“Although there will likely be endless speculation that the resignation of Steve Jobs will usher in the end of the golden era of Apple, I believe this is the best thing that could have happened to Apple at this point,” says Mike Mannor, assistant professor of management in the University of Notre Dame’s Mendoza College of Business.
“The reality is that Apple has had a huge cloud hanging overhead for the last few years due to the rampant speculation and uncertainty regarding Jobs’ health,” Mannor says. “For a company that has defined itself on the bleeding edge of one technological frontier after another, the compounding level of uncertainty from market forces and the executive suite had become an ever present burden on an otherwise stellar firm.”
Jobs’ health has been in the news since 2003, when he was diagnosed with pancreatic cancer. He began a leave of absence in January, and rumors of his impending departure have repeatedly rocked Apple’s share price over the last couple of years.
“Particularly in a market like the one we have seen this summer, the reality is that there is often more of a penalty for uncertainty than there is for bad news,” Mannor says. “People have become skittish, cable news has become speculative theatre, and the markets have responded with enormous volatility.”
Tim Cook, Apple’s chief operating officer, was promoted to CEO. Jobs will stay on as chairman.
“By transitioning to this new role, Jobs may very well be able to continue on in one of the most important capacities he has been embracing for the last few years – master evangelist, a spiritual technological leader of sorts, and the grand oracle of Apple,” Mannor says. “With the exception of a short term ‘period of mourning’ for the passing of a great leader, this should help to usher in a breath of fresh air for Apple in the form of executive stability. Tim Cook is a proven leader who is ready to lead Apple forward. Together with their fantastic recent performance, it appears that the sky is the limit for Apple.”
Mannor conducts research on organizational learning and executive leadership. In his work on top executives, his research focuses on the powerful role of executive leadership to both help and hurt organizations through strategic action.
In forthcoming research (accepted for publication in the Strategic Management Journal), Mannor argues that organizational reputations are subject to significant cognitive biases such that negative information is weighed more heavily in reputation evaluations than positive information. Further, he notes that reputations are inherently path-dependent, such that all new information is filtered through prior beliefs, meaning negative information from the past tends to hold you down. In the case of Apple, this supports his argument that the negative cues coming from Apple in the last few years regarding Steve Jobs’ health have put an undue strain on the firm.
Mannor says by “tearing off the band-aid” of these short-term leaves and announcing a long-term solution, Apple should begin to free itself from the cloud of biased evaluations that has been holding it back and “launch further into the stratosphere of all-time elite financial performance.”
In addition, Mannor has conducted research that shows that leaders with great confidence, such as Steve Jobs, are often more conservative with internal decision- making than they get credit for. This suggests the shift from Steve Jobs (the hugely confident leader) to Tim Cook (the more humble operation-focused leader) could be easier internally than people might believe. This confidence-focused work will be presented at the Strategic Management Society international research conference in Miami, Fla., this fall.
Media Advisory: Mannor’s comments may be used in whole or in part. He is available for interviews and can be reached at 574-631-3298 or mikemannor@nd.edu