Organizational Theory and Apple Organisation - Essay Example

Organisational Theory about Apple Organisation Student’s Name: ID Number: Subject: Tutor: Date: Introduction The world is becoming revolutionised with each passing day, change is occurring rapidly whether in an organised or disorganised manner. Thus, organisations are forced to deal with very challenging structures and concepts. This is where organisational theories become relevant as they involve the examination of concerns related to organisations. This is particularly important as it brings about the analysis and discovery of new life meanings and challenges both in and out of the organisations. It is for this reason that this essay aims to address the importance of organisational theory in a real company. Organisational theories are meant to explain an organisation and its structure. In this case the Apple Inc. organisation will be explored in details and the two theories; structural contingency theory and sense-making theory will also be examined comprehensively and how they relate to the Apple Inc. Apple Inc., an American Multinational Corporation, has its main focus on manufacturing and designing end user electronic and interconnected products. The most popular products include the iPod (Portable media player), Mac line of personal computers, iPad computers and the iPhone. The various software from Apple Inc. include the Mac and X operating systems, iLife suite, iTunes browser and creativity software as well as iWork and safari web browsers. The company was founded by Steve Paul Jobs, Ronald Wayne and Steve Wozniak in April 1976. Its purpose was to make and sell computers. It was then incorporated in January 1977 as Apple Computer Inc which was later renamed in January 2007 as Apple Inc. (Daidj 2011). This was a reflection of its focus shift to consumer electronics. Apple Inc. is the second largest information technology organisation and the third world’s largest mobile phone developer. In 2008, it was named as the most admired company in the United States and in 2008 to 2012 it was the world’s most admired company. Apple is in fourteen countries with 408 retail stores as at May 2013. Apple is publicly owned and is the world’s largest publicly traded corporation in terms of market capitalisation. The company has 72,800 full time permanent employees and 3,300 full time temporary employees worldwide. Its revenue for the year 2013 was $170billion. Apple’s success is mostly attributed to its late co-founder Steve Jobs but even with his passing on, Apple Inc. is still solid and flourishing ( Apple,2014). Since Apple Inc. operates in unpredictable market trends due to dynamism associated with information technology, assessing its contingencies is quite hard and complex. Different people at this organisation engage themselves in manufacturing, others are in assembling and marketing lines. To realise set goals, the management of this organisation need different approaches in organising and integrating the workforce. In respect of this aspect, structural contingency as well as sense-making theories are suitable in describing and analysing organisation strategies at Apple Inc. Apple Inc set out at offering products that would form part of the consumers’ daily life. The management had a vision of what was lacking in the current market and how such lack was affecting communication, business transactions and social relationships. At one time Steve Jobs noted that Microsoft lacked taste a fact that helped Apple develop its own capacity and paths for its future niche. Steve Jobs strategic stories are a reflection of the company’s sense-making theory adaptation. The foundation laid down at the time has helped the firm wither competition from emerging markets in electronic and interconnected products. Apple Inc’s success was also gradual and mainly driven by Mac computers. The firm’s management was keen at differentiating its products from other firms and in so doing relied on different level managers in driving its innovation agenda. The firm had a vision of meeting all the clients’ needs in one device. Even where contingencies arose in its structural change the management was committed to achieving its vision. It is therefore evident that sense-making and structural contingency theories influence Apple Inc. organisation strategies. Besides Apple Inc., Australian Worldwide is also another interesting company which deals with Fast Moving Consumer Goods. Like Apple Inc., this organisation has several retail stores in different countries hence has many employees. In this respect, it is affected by various internal and external contingencies that require accurate decision on the type of management structure to adopt. In this case, both sense-making and contingency theories apply. Both companies require wide consultation when making critical decisions concerning management structure. Organisations with many employees in different stations face similar challenges although this depends on various aspects such as line of products as well as internal management. These two companies deal with totally different products hence may not face similar challenges. However, they use similar management structure and adopts the same theories in major decision making. This paper draws from various seminal papers with which the two theories chosen relates to. Miles (2012) notes that the structural contingency theory is premised on the fact that there exist no single best organisation structure, but rather the appropriate organisational structure is dependent on contingencies facing the organization. According to this theory the organization will therefore be effective if the management fit the characteristics desired of the firm. Miles (2012) further notes that the firm’s effectiveness has shifted from being the role of the top management and cascaded down to structural variables that rely on certain levels of contingency variables. The organizational structure of Apple Inc. is a mechanistic one where different levels have simultaneous interdependencies hence apply this theory to deal with various prospects it faces in the course of operation. Sense-making theory is on the other hand is based on how people notice events, the meaning of those events and how these meanings arising from the events influence their present and future behaviours (Miles 2012). People derive the importance of events through experiencing such events. Since organisations such as Apple Inc. comprises different individuals at different levels of management, the sense-making theory helps members interpret, understand and draw sense of their environment through interacting and communicating with each other. The organisation therefore creates a sense reference frame from which members can understand each other and act collectively hence enable the organisation to succeed in highly challenging environment. Weick, Sutcliffe & Obstfeld (2005) alludes that sense-making incorporates changing circumstances into situations that are understood explicitly and hence serve as a springboard into action. Sense-making is the primary point whereby people are able to identify and interpret the meanings and act accordingly. The sense-making theory is future oriented and helps the management forge its identity in a well visible manner. The theory is sense-giving and the construed meaning helps steer the firm in a preferred direction. According to Donaldson (2006), the contingency theory holds that for an organization to have an effective organizational structure then, the structural design should fit the contingencies. Although the contingency theory faces challenges due to its static nature, these limitations lead to innovations in this theory. A firm in fit benefits from high performance and as a result may expand due to surplus resources. However the growth of the firm increases its contingency level and may lead to a misfit in its existing structure. Palmer & Dunford (2002) allude to the fact that there is no one best organization structure but rather depends on the contingencies. They further notes that if a phenomenon exists then it’s possible to draw a conclusion for another phenomenon. A manager with a freewheeling disposition will therefore be faced with difficulties in managing a highly structured organization. Structural contingency and sense-making theories assist management in planning, organizing, directing and controlling people and resources in an organization. The sense-making theory brings about information seeking and its use. This theory analyses how the individuals in an organisation seek information from gaps emerging in the market and springing into action (Brenda 1998). Whenever people observe a unique trait or source of information they tend to draw a lesson from it and form a basis for their current and future actions. It is therefore experience that assists in being able to understand and make sense of the information gathered. Managers are able to organise the employees through making sense of information they gain. Sense-making therefore entails a new and unusual set of circumstances that the individuals must realise before they can act on it. Whenever a manager faces complexity in the business environment, sense-making helps him comprehend explicitly in words and directs the course of action to be taken (Weick, Sutcliffe & Obstfeld 2005). An individual is able to evaluate a difficult situation, criticise an existing one as well as form an opinion. Sense-making also forms the basis for examination and review of actions to be taken. Decision making in an organisation is influenced by factors i.e. contingencies within and without such as government regulations, competitors, customers, technology and suppliers among others. The management structure is therefore dependent on these factors and hence no single structural design is suitable in making decisions. The issue of great concern is the importance of the decision to be taken. The management needs to analyse whether the decision can be reversed or not. Sense-making theory also relates to this theory in determining the amount of information available to the leadership and subordinates. An analysis should be done to access whether similar decisions have applied before and their implications (Miles 2012). Another issue of great importance is the ability of a firm to remain fit after growth occasioned by effective management. According to Donaldson, (2001) firms that have diversified as a result of effective management while retaining their functional structure misfits their strategy. Regaining fit leads to adopting a divisional structure instead of down-scoping the existing functional structure. The external and internal contingencies therefore play a role in determining the structural design of the management. A change in the environmental factors leads to a change in organization structure that reduces losses as a result of misfit. However if a contingency arises as a result of internal organisational characteristic, then the managers can be in a position to control it without necessarily changing the structure. In the light of these theories, Apple Inc structure has been widely dominated by several structural designs that take into consideration the emerging market trends. Although Steve Jobs was the overall sense of direction in the company, he always led his subordinates in understanding the company’s vision before rolling out new products. The firm has been seen to remain fit even as sales and assets base plummeted. The growth in online shopping for instance led to the firm’s closing a majority of its retail outlets. This decision has been influential in increasing its sales revenue more so with its itune platform while reducing the operational cost. Sense-making is another issue that Apple Inc portrays. Being in a market dominated by giant manufacturers such as IBM, the firm cut its market niche through rolling out of unique products. Apple management realised a gap in the market information and rushed in to fill it and had to make sure that the subordinates tagged along. Decisions at Apple have always been set on ‘thinking differently’ a slogan that has helped redefine and venture different markets. The organisation theories discussed however have various limitations such as their static nature and failure to convince all subordinates in agreeing to the managements’ decisions. The structural contingency theory is assumed to be static when a firm attains fit. The fit position is assumed to be the equilibrium point and as such growth is witnessed that leads to changes in the firm. According to Donaldson (2001) a company only retains its fit temporarily and will experience structural changes due to growth. It therefore becomes increasingly difficult to create structural designs due to these contingencies. In a complex world full of uncertainties and continuous change, sense-making is difficult since this is mostly required when one is under threat. Fear is therefore a major limitation in sense-making where those responsible for designing the organisation structure are forced to explore new sources of data that will help interpret and form new mental models (Heifetz, Grashow & Linsky 2009). Reliability on sense model whenever a situation seems difficult, fear leads to reinforcing the existing maps and reliance on old information which may inhibit decision making. Different perspectives associated with Apple Inc. utilisation of sense-making and structural contingency theories are also evident. The management at Apple has been at the core leadership and sense of direction with departmental leaders having an equal responsibility. Stakeholders may find it difficult with the sense-making approach used at Apple since the subordinates have been seen to convey their ideas that may differ with that of the management. Whenever employees are faced with difficulties, the management should provide a structure where such may be addressed without interfering with its core values. Drawing lessons from experiences may also be perceived differently from stakeholders more so where such lessons may have led to huge losses. Apple Inc management has always considered the firm as a huge start up. The external factors rarely bother the management and as such the firm is viewed like one which has attained fit yet growth is evident. Apple is focused on its products innovation with little reference to what competitors are doing. Contingencies also arise as the firm grows. Changes in technology also affect the organisation structure and require a shift from the static equilibrium to a different structural design. As a manager, I would advocate for better treatment of subordinates and elimination of bureaucracies thus enabling employees achieve a sense-making approach to events. It’s is easier to believe what one has experienced and will draw lessons that can be used currently and also in the future. In situations where employees are seen to differ with the management, sense-making theory help in ensuring reliance in ones judgements as well as communication that forms unity. For instance, Apple relies on its employees to develop new products and as such employee’s decisions forms part of the management organisation strategy. Eliminating the static nature of the organisation can be attained by setting the organisation structure dependent on the contingencies. The company should embark on having different strategies that change according to changes in both internal and external factors. The firm can also avoid misfit by utilizing efficiency and adjusting its structural design accordingly. The structural contingency issue can also be eliminated by having leaders and subordinates who possess relevant and quality information. In this regard when subordinates are treated with respect, they may accept autocratic decisions from the leadership as well as participate in decision making. Conclusion Organisational theories are vital for the success of any organisation as long as they are applied in the right way and follow the right processes. The essay has examined sense-making theory and structural contingent theories in relation to Apple Inc. The use of sense-making theory has helped the firm meet the ever increasing demand for its products. The employees and the management have the courage to venture into different market segments and thus relying on their senses in formulating decisions. This is evident where the firm has remained rooted even after the passing on of Steve Jobs. Apple Inc management also treats its subordinates as equals and are involved in designing the organisation structure. The firm does not have a single organisation strategy but rather different levels are tasked with the responsibility of driving the firm’s values. The firm does not have bureaucracies which would hinder implementation of its policies and thus being able to avoid contingencies which would affect it negatively. These two theories therefore supplement each other in making Apple Inc a success. References Apple http://www.apple.com/pr/library/2008/01/22Apple-Reports-First-Quarter- Results.html. Retrieved March 27, 2014 Brenda, D. 1998, ‘Sense-making theory and practice: an overview of user interests in knowledge seeking and use’, Journal of Knowledge Management, vol. 2, No. 2, pp.36 – 46. Daidj, N. 2011, ‘Media Convergence and Business Ecosystems’, Global Media Journal, vol. 11, p19. Donaldson, L. 2001, The Contingency Theory of Organizations, Sage, Thousand Oaks. Donaldson, L. 2006, The Contingency Theory of Organisational Design: Challenges and Opportunities, UTA School of Social Work, Community and Administrative Practice, viewed 28 March Heifetz, R., Grashow, A., & Linsky, M. 2009, The practice of adaptive leadership: Tools and tactics for changing your organization, Harvard Business Press, Boston. Miles, J. 2012. Management and organisation Theory. San Francisco: Jossey Bass Palmer, I., & Dunford, R. 2002, ‘Out with the old and in with the new? The relationship between traditional and new organizational practices’, International Journal of Organizational Analysis, vol. 10, pp 209-225. Weick, K.E., Sutcliffe, K.M., & Obstfeld, D. 2005, ‘Organizing and the Process of Sensemaking’, Organisation Science Journal, vol. 16, No. 4, pp. 409-21. Read More