Apple Falls Into the Either/Or Conundrum

Rumors about health, surgery, and cancer recurrence aside, Steve Jobs looks to be ailing.  Even the analysts, whose acute powers of observation found them missing most of the dot-com bust as well as the subprime air, raised the question during a recent conference call.  Apple’s position is that health is a private matter.  Analysts’ position is that if Jobs leaves then Apple’s stock drops 25%.  The SEC’s position is that companies must disclose material information.  And so we swirl.  “None of your business,” is not the stuff that puts rumors to rest.  Maybe a firm, “You can’t handle the truth,” would be less controversial.  Or maybe Apple needs to escape the either/or conundrum. The either/or conundrum arises when we have two good values in conflicts.  Here, one value is telling the truth about the health of a CEO.  Another good value is preserving shareholder value.  Apple assumes that by keeping mum about the health issue that it can walk a fine line and honor both conflicting values.  But “mumness” can be deceptive.  And Apple has been blinded by assumptions as well as by its failure to think along the lines of succession planning.  If all Apple now has is tied directly to Jobs, the company has not done its work in terms of creating a culture founded on the Jobs’ principles.  Jobs’ departure, for whatever reason, will be a death knell if all Apple has is Jobs.  Perhaps, though, Apple could use a little self-confidence.  Perhaps it could also begin communicating that part of the story to shareholders and the market , to wit — We really can sally forth without Jobs.  Maybe Jobs could even lend his voice to acknowledge that Apple can and will go on, post-Jobs. 

Rather than mucking about in the “health is a private matter and not material” arguments about its close-to-the-vest approach, Apple might try the release of information that is not private but is material.  That information would be that the company has a succession plan in place, that its culture is strong, and that it will go on to preserve the Jobs’ legacy.  The stock drop assumption exists not because Jobs would leave a void but, rather, because investors, shareholders, and analysts believe there is no “Carry on!” in place.  Dispelling that rumor is the heart of the issue, not the “to disclose or not disclose” whether Jobs is ill.  When we fall into the either/or conundrum, it is almost always because we have not addressed an underlying problem.  The either/or conundrum is the symptom of being caught between a rock and a hard place, or, trying to preserve two good values by breaching another.   

About mmjdiary

Professor Marianne Jennings is an emeritus professor of legal and ethical studies from the W.P. Carey School of Business at Arizona State University, retiring in 2011 after 35 years of teaching undergraduate and graduate courses in ethics and the legal environment of business. During her tenure at ASU, she served as director of the Joan and David Lincoln Center for Applied Ethics from 1995-1999. In 2006, she was appointed faculty director for the W.P. Carey Executive MBA Program. She has done consulting work for businesses and professional groups including AICPA, Boeing, Dial Corporation, Edward Jones, Mattel, Motorola, CFA Institute, Southern California Edison, the Institute of Internal Auditors, AIMR, DuPont, AES, Blue Cross Blue Shield, Motorola, Hy-Vee Foods, IBM, Bell Helicopter, Amgen, Raytheon, and VIAD. The sixth edition of her textbook, Case Studies in Business Ethics, was published in February 2011. The ninth edition of her textbook, Business: lts Legal, Ethical and Global Environment was published in January 2011. The 23rd edition of her book, Business Law: Principles and Cases, will be published in January 2013. The tenth edition of her book, Real Estate Law, will also be published in January 2013. Her book, A Business Tale: A Story of Ethics, Choices, Success, and a Very Large Rabbit, a fable about business ethics, was chosen by Library Journal in 2004 as its business book of the year. A Business Tale was also a finalist for two other literary awards for 2004. In 2000 her book on corporate governance was published by the New York Times MBA Pocket Series. Her book on long-term success, Building a Business Through Good Times and Bad: Lessons from Fifteen Companies, Each With a Century of Dividends, was published in October 2002 and has been used by Booz, Allen, Hamilton for its work on business longevity. Her latest book, The Seven Signs of Ethical Collapse was published by St. Martin’s Press in July 2006 and has been a finalist for two book awards. Her weekly columns are syndicated around the country, and her work has appeared in the Wall Street Journal, the Chicago Tribune, the New York Times, Washington Post, and the Reader's Digest. A collection of her essays, Nobody Fixes Real Carrot Sticks Anymore, first published in 1994 is still being published. She has been a commentator on business issues on All Things Considered for National Public Radio. She has served on four boards of directors, including Arizona Public Service (1987-2000), Zealous Capital Corporation, and the Center for Children with Chronic Illness and Disability at the University of Minnesota. She was appointed to the board of advisors for the Institute of Nuclear Power Operators in 2004 and served on the board of trustees for Think Arizona, a public policy think tank. She has appeared on CNBC, CBS This Morning, the Today Show, and CBS Evening News. In 2010 she was named one of the Top 100 Thought Leaders in Business Ethics by Trust Across America. Her books have been translated into four different languages. She received the British Emerald award for authoring one of their top 50 articles in management publications, chosen from over 15,000 articles. Personal: Married since 1976 to Terry H. Jennings, Maricopa County Attorney’s Office Deputy County Attorney; five children: Sarah, Sam, and John, and the late Claire and Hannah Jennings.
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5 Responses to Apple Falls Into the Either/Or Conundrum

  1. Yacko says:

    People who are astute already know that Jobs underwent surgery called a Whipple procedure for his pancreatic cancer. Nutrition can be a challenge afterwards, possibly for the duration of the patient’s life. Do a Google on “Whipple Procedure” and another on steve jobs whipple and gain knowledge. I’m sure Jobs is healthy, but fragile and has the best medical advice and stress relief wealth can buy. I don’t think he’s gonna topple anytime soon.

  2. mmjdiary says:

    Or people who read the Fortune profile are aware of his health issues, astute or not. You have responded with a classic distraction methodology. The issue is: Should the company be more forthcoming? The answer is a simple yes. Vitriol and defensiveness do not help either the company folks or the shareholders.

    How good Jobs’ medical advice is and predictions on his topple are irrelevant to this commentary. This is a site for company and individual behaviors — not a sounding board for Jobs’ fans and alternative medical procedures.

    The issue is whether the company is prepared if, say, Jobs had an accident! The fact that it fears a stock price drop if Jobs even retires tells me, at a minimum, the company has not made the case that it is indeed prepared for a transition. The company needs a new strategy regardless of Jobs’ condition, treatment, status, weight,height,or Whipple. It might be a nice task for the Apple board to undertake such planning and then make the case to the public that, “We’re fine, with or without Jobs,” but, then again astute people know that the Apple board is not a bastion of action.

  3. carl says:

    okay, this is the best commentary i’ve read on this entire affair. most of the comments have, as you noted in reference to the first poster, discussed all types of irrelevancies (if that’s a word) in defending apple. i’m no corporate governance expert but, given way news was released re: mr. jobs’ cancer, he/apple can’t really act as if people are focused on his health. i had not thought of this issue in terms of in-place-succession-plan-as-antidote-to-health-privacy-invasion, but i believe, fair lady, you have justly nailed the issue (but you don’t need me to tell you that). cheers.

  4. Corporate Governance says:

    From a corporate governance perspective there are two issues at play:

    1. Officer’s right to health issues being a private matter (I certainly don’t want my health history aired in public).

    2. Officer’s ability to fullfil her role. It is the board’s duty to determine if the officer’s health is interfering from performing her duties. If it the board needs to act by making an announcement. If it is not and the board is sufficiently satisfied then the officer continues to serve his role.

    I think Apple addressed these in a cryptic manner. The terse note that Steve serves at the Board’s pleasure and that Steve’s health is a private manner. Implying that the board is not concerned that Steve’s health is interfering his work.


  5. mmjdiary says:

    Nope, once again, issue missed. Third one: corporate responsibility in relation to officer’s health. A cryptic note falls into the either/or. Either/or means you are balacning values in conflict: the officer’s right to privacy with the duty the officer owes to the company to perform (and the third duty just noted). Solving an either/or requires answering this question: is there a way to solve this problem without violating any of these values? Yes, there is, but I keep getting the either/or response was teh right thing to do.

    The cryptic note is the symptom, not a solution. The problem is, and not to put too fine a point on this, but “Can Apple survive without Steve Jobs?” (for whatever reason, health, retirement, etc.) The board should be able to give an unequivocal and non-cryptic, “Yes.” Most companies can, which is why when an officer becomes ill we don’t have these well choreographed mambos filled with half-truths, impressions, and deflection. Because no one at Apple seems to be confident about that answer, they engage in deflection, “crypticism,” and condescending protection of shareholders who really need the simple assurance from a long-term perspective. Jobs’ health (good or bad; serious or simply a rough patch) may well be the least of their problems. It is time for a little bit of Plan B.

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