Sample Management Paper on The Organizational Structure of Apple Inc.

Introduction

Apple Inc. is an American-based international company that was co-founded in 1976 by Steve Jobs, Steve Wozniak, and Robert Wayne. It is a technology company that deals with electronics, computers, financial technology, and artificial intelligence. The most common products are software, hardware, mobile device, and personal computers. Apple’s organizational structure is lauded to be the epicenter of the company’s success within the technology industry. The objective of this article is to describe Apple’s organizational structure and demonstrate how the structure has helped the company to create opportunities for business growth. The paper will also discuss some of the limitations of Apple’s organizational structure and the strategies employed by the company to overcome such limitations. Apple’s organizational structure positions the company for growth and development and is one of the leading reasons for the massive success the company has enjoyed over the years that have made it to be one of the most influential companies in the world.

Description of Apple’s Organizational Structure

Foremost, an organizational structure entails how the workforce and organizational resources are amalgamated to lay the groundwork for enhancing growth and development. According to Tasnim (2018), Apple has a combination of the traditional hierarchical structure that is collaborative, and product-division structure, and a notable weak matrix. The company uses a vertical hierarchy where the flow of tasks is downwards while the responsibility and accountability flow upward. The structure has a clear division of labor and well-written rules (Yun, Lee, & Aoshima, 2019). The company’s structure has undergone some significant changes since the change of leadership from Steve Jobs to Timothy Cook. Under Steve Jobs, the company used a bureaucratic/authoritative structure in which major decisions were made through the office of the CEO. Tim Cook introduced slight changes in Apple’s hierarchical structure, making it more collaborative.

Division of Labor and Distribution of Authority

Apple Inc. is headed by a CEO and a team of executives consisting of senior vice presidents. The CEO is at the top of the hierarchy followed by CFO, COO, Retail, Legal, Software engineering, among other executives that are organized in a function-based grouping. The SVPs are at the second level of the hierarchy and report directly to the CEO (Dewitt, 2011). Also, the functions at the second level are subdivided into various departments that are headed by the vice presidents. The role of the SVPs is to head business functions in their respective units. The SVPs distribute authority to the vice presidents (VPs) who are at the third layer of the hierarchy. The VPs have more autonomy under Tim Cook, which was not possible Steve Job’s leadership. All crucial decisions are initiated after the intervention of the CEO. The CEO is the head of all the responsibility.

Apple also has product-based divisions that demonstrate some elements of the divisional structure. The SVPs and the VPs are in charge of various products or outputs. For example, as demonstrated in the organizational chart above, the SVP for Software Engineering is in charge of macOS and iOS products while the SVP for Hardware Engineering is responsible for iPhone, Mac, iPod, and iPad products. In this way, the company can effectively manage various products or product components that it delivers to its consumers. The interactions or collaborations among various components constitute a weak-functional matrix. According to Heracleous & Papachroni (2016), a weak functional matrix is the one in which project directions are determined by top management. The project heads have limited control or authority and are directly answerable to top leaders. For example, Apple’s organizational structure allows hardware teams to collaborate with software team thereby facilitating the dissemination of information, which, in turn, makes it is easy to implement innovative processes that support brand development and premium pricing strategies.

Besides, all operations within the organization are divided into various subunits, including Global outsourcing, Control, Apple Care, Apple Online Store, Internet Services, Education Communication, Marketing, among other units (Soh & Najihah, 2019). This allows the subunits to be divided into several functions, each of which is headed by senior executives. All the executives heading various functions are required to report directly to the CEO.  The organization also emphasizes job specialization. All employees are aware of their work responsibilities and what is expected of them by the management. Though the company’s organizational structure is less stiff than it was under Steve Jobs, it still uses the spoke-and-wheel hierarchy established by the cofounders.

How Apple’s Organizational Structure helps it Achieve its Goals

Apple Inc. can find justifiably proud itself as being of the most successful technology companies in the world. However, Apple Inc. had severe financial problems and dwindling profits, a trend that began in the 1980s. Steve Jobs left the company in 1985 following leadership fallout. By 1996 the company had reached a near bankruptcy. Steve Jobs came back as the interim CEO after Apple bought NeXT Software, the company that Jobs founded after leaving Apple in 1985 (Nguyen, 2016). Jobs’ returned both with an innovative mindset with which he co-founded the company and great leadership capacity that saved the company from the brinks of failure. The failure of Apple Inc. before the return of Steve Jobs was as a result of dysfunctional leadership and management structure.

Apple Inc.’s organizational structure enhances quick decision-making process since it places control in the hands of top leadership. When Jobs returned, he redesigned the organizational structure and centralized decision-making processes and the supervision the Apple products. The innovativeness and the leadership of Jobs turned the company around from the path of bankruptcy to growth and prosperity (Gansky, 2017). The hierarchical structure with a centralized leadership style helped the company to gain strong control over organizational processes, decisions, and activities. Theoretically, the hierarchical structure empowered Steve Jobs to take control of the company and steer it towards success. The hierarchical structure still empowers Tim Cook to take control of the leadership and the direction of the organization. The product based-grouping ad the function-based grouping allows the CEO, the SVPs, and the VPs to control all organizational processes through the decisions of the CEO. This is crucial for creating an innovative environment.

Apple Inc.’s hierarchical structure makes it easy and necessary for the CEO to make decisions based on strategic factors that can help the company to take advantage of its opportunities, identify its strengths, minimize threats and overcome weaknesses. One of the internal strengths of Apple Inc is that it enhances rapid and effective innovation processes. Innovation is the fortress of the company enabling to stay ahead of stiff competition in the industry while maintaining high-profit margins (Amin & Munsi, 2020). The company’s innovation capacity enables it to keep pace with the emerging technologies enhancing its competitive advantage in the process. Through innovation, the company has managed to maintain a strong brand image over the years, especially after the return of Steve Jobs as the CEO.  Jobs introduced centrality, placing accountability and responsibility for all the decisions and process directly on the CEO. This places the CEO and the executives in control of everything that that goes on within the company.

When Tim Cook took over, he introduced interdepartmental and intergroup collaboration that increases the speed of response to innovation demands. The collaboration allows information to be disseminated freely within the company, making it easy for the organizational members to exchange ideas to improve its products. By virtue of this strength, the company not only maintains a strong brand image but can also take advantage of its brand image to introduce new profitable products. Besides, collaborations between various functions allow innovative product development that enhances premium pricing strategy, which generates high-profit margins. This allows the company to maximize profits even when the sales volumes are low.

Apple Inc.’s organizational structure also enables the company to take advantage of the opportunities available to the business. Essentially, opportunities are external factors within the industry environment that enhance the strategic direction of the business. Some of the most common opportunities available to Apple Inc. include increased sales volume due to increased demand, ever-expanding networks of distribution, and development of new products. As mentioned earlier, Apple’s organizational structure allows collaboration between various functions, which increases innovativeness. The company takes advantage of the innovativeness, and the strong brand image o develop new product lines, such as Apple Watch. Introducing new products is a strategy that can effectively support organizational growth in the global market.

However, Apple’s organizational structure limits the flexibility of the company. The lower levels in hierarchical structure lack the flexibility of the response to the market demands and business needs since the CEO and the top executives make all the decisions. In other words, the managers, supervisors, and employees at the bottom of the hierarchy do not have the autonomy to respond to the business needs or market demands. The lack of autonomy can be a demotivating factor that can lower morale among organizational members. The company has made some efforts to encounter this challenge by improving the structure to enable collaborations among product-based and function-based groupings. However, everything must still go through the CEO, the SVPs and the VPs, which implies that the company’s structure still does not support rapid response to changes.

 

References

Amin, M. R., & Munsi, M. (2020). Motivational Techniques for Business Organization–A Case Study of Apple Inc

Dewitt,P. (2011). Rethinking Apple’s org chart. CNN Money. Retrieved from

http://tech.fortune.cnn.com/2011/08/29/rethinking-apples-org-chart/

Gansky, A. E. (2017). Myths and legends of the anti-corporation: a history of Apple, Inc., 1976–1997 (Doctoral dissertation).

Heracleous, L., & Papachroni, A. (2016). Strategic Leadership and Innovation at Apple Inc. SAGE Publications Ltd.

Nguyen, X. T. (2016). The Intersection of Trademarks, Licenses and Bankruptcy: Ending Uncertainties in the Law. In The Law and Practice of Trademark Transactions. Edward Elgar Publishing.

Soh, N., & Najihah, N. (2019). AN ANALYSIS OF AN EXPLANATION OF APPLE INC (No. 97280). University Library of Munich, Germany.

Tasnim, M. (2018). An Organizational Analysis on Apple. European Journal of Business and Management10(11).

Yun, B. S., Lee, S. G., & Aoshima, Y. (2019). An analysis of the trilemma phenomenon for Apple iPhone and Samsung Galaxy. Service Business13(4), 779-812.