner, 2007). Therefore, the increased amount of time that customers spend with employees because of the way Apple stores are set up, may impact organization identification in customers. 

Furthermore, when Apple previously shifted to more aggressive sales-based tactics, customer-satisfaction rates plummeted (Sherr & Lublin, 2013). As stated previously, enriching people’s lives has always been the motto of Apple and part of its emphasis on customer service (Segal, 2012; Kawasaki, 2012). Studies have shown that when customers identify with an organization, it has a positive impact on “word-of-mouth, favorable attitudes toward the company, company loyalty, and purchase intent and behavior” (Ahearne, Bhattacharya, & Gruen 2005; Bhattacharya & Sen, 2003; Lichtenstein, Drumwright, & Braig 2004). Therefore, when Apple shifted to sales based tactics, it created a disconnect between Apple and its customers, resulting in dissatisfaction with the company, ultimately hurting its sales (Sherr & Lublin, 2013). Apple shifted its focus back to customer service soon after (Sherr & Lublin, 2013).

Although Apple may have been able to course correct when it came to customer satisfaction changes, another Apple pitfall is that employee’s organization identification does not last very long. This decrease in organization identification is an issue for Apple because studies have shown that employees with high organization identification are committed to the brand for longer (Elsbach 1998). Employees at Apple have a retention rate of about two and a half years, while the company strives for six years of service (Segal, 2012). Past employees have explained how they are okay with taking a low paying job in the beginning because it is instilled in them that they are doing something for a greater purpose than a paycheck. However, the façade quickly wears off as employees experience increased work expectations and non-existent upward mobility (Segal, 2012). That greater sense of purpose, a big part of Apple’s organization identity that managers worked so hard to instill in their employees, is gone. The organization identity is not enough to keep employees around. Therefore, Apple may be profitable because of its strong organization identification between itself, its managers, employees, and customers. However, the company needs to work on creating a more sustainable effect for its employees.  

References

Ahearne, M., Bhattacharya, C., & Gruen, T. (2005). Antecedents and Consequences of Customer-Company Identification: Expanding the Role of Relationship Marketing. Journal of Applied Psychology, 90(3), 574–585. https://doi.org/10.1037/0021-9010.90.3.574

Bhattacharya, C., & Sen, S. (2018). Consumer–company identification: A framework for understanding consumers’ relationships with companies. Journal of Marketing, 67(2), 76–88. https://doi.org/10.1509/jmkg.67.2.76.18609 

Coget, J.-F. (2011). The Apple Store effect: Does organizational identification trickle down to customers? Academy of Management Perspectives, 25(1), 94-95.

Elsbach, Kimberly D. (1998), “The process of social identification: With what do we identify,” Identity in Organizations, Whetten David A. and Godfrey Paul C., eds. Thousand Oaks, CA: Sage Publications, 232–7. 

Hafner, K. (2007, December 27). Inside Apple Stores, a certain aura enchants the faithful. The New York Times. Retrieved from http://www.nytimes.com/2007/12/27/business/27apple.html

Kawasaki, G. (2012, April 09). 10 Things You Can Learn from the Apple Store. How to Change the World. Retrieved from https://guykawasaki.com/10-things-you-can-learn-from-the-apple- store/ 

Lichtenstein, D., Drumwright, M., & Braig, B. (2018). The effect of corporate social responsibility on customer donations to corporate-supported nonprofits. Journal of Marketing, 68(4), 16–32. https://doi.org/10.1509/jmkg.68.4.16.42726 

Lichtenstein, D., Netemeyer, R., & Maxham III, J. (2010). The relationships among manager-, employee-, and customer-company identification: Implications for retail store financial performance. Journal of Retailing, 86(1), 85–93. https://doi.org/10.1016/j.jretai.2010.01.001 

Segal, D. (2012, June 23). Apple’s retail army, long on loyalty but short on pay. The New York Times. Retrieved from http://www.nytimes.com/2012/06/24/business/apple-store-workers-loyal- but-short-on-pay.html 

Sherr, I. & Lublin, J.S. (2013, August 1). Apple Stores Glow Less Brightly. The Wall Street Journal. Retrieved from http://online.wsj.com/article/SB10001424127887324170004578638450204855848.html 

Stewart, J. B. (2011, October 15). A genius of the storefront, too. The New York Times. Retrieved from http://www.nytimes.com/2011/10/16/business/steve-jobs-a-genius-of-store-design-too.html