Saturday, January 21, 2012

A Brief History of the Sociology of Work

Throughout the history the “work” has transformed in parallel with the type of the society. There are mainly four types of society: Hunting and Gathering, Horticulture, Agrarian, and Industrial societies. In addition to this classification, it is possible to add the Knowledge Society to this classification.

Hunting and gathering societies were essentially nomadic and small-scale societies, had limited technology, and did not to produce a regular economic surplus. Male and female were equal in the sense that they all share the work since the survival of the group depended on the co-operation rather than competition.
Horticultural societies’ emergence based on the cultivation of plants and the domestication of animals. Use of metal instead of stone for tools and weapons, the increase in the population size, socio-economic specialization as workers and warriors, male domination, increase in trade are all properties of these types of societies. Women do most of the work in these societies where as men dominated the politics, religion and military.

Agrarian societies emerged with the widespread use of the plough and usage of the animal power for agriculture and transport. The animal power used in agriculture instead of human power, increased the agricultural output, which led bigger gains/profits in trade, and helped the increase of the population more and more. The specialization of people (working class) and the increasing power of non-productive class (feudal lords and church) led to a deeper stratification of the classes. The non-productive class saw the “work” as a necessary evil and did not ever took part in it; they concentrated on politics, religion and military. Meanwhile the working class worked and fought to survive under the command of landlords.

The main differences between the pre-industrial and industrial societies are that there were no or short term of profit, animal energy is widely used, unit of production is mainly the family, low degree of differentiation in division of labour, irregular or seasonal terms of employment, minimum level of education was available, purpose of work is subsistence, and payment was done in kind or cash in pre-industrial societies, whereas in industrial societies inanimate energy is used, unit of production are individual adults and organizations, high degree of differentiation in division of labour, regular or permanent terms of employment, extensive and specialized education was available, meaning of work is virtue, and payment was done in wages or profits.

Throughout time, women lost ground in society and managed to find lesser role in work life; from being an equal participant of the work to being only able to do the housework. In the first years of industrialization, women were preferred in textile and mining sectors since they work for lesser wage and were easy to control than men.

Traits of Turkish Entrepreneurs

Although the culture and external environment in Turkey are conducive to and advocate entrepreneurship as an acceptable path, it is argued that entrepreneurship in Turkey might be considered as a necessity-based entrepreneurship (GEM 2001).

In recent articles on the cultural and behavioural aspects of Turkish entrepreneurs Eroğlu and Pıçak (2011)  and Turan and Kara (2007)  revealed their findings as that Turkish entrepreneurs have such traits; (a) a family history of self-employment, (b) being the first child of the family, (c) almost half of the Turkish entrepreneurs had less than college education, (d) for female entrepreneurs “having more a network of family and friends that are self-employed” and “relying more on their previous experience or training in the area that they establish their new venture” are very important, (e) previous self-employment experience is among personal reasons for new venture creation, (f) people are more likely to exploit opportunities when they have relevant knowledge and experience from previous employment, (g) short-term oriented entrepreneurs, and (h) lack the strategic orientation and long-term vision due to less entrepreneurship education and Turkey’s long history of economic instability.

According to mentioned articles Turkish entrepreneurs are achievement oriented, highly responsible, impatient, and self confident, have high self-esteem, possess an internal locus of control (they do not give up easily), and like to work on their own. They are highly involved with the control of the operations of their businesses. They experience relatively high levels of stress and cope with this stress by working hard. The major challenges that Turkish entrepreneurs faced are greater responsibility, inability to obtain financial loans for start-up, inability to acquire location for the enterprise, inability to spend enough time with family, and stress due to hard work. These challenges are all consistent with the results of other studies that examined the profile of entrepreneurs (Young and Welsch 1993).

According to the Geert Hofstede Cultural Dimensions  analysis, the Power Distance Index (PDI), Individualism (INV), Masculinity (MAS), and Uncertainty Avoidance Index (UAI), Long Term Orientation (LTO) indicators of Turkish entrepreneurs are as follows:


Figure 1: Geert Hofstede Cultural Dimensions, Turkey

PDI is defined as “the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally”. Turkey scores high on this dimension (score of 66) meaning that the characteristics of the Turkish style is “Dependent, hierarchical, superiors often inaccessible and the ideal boss is a father figure”. Power is centralized and employees expect to be told what to do. Communication is indirect and the information flow is selective, which is very necessary for the dissemination of information among the networks inside and outside of the company that that positive effects on the competition strength of a company.

For IDV indicator, Turkey, with a score of 37 is a collectivistic society meaning that “the “We” is important, people belong to in-groups (families, clans or organisations) who look after each other in exchange for loyalty. Communication is indirect and the harmony of the group has to be maintained, open conflicts are avoided. The relationship has a moral base and this always has priority over task fulfilment. Time must be invested initially to establish a relationship of trust. Nepotism may be found more often. Feedback is always indirect, also in the business environment”.

The fundamental issue in MAS is what motivates people, wanting to be the best (masculine) or liking what you do (feminine). Turkey scores 45, which puts it on feminine side, meaning that “the dominant values in society are caring for others and quality of life; and quality of life is the sign of success and standing out from the crowd is not admirable. In masculine societies people are “driven by competition, achievement and success, with success being defined by the winner / best in field – a value system that starts in school and continues throughout organisational behaviour”.

UAI score reflects “the extent to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these”. As seen from the figure Turkey scores very high on this dimension. This creates a problem for making business high-risk technology sectors which in fact provides high-profit returns who can cope with the high-risk.

LTO score is not available for Turkey. “The long term orientation dimension is closely related to the teachings of Confucius and can be interpreted as dealing with society’s search for virtue, the extent to which a society shows a pragmatic future-oriented perspective rather than a conventional historical short-term point of view”. By using the studies of Eroğlu and Pıçak (2011) and Turan and Kara (2007) we can infer that the LTO score for Turkey will be low since Turkish entrepreneurs lack of long-term vision.
Another report which focuses on the measures of entrepreneurship is Global Entrepreneurship Monitor (GEM) report.

The GEM report (2010) repeatedly mentions the importance of opportunity-based entrepreneurship rather than the necessity-based entrepreneurship. Improvements in wealth and basic requirements (infrastructure, economic stability, education) stimulate opportunity-based businesses, shifting the nature of entrepreneurship activity. These ventures are more likely associated with greater aspirations for growth, innovation and internationalization. The following chart shows the increase in opportunity-based entrepreneurship as the GDP rises:


Figure 2: Necessity-Based Early-Stage Entrepreneurial Activity and Per Capita GDP 2010

The GEM report shows that in the innovation-based economies the opportunity-based entrepreneurship is higher and as seen from the chart, Turkey is on the necessity-based entrepreneurship side.

But shifting from the necessity-based entrepreneurship to opportunity-based entrepreneurship is strongly related with the wealth (capital accumulation) of entrepreneurship. While the capital accumulation is possible with managing the business successfully, the financial options within an economy play a crucial role in supporting businesses in a globally competitive environment.

Traits of Steve Jobs

Steve Jobs well known for his bad temper, cruelty against employees, arrogance and ignorance. Despite the intensity of his behaviour reduced as he matured, he defended himself as “This is who I am, and you can’t expect me to be someone I’m not”. In his book “Steve Jobs” Walter Isaacson (2011) writes “many would end their litany of horror stories by saying that he got them to do things they never dreamed possible.”
Other than his personal traits, which forced employees to the edge of their potential, it is important to scrutinize his business traits in order to use for later comparison.
Jobs lived in an environment where an emerging technology was well known and applied. So he had chance to meet and exchange ideas with enthusiasts of this new technology. Being in an environment where the emerging technology is widely acknowledged provides the entrepreneurs to closely examine the opportunities.

Jobs had a talented partner who is a computer expert, Wozniak, and Jobs had a never ending energy for marketing the product in local fairs. Business, no matter how gifted, is not a one man activity. It requires capital, knowledge and marketing expertise to produce a product or service. Focusing on a specific type of technology or product enables entrepreneurs to gain the opportunity for producing an innovative product thanks to the absorptive capacity of the experts in the production team. Jobs employed the best experts in their fields, which provided him the crucial input, the absorptive capacity, to make innovative products.
Silicon Valley was becoming an attractive area for venture capitalist, who made their fortunes from sectors like oil, finance, constructing and retail. Jobs knew that he needed capital to produce Apple II and his search for capital was met by Mark Markkula with a $250,000 investment. One other crucial asset for producing innovative products is the capital. Since a new technology is hard to produce and expensive to gain, entrepreneurs need seed/venture capital to establish in order to start and continue the production of the technological product. Also the technological products involve high risk of failure due to the changing and competitive nature of that technology, so a venture capitalist is crucial to back-up the entrepreneur financially in order to keep the company produce. So it is important to mention that strong venture capitalist structure is necessary for successful entrepreneurship.

Despite his young age, 25, Jobs managed to accumulate a personal wealth of $200 million. As well-known from the economy theory, the capital accumulation by the capitalist enables him/her to invest to new / emerging technologies. Also, Jobs was lucky for living in an era in which the world is experiencing a passage from modernity to post-modernity with the crisis of Fordism and birth of Information and Communication Technologies.

Jobs was not the only entrepreneur in the computer industry of course. There was strong competition among IBM, Apple, Commodore, Tandy, Atari, Texas Instruments and many other firms. Not only the computer production firms existed in USA but also there were numerous part producers who work in a vertical relationship with large computer production companies. The networks and interactions among these companies enabled them to keep each other informed about the innovations in the computer components and production processes.

From the very beginning it is seen that Jobs paid great attention for the usage of highest technological products available on the market and he had spent great amount time in the design of the products. There is not any explicit reference but it is possible that Jobs was very well aware why Commodore company went bankrupt, and he did not want to happen the same thing to Apple. Commodore 64 had a bad reputation in home users market that it is slow and low-quality.

Also it is necessary to mention that a strong Intellectual Property Rights (IPR) system enables entrepreneurs to gain the profits they deserved for investing capital and effort in the production of innovative products. USA is well known for its IPR system, and entrepreneurs, by knowing that they are protected against infringements, are more eager in innovation.

Despite his criticized management skills, his company was Jobs’ life. He dedicated himself for the survival of his company which operates in a harsh competitive environment. So another issue that deserves mentioning is the dedication of entrepreneur to his/her company and its products.

He experienced successive market failures of this company’s products, namely Apple II, Lisa and Mac. Despite they were very successful products their high price prevented them gaining a big portion of the market share. In a high-technology company that relies on scale economy to compensate the high investment expenditures, the market share is crucial. So Jobs experienced and learned the consumer markets by failing over and over again. It took many years and many projects to be able to come up with revolutionary products like iPod and iPhone.

By making investments in a computer animation company, Pixar, which operates in a very new industry, Jobs again was able to gain the opportunity of being the first entrepreneur in market full with high profits. This investment of Jobs may be used as a proof of his ability in forecasting the market for a technology, which eventually raised his personal wealth to $1.5 billion.
Instead of producing a large set of products and services, Jobs focused on a very limited set of products in Apple after he re-assigned as the CEO of Apple Computer Inc in 1997. This enabled him and the company to focus their limited resources on products that could make a difference for the company in competition. So, again, other than losing energy for a wide range of products, focusing on a limited product family seems to be crucial.

Jobs, with the release of Power Mac G3 and PowerBook, came up with a slogan, Think Differently, in order to create a consumer loyalty for Apple products by giving them the message that they could change the world if they use a Power Mac or PowerBook. Consumer loyalty is crucial for the survival of a company and Jobs was aware of it. He achieved this with the release of iMac and iBook which were really innovative products and increased the market share of Apple.
Another technological forecasting of the company was their positioning for market in which the digital lifestyles of next generation will have a big impact. So by focusing on the digital hub products, iPod was created. It became so popular that Apple acquired the %75 of the digital music player market. Again, it is seen that their ability to forecast the next big market enabled them huge profits.

iPhone was one of the most innovative product not only Apple produced but also any of its rivals produced. It revolutionized the way people communicate and interact. When dismounted, iPhone is in fact a bundled hardware which includes many technological innovations within it. Thanks to the technological advancements, the size of each component was small enough to be assembled altogether. So many man hours spent on the design on the product; Jobs spent in the design room of Apple with its design team lead for hours trying to make it more easy to use, more robust and more fashionable. His ability to bundle such new technologies and to present them in a fashionable was worth mentioning. Also creating an application market that is open only to Mac users is another marketing success of Jobs.
In one of his speeches Jobs said that he thought the iPad long before the iPhone but he decided that iPhone should be released first. By warming the consumers to the concept of touch screen electronics gadgets, he was well aware that iPad sales will be more easy and profitable. So, it is worth mentioning that Jobs had a strong insight about the market and about the consumer products. Despite the general belief that user involvement during the design of a product is beneficial for the success of the product, Jobs refused to involve consumers to the design process saying that “People do not know what they want until you show it to them”. Jobs was very interested with the aesthetics and the simplicity concept, but involving consumers to this process would increase the complexity of the final product. So again dedication of the entrepreneur and easy-to-use concept of the product are important to note.

It is necessary to summarize the above mentioned traits of Jobs as keywords, a high technology entrepreneur who successfully managed to innovate revolutionary products: Started at early ages of his life, being in the core of the technology valley, having computer enthusiast partner, marketing ability, opportunity-based entrepreneurship, focusing on a specific set of products, working with experts in their areas, connections with venture capitalists, using the high-quality latest components, a strong IPR system, dedication, business and market experience, technology and market forecasting, earning consumer loyalty, incremental innovations after a successful innovative product, attention to the design and usability, bundling and presentation of innovative products.

These keywords are useful in order to decide whether or not next Steve Jobs will be a Turkish entrepreneur or not, and if not, what kind of traits and systems needed to bring out the next Steve Jobs among Turkish entrepreneurs. For this aim, it is necessary to study the traits of Turkish entrepreneurs.

A Brief Biography of Steve Jobs

(For the complete biography visit http://allaboutstevejobs.com/bio/short/short.html)

In his brief biography , it is seen that Jobs started innovating and making business in early ages of his life. He was living in the valley, which later turned into the world’s most condensed technology area, the Silicon Valley. He was surrounded by microelectronics and computer enthusiasts, like Steve Wozniak, and Jobs had a deep interest in computers. Wozniak was making computers and Jobs suggested him to sell those computers together, for which they established the company Apple Computer Inc.
It was the early ages of computer era, which was full with opportunities for the early starters. Wozniak finished Apple II computer in 1977 and they both knew that this computer was a breakthrough since it had no match in the market due to its breakthrough hardware features (including its colour graphics) and its very large supply of compatible software. For the mass production of the Apple II, Jobs knew that they should find a venture capitalist, so he made a deal with Mike Markkula, “an enthusiastic former Intel executive who invested $250,000 in their business and assured them their company would enter the Fortune 500 list in less than two years”.

Apple II was a big success and in its fourth year of existence in December 1980 Apple Computer Inc went public. At the age of 25, Jobs’ net worth passed $200 million.
Due to its high profit margin, computer industry was very competitive and rivals of Apple were releasing their computers to the market day after day. Commodore 64 was one of them, which was much cheaper than an Apple computer with its similar features but with a perception of consumers that Commodore 64s were low quality.

Lisa computer, with its advanced user interface, followed Apple II but Jobs due to his temperamental personality was thrown out of project Lisa, in a company which he established. Deeply angry, he started a project called Mac which will eventually undermine the success of Apple II and Lisa. Apple II was selling good but it was too expensive for home consumers. Lisa with its advanced graphical user interface was not a big market success. With the support of Apple Computer CEO John Sculley, Jobs introduced the Mac. Although the Mac’s sales were encouraging, it did not last long. This was a three-in-a-row market failure for Apple Computer Inc. Combining with his arrogance and management mistakes, the CEO and other directors of Apple declared a new organisational chart in which jobs was the chairman with no managerial duties whatsoever.

In 1985, he was introduced to a team of computer graphics experts who had a dream of making computer animated movies. He bought the company for $10 million, incorporating it as Pixar. In the same year Jobs announced to the Apple board that he will make a new computer for higher education and scientific research purposes and he will take the best engineers and sales experts in the project Mac. Apple board disapproved and threatened to sue him; Jobs sold his stocks in Apple for this reason, with disgust.
He started working on his new computer and aimed industry’s highest standards: “he wanted the best hardware, built in the world’s most automated factory, and running the most advanced software possible”. However great it was, NeXT’s sales were not good enough due to its high price, and also useful software was missing.

His investment in Pixar led to nowhere; he shut down the hardware section of Pixar but kept the animation division, because it was the only division that was producing revenue with its business by producing animated commercials for TV channels.
With an animated movie contract from Disney, called Toy Story, Pixar started making business again. Jobs realized the power of Disney brand, and decided that Pixar should go public after the release of the Toy Story: “Toy Story’s box-office success was only surpassed by the Pixar stock’s success on Wall Street”. His net worth rose to $1.5 billion.

Meanwhile Apple was loosing ground fast; it was announced that its losses was $700 million for the first quarter of 1997. In 1996, new CEO of Apple, Gil Amelio, decided to replace the Mac OS operating system with NeXTSTEP, which belong to Jobs and acquired the NeXT for $400 million. Jobs became the official advisor to the CEO in Apple.

Due to major losses of Apple Computer, the board decided that Amelio was not capable of managing the company and assigned Jobs as the interim CEO of the company. “He immediately started an extensive review of the whole company, cutting the number of projects from hundreds to a dozen. The number of hardware products would be cut down to just four.”
Jobs gave confidence to the company and launched a new marketing campaign: Think Different “spreading the idea that people who used Macs were dreamers who could change the world”. As the company started growing again, they introduced two new products to the market: Power Mac G3 and PowerBook.
In May 1998, Jobs introduced the iMac to the consumer markets, which was the first really innovative product since Macintosh which was announced in 1984. iMac was a high selling product and it brought back developers to the Mac platform. Incremental innovations in design continued throughout 1998 and 1999, which resulted in the birth of coloured iMac and iBook. Jobs became full-time CEO of Apple Computer Inc in 2000.

Based on Apple Computer’s technological insight, company decided to focus more on the handheld consumer products which they thought that the PC will evolve into digital centers for new digital lifestyles, i.e. digital cameras and camcorders, MP3 players, smart phones and other digital devices. Based on its digital hub strategy company introduced the so-called iApps to manage the new lifestyle: iMovie (1999), iTunes (2001), iDVD (2001), iPhoto (2002), iCal and iSync (2002), GarageBand (2004) and finally iWeb (2006).
Out of these iApps, iPod enabled Apple to gain a huge market share (%75) with “its beautiful design, its brilliant user interface and click wheel, its fast FireWire connectivity and its ability to sync with iTunes seamlessly”. Incremental innovations continued and even more iPods are introduced: iPod mini in 2004, iPod shuffle then iPod nano in 2005.

In January 2007, Jobs introduced the iPhone in Macworld. Its features revolutionized the phone industry with its multi-touch technology, Web surfing and iPod capabilities, easy-to-use interface, application centre, GPS and compass features, and many more. On March 2, 2011, Apple announced that they have sold 100 million iPhones worldwide .

In 2010, after he recovered from surgery, Jobs came back on the stage for the announcement of iPad; “Steve Jobs clearly stated that in his opinion, iPad had started the post-PC era, and that PCs would eventually become “like trucks”, a marginal part of a market dominated by portable tablets”.