The apple company structure

Apple’s Organizational Structure

May 24, 2020 By Hitesh Bhasin Tagged With: Management

Apple Inc is a multinational company of American origin. It was found in the year 1976 by its co-founders Steve Jobs, Ronald Wayne, and Steve Wozniak. The company is associated with several technological industries like computers, electronics, artificial intelligence, financial technology, etc. ad deals in hardware, software, mobile devices, etc.

Currently, Apple Inc is one of the most popular and valuable companies in the world, valued at over one trillion dollars and this is because of the organizational structure that has helped it to create the groundwork for an effective system.

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Understanding Apple’s organizational structure

An organizational structure of a company includes an amalgamation of resources and workforce. It is the organizational design that lays the groundwork for developing and managing an effective organizational structure. It is this structure that creates opportunities for enhancing growth and development in the company.

Apple Inc has created an organizational structure that encourages rapid innovation and technological advances. It has adopted a traditional hierarchy and included some significant elements from various other types of organizational structures.

The company has deviated from a typical corporate structure that was being practiced in most companies and implemented a unique method to manage its organization. It had an informal corporate culture that favored a flat organizational ad hoc structure and not the tall structure.

The company faced intense competition because of its dynamic technology and innovation abilities. It needed an organizational structure suited to its sophisticated culture, and this is why it decided to adopt its existing organizational structure.

During Steve Job’s time, the company adopted an autocratic leadership style where the CEO or the leader was entrusted with micro-managing every operation. With time and under the new leadership of Tim Cook, the company has made some small changes in its organizational structure to meet the changing demands of industry and the global market. It has started with a bit of a collaborative approach and is prepared to decentralize on specific issues.

The organizational structure of Apple Inc believes in A-grade business performance to ensure leadership in its related industries. It has been going from strength to strength in product design and creative innovation to improve its capabilities and boost competitive advantage in international markets.

Apple Inc follows a hierarchical organizational structure where there are few layers of management. It is a large-sized company with an innumerable workforce that works in tandem under one head its CEO Steve Jobs, and after his resignation, the new CEO, Tim Cook.

The company Apple Inc gives credence to effective and intensive collaboration between various divisions and groups in its organization. Most of its products are the result of its product-based group strategy. Apple Inc has a board of directors in place that includes eight members belonging to a distinguished background.

Types and characteristics

The main features of Apple’s various corporate structures are

1. Spoke-and-wheel hierarchy

Earlier when the company was in the hands of Steve Jobs, all the major decisions related to strategic management had to be approved by him. Under the new management, the corporate structure has seen some changes.

For instance, there is more collaboration amongst its departments, like the software team is in touch with the hardware team to consider each other’s inputs. The vice precedents have now more powerful and can make autonomous decisions that were not possible under the earlier management. The organizational structure, in other words, is less rigid and a bit flexible.

Despite these changes, the company has a spoke-and-wheel hierarchy system with the new leader Tim Cook at its center. The innermost or upper-tier includes function-based grouping, and under it, the senior vice-presidents handle all the business functions and report to Tim Cook.

2. Product-based divisions

You will find product-based divisions in the upper and lower tiers of the corporate structure of Apple Inc. This element is taken from the divisional type of organizational structure where the vice presidents and senior vice presidents are appointed for various products or outputs. In the case of Apple Inc, there are senior vice presidents for several outputs like Hardware Technologies, ( hardware components) Hardware Engineering ( iPhone, iPod, iPad, Mac) and Software Engineering (macOS, iOS).

Its corporate structure is effective in managing product components or specific products that the company deals with to serve its target customers.

2. Weak functional matrix

The term weak-functional matrix about Apple Inc refers to the collaboration amongst the various departments or elements of the business. In this system, it is the responsibility of the top management to determine the direction the project is going to take.

The authority and control of the project head, in this case, is limited, and they have to report every detail to the top management, which gives them the necessary direction and input to move forward. The weak-functional matrix encourages collaboration between two teams of two different products or departments for the rapid innovation process.

Advantages

The benefits of Apple’s organizational structure are as follows-

• The hierarchy organizational structure in Apple Inc supports robust control by the management. It gives its top leaders the necessary power to make crucial decisions.
• The control rests in the hands of the top leaders, and it ensures a quick decision-making process.
• An essential advantage of Apple’s organizational structure is that it makes it easy to control product-based groups and business functions through the decisions of its CEO as well as top leaders.
• The organizational structure of Apple Inc encourages effective and quick strategic management process and its implementation that results in establishing a coherent thought process throughout the organization.
• The company encourages a multinational workforce, and this gives job opportunities to talented people from all over the world.
• As the organization is involved in many industries and products, the scope and opportunities for employees automatically increases
• Working with different types and mindset of people helps in improving the working style of the employees
• The company offers several incentives to its employees to encourage employee retention and job satisfaction
• Apple Inc has a highly developed beneficial program for its employees that includes insurance coverage schemes, employees stock purchase program, product discounts for employees, flexible spending account, investment plans, site fitness programs, etc.

Disadvantages

The problems of Apple’s organizational structure are as follows-

• The organizational structure of Apple Inc shows very little flexibility.
• It does not approve of any quick or rapid changes without the approval of top brass
• The hierarchy system prevents employees at lower levels to take part in any decision-making process
• It is not possible to meet or implement sudden changes at the drop of a hat because the decision-making authority is only with the CEO or very few top leaders
• There is a lack of transparency, and this is why information is not readily available
• The unique corporate culture at Apple Inc has resulted in several cases where unfair promotions and compensations have been doled out.
• The organization believes and promotes work culture without giving relationships any preference or due
• The employees are encouraged to work long hours, and this has a direct impact on their physical and mental well-being
• The stress level at the job is very high

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Apple Inc.’s Organizational Culture & Its Characteristics (An Analysis)

Apple Inc.’s organizational culture is a key factor in the continuing success of the business. A company’s organizational or corporate culture establishes and maintains the business philosophy, values, beliefs, and related behaviors among employees. This business analysis case shows that Apple has a corporate culture that enables human resources to support various strategic objectives. For example, the company’s cultural traits are aligned with the drive for innovation, which is a major factor that determines business competitiveness in the information technology, online services, and consumer electronics industries. Based on the organizational culture, this business condition facilitates the fulfillment of Apple Inc.’s corporate mission and vision statements. Through the leadership of Steve Jobs and, now, through the leadership of Tim Cook, the company continues to enhance its cultural characteristics to maximize human resource support for business relevance in various markets around the world. Apple shapes its corporate culture and uses it as a tool for strategic management and success.

Through its corporate culture, Apple Inc. strengthens its competitive advantages against other firms in various industries. The company competes against information technology firms like Samsung, Google, Amazon.com, Dell, Lenovo, Sony, and PayPal, as well as IBM and Intel. These competitors impose a strong external force that influences strategic management among firms in the industry, as illustrated in the Porter’s Five Forces analysis of Apple Inc. As a result, cultural traits must reinforce necessary competitive advantages through the workforce. The company partially achieves this strategic objective through its organizational culture.

Apple’s Organizational Culture Type and Characteristics

Apple Inc. has an organizational culture for creative innovation. The company’s cultural features focus on maintaining a high level of innovation that involves creativity and a mindset that challenges conventions and standards. The business depends on cultural support and coherence, which are determinants of competitiveness and industry leadership, especially in addressing aggressive and rapid technological innovation and product development. The following are the main characteristics of Apple’s corporate culture:

1. Top-notch excellence
2. Creativity
3. Innovation
4. Secrecy
5. Moderate combativeness

Top-notch Excellence. Apple’s organizational culture comes with a policy of hiring only the best of the best in the labor market. Steve Jobs was known to fire employees who did not meet his expectations. This tradition continues under Tim Cook. Such a tradition maintains and reinforces a corporate culture that promotes, appreciates, and expects top-notch excellence among employees. This cultural trait is institutionalized in Apple’s organization. For example, the company has programs that recognize and reward excellence among workers. Excellence is emphasized as a critical success factor in the business, especially in product design and development, which is a major growth strategy (see Apple Inc.’s Generic Strategy and Intensive Growth Strategies).

Creativity. This cultural characteristic pertains to new ideas that help improve the business and its products. Apple’s management favors creativity among employees’ knowledge, skills, and abilities. This characteristic of the corporate culture enables the company to ensure sufficient creativity, especially among employees involved in product design and development processes. Such creativity is observable in the design and features of iPhones, Macs, and iPads, among other products included in Apple’s marketing mix or 4Ps. In this regard, the organizational culture helps maintain the company’s capacity to satisfy customers’ expectations and preferences.

Innovation. Apple’s organizational culture supports rapid innovation. The company is frequently appraised as one of the most innovative companies in the world. Based on this cultural trait, the firm trains and motivates it employees to innovate in terms of individual work performance and contributions to product development processes. The corporate culture facilitates rapid innovation, which is at the heart of Apple Inc.’s business. Rapid innovation ensures that the company continues to introduce new products that are profitable and attractive to target customers.

Secrecy. Steve Jobs developed Apple to have an organizational culture of secrecy. This cultural characteristic continues to define the company’s human resource development. Secrecy is part of the company’s strategy to minimize theft of proprietary information or intellectual property. It is also a strategic management approach that enables Apple Inc. to maximize its leading edge against competitors. Through the corporate culture, employees are encouraged and expected to keep business information within the company. This cultural trait is reinforced through the company’s policies, rules, and employment contracts. In this context, Apple’s organizational culture helps protect the business from corporate espionage and the negative effects of employee poaching.

Moderate Combativeness. Apple’s organizational culture has moderate combativeness. This feature is linked to Steve Jobs and his combative approach to leadership. He was known to randomly challenge employees to ensure that they have what it takes to work at Apple. However, under Tim Cook’s leadership, the company has been changing its corporate culture to a more sociable and a less combative one. Nonetheless, combativeness remains a major influence in the business. Apple’s corporate culture exhibits a moderate degree of combativeness that presents challenges that aim to enhance employees’ output.

Apple’s Corporate Culture – Advantages, Disadvantages, Recommendations

Advantages and Benefits. The combination of top-notch excellence, creativity and innovation in Apple’s organizational culture supports the company’s industry leadership. The business is widely regarded as a leader in terms of innovation and product design. These cultural characteristics empower Apple and its human resources to stand out and stay ahead of competitors. This corporate culture enables success and competitive advantages, as well as the further strengthening of the company’s brand, which is one of the key business strengths shown in the SWOT analysis of Apple Inc. Creativity and excellence are especially important in the company’s rapid innovation processes for continuous competitiveness and business development.

Drawbacks and Weaknesses. Apple’s corporate culture brings challenges because of the emphasis on secrecy and the moderate degree of combativeness. An atmosphere of secrecy limits rapport among workers. Also, moderate combativeness has the potential to limit or reduce employees’ morale. These cultural issues can reduce business effectiveness and increase employee turnover. Apple Inc. can address this situation by modifying its organizational culture to reduce but not necessarily remove combativeness. This recommendation focuses on reducing the disadvantages of combativeness, without eliminating the benefits of combative approaches in the company. Also, Apple can integrate new cultural traits to keep the business relevant, given trends and changes in the information technology, cloud services, digital content distribution, and consumer electronics industry environment.

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