This Month's Biggest Management Shake-Ups

From tech heavyweights like Apple (NASDAQ: AAPL  ) and Microsoft (NASDAQ: MSFT  ) to fast food chain McDonald's (NYSE: MCD  ) , a few major U.S. companies this month have taken the axe to top-level management. Let's take a look at how their respective stocks reacted, and how these changes will impact business going forward.

Apple's forced attempt to increase collaboration
Drama related to Apple's management shuffle at the end of October spilled into this month, with the stock moving into bear territory. In fact, shares have lost more than 16% of their value for the month of November. So what's really going on?

The company's new CEO Tim Cook ousted longtime Apple executive Scott Forstall. It's been rumored that Forstall was shown the door after refusing to sign a written apology for problems related to Apple's new maps service. It was also said that Forstall was unable to get along with other members of Apple's leadership team including Jony Ive. In any case, Forstall will stick around until next year and serve as an advisor to Cook, according to an Apple press release on the matter.

But wait, there's more...

John Browett, who stepped in as Ron Johnson's replacement as head of retail earlier this year, also got the boot. Browett may not have been a 15-year Apple veteran like Forstall, but the role of retail chief is critical to the company's success. By Apple Insider's estimates, "Retail operations currently contribute about a tenth of Apple's profits." With Browett out, Cook has temporarily taken over as head of retail.

However, instead of assuming the worst, investors should do a leadership head count. Indeed, many of the key innovators are still one with Apple's infinite loop. Jony Ive, for example, was promoted on the heels of Forstall's exit. On top of being Apple's lead designer, Ive will now oversee all human interface at the company.

In the wake of these changes, a total of four top-tier Apple executives have taken on more responsibility. In addition to Ive's new role, Eddy Cue is now in charge of Apple's online services division, which includes Siri, Maps, iTunes, and iCloud. Bob Mansfield, once the company's chief of hardware, will now step up as executive in charge of Apple's technologies group. Meanwhile, the director of Mac software, Craig Federighi, is now set to take on mobile software and overall control of iOS.

The way I see it, with Ive, Cue, Mansfield, and Federighi in the mix for the foreseeable future, investors needn't worry. My fellow Fool analyst Evan Niu thinks it's time to buy Apple, and I couldn't agree more. With shares trading around $510 a pop, Apple is cheaper than both Microsoft and Google (NASDAQ: GOOGL  ) despite demonstrating superior growth. For these reasons I plan to add to my position in Apple and think long-term investors should as well.

Microsoft changes things up
The Mac maker isn't the only tech company to have made big changes in top management recently. Microsoft joined the party earlier this month by firing Windows and Windows Live president Steven Sinofsky. The seemingly sudden departure came on the heels of several important product launches, including Windows 8 and the company's Surface tablet.

After just three years as head of Windows operations, Sinofsky's forced exit has left many analysts wondering about the future direction of the company.

Similar to Apple's recent shake-up, Sinofsky had trouble playing nice with other top executives at the company, including Microsoft CEO Steve Ballmer. Many investors had long considered Sinofsky a natural successor to Ballmer. Now that Sinofsky's been given the boot, weary shareholders may have to tolerate Ballmer for a long time to come.

Nevertheless, both of the changes at Apple and Microsoft reflect a broader shift in the competitive landscape of consumer technology. To compete in this industry, it's no longer enough to simply have great products. To remain relevant in today's market, tech companies must seamlessly integrate winning services across all of their platforms and products. Doing so requires top leadership teams that are able to work together and collaborate between departments.

In the case of both Microsoft and Apple, I think the changes at the top were equal parts necessary and smart. Stepping out of the tech sphere, let's take a look at another company doing the management shuffle this month.

McDonald's American shake-up
The fast food giant saw its shares dip this week after the company ousted its president of McDonald's USA, Jan Fields. The news came shortly after McDonald's reported disappointing sales figures. The position will be filled by Jeff Stratton, a Mickey D's veteran who's currently the company's global chief restaurant officer.

The position is of particular important to the success of the business considering the U.S. makes up about a third of McDonald's total revenue. Luckily, this change in management is much easier to stomach compared to Jim Skinner's departure earlier this year. During his nearly eight-year tenure at the company Skinner contributed to McDonald's resurgence as a leading American brand. Skinner retired this summer and was replaced by McDonald's chief operating officer Don Thompson.

Why change isn't always a bad thing
If we've learned anything this month, it's that even the most successful companies require change. As business owners, investors, and Fools we are at our best when we're able to easily adapt to change. I have no doubt that Apple, Microsoft, and McDonald's will continue to thrive regardless of recent shifts to their management teams. From an investment standpoint, Apple stands out among this group.

There is absolutely no argument that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, there is a debate raging as to whether Apple remains a buy in today's touch-and-go market. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and more importantly, your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2117511, ~/Articles/ArticleHandler.aspx, 10/23/2016 5:36:51 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
AAPL $116.60 Down -0.46 -0.39%
Apple CAPS Rating: ****
MCD $113.93 Up +3.36 +3.04%
McDonald's CAPS Rating: ***
MSFT $59.66 Up +2.41 +4.21%
Microsoft CAPS Rating: ****