International Journal of Management and Economics Fundamental
39
https://theusajournals.com/index.php/ijmef
VOLUME
Vol.05 Issue 04 2025
PAGE NO.
39-44
10.37547/ijmef/Volume05Issue04-06
Leadership Styles and Organizational Performance: A
Comparative Analysis of Apple and Microsoft
Murodjon Sagdiddinov
University of World Economy and Diplomacy, student, Tashkent, Uzbekistan
Received:
23 February 2025;
Accepted:
19 March 2025;
Published:
22 April 2025
Abstract:
In today's rapidly changing market conditions and technological advancements, effective leadership
style plays a vital role in ensuring the success and sustainability of a company. Thus, business owners must
understand which leadership style to adopt. This scientific article examines the impact of leadership styles on the
organizational performance of two major tech companies, Apple Inc. and Microsoft Corporation. Using
comparative analysis, this study compares these two companies based on the impact of their leadership styles on
4 key elements of organizational performance: market capitalization, stock performance, market shares, and
employee satisfaction. The research yielded mixed results: Apple outperformed in market capitalization and
market share while Microsoft excelled in stock performance and employee satisfaction. Therefore, it remains
unclear whether Apple's democratic leadership style is superior to Microsoft's transformative leadership style or
vice versa.
Keywords:
Apple Inc., Microsoft Corporation, leadership style, organizational performance, Satya Nadella, Tim
Cook.
Introduction:
In the dynamic of today’s corporate
world, leadership styles play a pivotal role in shaping
the trajectory of organizations. The effectiveness of
leadership styles employed by major players in the
global market directly influences organizational
performance. This scientific article examines and
performs a comparative analysis of the leadership
styles and their connection to the organizational
performances of two giant technology companies
–
Apple Inc. and Microsoft Corporation. As these
companies continue to dominate the global market,
understanding the nuances of their leadership styles is
imperative for business practitioners, scientists, and
politicians alike.
Leadership involves different approaches that
influence organizational dynamics differently. The
choices made by leaders vary throughout the
organizations, affecting their employee engagement,
innovation, and, finally, bottom lines. Apple Inc. and
Microsoft Corporation, which have dominated the
technology market for over 2 centuries, serve as
epitomes of success for other business owners.
Therefore,
meticulous
scrutiny,
comprehensive
analysis, and detailed comparison of the influence of
their leadership styles on organizational performance
provide essential insight for young start-ups and other
businesses on wise decision-making making which will
ultimately contribute to their success.
As these two leaders have vastly different approaches
to leadership, this scientific article provides a
comparative analysis to identify areas where their
philosophies differ and whose approach is superior. Do
Apple's innovation-driven leadership strategies yield
better results compared to Microsoft's focus on
adaptability and strategic partnerships? The answer
lies in comparing leadership philosophies and
organizational outcomes.
Therefore, the goal of this article is twofold: first, to
explore the leadership styles of Apple Inc. and
Microsoft Corporation; and second, to compare their
organizational performances to determine which
approach is superior.
Analysis of the previous works:
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International Journal of Management and Economics Fundamental (ISSN: 2771-2257)
The rivalry between Apple and Microsoft began in the
1980s when Microsoft allowed other computer
manufacturers to use its operating system. As a result,
Windows was installed and run on several different
devices. At the same time, Apple decided to
manufacture its unique hardware that would be
suitable to run only Apple’s operating system.
Following their establishment, these two major
corporations have been extensively studied and
compared to determine which one is superior. In the
series of studies carried out by Collins and Hansen, they
aimed to identify principles and strategies that set
successful companies apart. Over an extended period
of 11 years ranging from 1991 to 2002, the authors
compared paired companies, which included Apple and
Microsoft. In their analysis presented in the book
“Great by Choice” [1], they established that Microsoft
as a company fitted the category “great” by adoptin
g
the principles outlined by Great by Choice- which
included ambition, fanatic discipline, productive
paranoia, and empirical creativity -while Apple did not
align itself with these identified principles.
Later, James A. Sena and Eric Olsen carried out the
same research as Collins and Hansen did; however,
they concentrated on the period from 2002 to 2012. In
their paper called “Microsoft vs Apple: Which is Great
by Choice?” [2], they first examined the last 11 years
(1991 to 2001) to verify whether Microsoft
outperformed Apple. Indeed, a comparison of these
two companies to Standards vs. Poor’s 500 (S&P) [2]
revealed that Microsoft performed almost 13 times
better than the S&P 500 while Apple performed poorly.
Second, they compared their performance from 2002
to 2012, including their conformity to GBC principles,
employee salaries, annual returns, etc. They concluded
that Apple throughout the period of examination
consistently increased its conformity to GBC principles
while Microsoft ceased. Nevertheless, they were
unable to reach any decisive conclusion, due to the fact
that both Apple and Microsoft’s uses of GBC principles
varied during the period.
In the report titled "Revenue Comparison of Apple,
Google, Alphabet, and Microsoft from 2008 to
2022"[3], it was shown that Apple earned more
revenue than Microsoft in every year except 2008 and
2009. During these two years, Microsoft's revenue
exceeded Apple's by almost 23 and 16 billion dollars
respectively. However, after 2009, Apple's revenue was
consistently twice as much as Microsoft's. This trend
continued until 2022, with Apple earning $394.33
billion and Microsoft earning $198.27 billion.
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International Journal of Management and Economics Fundamental (ISSN: 2771-2257)
Main Part:
Apple:
Apple Inc. was founded in 1976 and since then has been
led by 7 different CEOs, including Mark Scott (1977 -
1981), Mike Markkula (1981 - 1983), John Sculley (1983
- 1993), Michael Spindler (1993 - 1996), Gil Amelio
(1996-1997), Steve Jobs (1997 - 2011), and Tim Cook
(2011 - present), whose leadership styles varied vastly.
Among these 7 chief executives, 2 had a very profound
impact not only on the company's financial success but
also on its culture and structure: namely, Steve Jobs
and Tim Cook. Steve Jobs’s leadership style was
numerously reported to be autocratic. According to the
EWOR Team’s article, “Steve Jobs was known for his
impatience, perfectionism, and high expectations as a
leader.” [4]. Here are some examples of the qualities
that placed Steve Jobs among autocratic leaders:
demanding, he expected a lot from his employees;
reluctant to delegate, he rarely assigned any job to his
employees that he thought he could do better; and
separated creatives from critics, he once said, “Gather
ten intelligent people in a room and you'll find a couple
who are creative, some who excel at problem-solving,
and a handful who are critical. Keep the creatives away
from the critics.”[5] However, this soon changed after
Tim Cook took charge of Apple Inc. Acknowledged as
one of the most influential leaders of 2022 by Times
Magazine [6], Tim Cook assumed a drastically different
approach compared to his predecessor Steve Jobs.
Under his leadership, the multinational company
transitioned from an autocratic leadership style to a
democratic one. Tim Cook is currently the CEO of Apple
Inc. The leadership style of Apple incorporates three
main elements. First, democracy is the key feature
where every strategic decision is made only after a
consensus is reached among all the senior managers.
Second, autonomy is given to the product development
department, as the CEO's participation in the product
development process is limited. Third, Tim Cook's
calmness is widely praised in handling business
matters. Due to his quiet way of dealing with things,
many regard him as a "quiet leader". [7] However, Tim
Cook is periodically criticized for his passive attitude
toward the introduction of new products and services.
Tim Cook during his management only managed to
launch a handful of products and services, including the
Apple Watch, iPad Mini, iPad Retina, and Apple TV
subscription services. Moreover, one of the defining
characteristics of its leadership style of Apple is its
reliance on strategic decision-making on technical
experts rather than on general managers. The logic
behind this is simple: Apple has to operate in an
industry where the life span of products is really short
and more technologies are introduced that are better
and more effective; therefore, Apple has a limited time
to react to such disruptions in the market and has to
predict which product is likely to succeed.
Apple’s democratic leadership style has a direct impact
on its various organizational performance elements:
1.
Financial performance: In 2011, when Tim
Cook first introduced his democratic leadership style,
Apple's market capitalization was around $377 billion.
Since then, it has experienced an average annual
growth of 23.26%, reaching a mind-blowing $3 trillion
at present. [8]
Additionally, under Tim Cook's leadership, Apple's
stock prices have thrived. The annual average growth
in stock prices since 2011 has been 102.8%. In 2011, the
stock price was $14.40, but now it is $192.53. [9]
During Tim Cook's tenure, stock prices became less
volatile, with a volatility rate of only 28%, compared to
a staggering 48% previously. [10] A stock with low
volatility is less risky and more attractive to investors.
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2.
Market share: Apple is one of the largest
technology companies in the world, offering a variety
of products such as smartphones, personal computers,
and software. Despite operating in multiple industries,
Apple has a significant competitive advantage in most
of them. In the third quarter of 2023, Apple claimed a
17.7% share of the global smartphone market. [11]
According to IDC, Apple PCs accounted for 10.6% of the
global PC market share in the same period. [12]
Additionally, as of December 2023, Apple macOS for
desktops and laptop computers had a global market
share of 21%. [13]
3.
Employee satisfaction: According to a review
conducted at Apple, 79% of the 1801 employees
surveyed reported having a positive experience
working at Apple Inc. Additionally, Tim Cook received a
79% positive rating out of 6729. However, the Manager
Team and Executive Team received lower scores, 71%,
and 73% respectively. As a result, their overall
Leadership Score was 74%, which places Apple Inc. in
the top 25% of companies with 10000+ employees. [14]
Microsoft:
Microsoft Corporation was founded in 1975 by Bill
Gates and Paul Allen. Unlike Apple Inc., it has only been
led by 3 chief executives: Bill Gates (1975
–
2000), Steve
Ballmer (2000
–
2014), and Satya Nadella (2014
–
current). During his control, Bill Gates exercised an
autocratic leadership style. In the same way as his
competitor Steve Jobs, he was extremely demanding of
his employees and very critical of their work. In the
book “Hard Drive and the Making of the Microsoft
Empire,” Gates was described as no
torious for sending
sarcastic emails: “Unlucky programmer received an
email at 2.00 that began ‘This is the stupidest code ever
written.’” [15] Steve Ballmer, however, took a very
different approach. He was regularly described as an
inspiring and motivating leader. Key aspects of his
leadership style involved being passionate, effective
communication, encouraging collaboration, adapting
to change, and leading by example. Yet his tenure as
Microsoft CEO had its downfalls and successes.
Although he is praised for his enthusiasm and passion,
he was highly criticized for his lack of vision. The most
significant example would be his inability to recognize
the importance of mobile technology, thereby losing
most of the market share to Apple and Google. Satya
Nadella who represents the current leadership of
Microsoft
Corporation
has
been
exercising
transformational leadership since 2014. Satya Nadella’s
transformational leadership integrates the following
qualities: empathy, he believes that a leader should
deeply understand his employees, customers, and
partners; innovation and adaptation, he embraces
technological advancements and adopts them to stay
ahead of the industry; a growth mindset, any challenge
or drawback is an opportunity to learn for him;
effective communication, he possesses an incredible
ability to convey complex’s ideas clearly; and social
responsibility, he is involved in sustainability efforts as
he believes in the importance giving back to
society.[16]
Microsoft’s transformational leadership has
a profound
impact on its elements of organizational performance:
1.
Financial Performance: When Satya Nadella
took over as the CEO of Microsoft Corporation, the
company's market capitalization was $381.72 billion.
However,
as
of
December
2023,
Microsoft
Corporation's market cap has grown significantly to
$2.789 trillion with an average annual growth rate of
27.4%. This has made Microsoft the world's second
most valuable company by market cap. [17]
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International Journal of Management and Economics Fundamental (ISSN: 2771-2257)
The annual stock price growth of Microsoft is
significantly higher than that of any other company,
having closed at $36.35 on Nadella's first day at the job
and now standing at $375, which is an increase of
almost 1031%. [18] This translates to an annual stock
price growth of nearly 108%. Satya Nadella's tenure has
also witnessed a significant decrease in the stock
volatility of Microsoft Corporation, which now stands
at 22.48% as of December 2023. [19]
2.
Market share: Microsoft Corporation holds a
significant market share in several industries, such as
software, personal computers, and smartphones.
Although Microsoft ventured into the smartphone
market, it was not successful, and as a result, its market
capitalization is comparatively low. Similarly, despite
selling products in the personal computer market, they
were not as popular with the general public. However,
Microsoft's Windows operating system has the highest
global market share for computers and laptops, with a
whopping 69% usage rate. [13]
3.
Employee Satisfaction: According to a recent
survey conducted at Microsoft, out of 1,971
employees, 82% reported having a positive experience
at the company. The survey also included ratings for
the leadership team, with CEO Satya Nadella receiving
83% positive feedback out of 11827 ratings. However,
the Manager and Executive teams did not perform as
well, with only 75% and 77% positive feedback,
respectively. Overall, the entire leadership team
received a 77% positive rating, which places the
company among the top 15% of companies with
10000+ employees. [20]
Comparative analysis
A comparative analysis was conducted on Apple Inc.
and Microsoft Corporation, which yielded the following
results:
•
Market cap: The leadership style of Tim Cook
has proven to be more successful in terms of market
capitalization when compared to that of Satya Nadella.
When they both took over as CEOs, their companies
had a market cap of around $380 billion. However, Tim
Cook was able to increase the market cap of his
company to $3 trillion, while Satya Nadella's company
reached $2.789 trillion.
•
Stock prices: According to the research,
Microsoft's stock price is almost twice as high as
Apple's, with $375 compared to $192.53. Additionally,
Microsoft has a 6% higher annual average stock growth
than Apple. Lastly, Microsoft has lower stock volatility
than Apple. Therefore, it can be concluded that Satya
Nadella's leadership style has been more successful in
terms of the company's stocks.
•
Market shares: Both companies compete in
three markets: smartphones, PCs, and software. Apple
has the upper hand in most of these markets except for
software, where Microsoft outperforms it by 48%.
However, the comparison of market share is difficult as
Microsoft specializes mostly in software development
rather than in other products. Although Microsoft has
a minor market share in other markets where Apple
exists, Apple is a key player in the other two markets
and holds a competitive advantage in the software
market, making it the winner in this category.
•
Employee satisfaction: According to surveys
conducted among employees of Apple and Microsoft,
the majority of workers reported having a positive
experience at their respective companies. Specifically,
79% of Apple employees and 82% of Microsoft
employees reported having a pleasurable experience.
In another survey, employees were asked to rate the
leadership teams of both companies. Results showed
that Satya Nadella, CEO of Microsoft, received 83%
positive feedback, while Tim Cook, CEO of Apple,
received 79%. These surveys indicate that Microsoft's
leadership style is more effective in terms of employee
satisfaction when compared to Apple's.
In general, there is no definitive proof that one type of
leadership style - either Apple's democratic leadership
or Microsoft's transformative leadership - is superior to
the other. Depending on the specific category, both
companies have achieved more success. Apple has
performed better in market cap and market share,
while Microsoft has excelled in employee satisfaction
and stock prices.
CONCLUSION
In the comparative analysis of Microsoft and Apple, we
delved into the relationship between leadership styles
and their impact on organizational performance.
Examining the leadership histories of both companies
with a specific focus on Tim Cook’s democratic
leadership style
and Satya Nadella’s transformative
leadership style allowed us to identify their influences
on the key elements of organizational performance.
On the one hand, under Tim Cook’s democratic style,
Apple showcased remarkable successes in market
capitalization and market share. The company
experienced substantial growth, reaching a market cap
of $3 trillion in 2023. Additionally, Apple’s competitive
presence in many global industries, such as software,
smartphones, and PCs, shows the reliability of its
leadership style.
On the other hand, Microsoft excelled in the other two
categories, namely stock prices and employee
satisfaction. Satya Nadella’s style with a heavy
emphasis on the future contributed to the consistent
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International Journal of Management and Economics Fundamental (ISSN: 2771-2257)
yearly growth of stock prices and the decrease in their
volatility. Moreover, high ratings regarding the positive
experiences of employees received by Microsoft
company indicate that a more harmonious work
environment
is
formed
under
transformative
leadership.
Despite the relative strengths observed in each
company, no definitive conclusion can be reached on
the superiority of one leadership style over the other.
The efficiency of leadership style depends on the
context: while Apple thrived under a democratic
leadership style, Microsoft flourished with a
transformative one. The elusiveness of a clear winner
in this analysis showcases the complexity of the
influence of leadership styles on organizational
performance. Therefore, the choice between
transformative and democratic leadership approaches
depends on the policy, culture, and goals that the
company incorporates.
As the technology sector continues to evolve, the
efficacy of leadership styles will rely more on soft skills,
such as adaptability, flexibility, and resilience, rather
than hard skills which were the primary focus of the
article. This highlights the need for further research to
establish a connection between leadership styles and
organizational performance in the constantly changing
realm of technology.
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