Apple's Success Attributed to a Strong Organisational Structure - Case Study Example

ORGANISATIONAL STRUCTURE By Name Course Instructor Institution City/State Date Apple Inc – Organisational Structure Introduction Apple Inc was established in 1977 with the objective of designing, manufacturing as well as marketing media and mobile communication devices, digital music players, and personal computers (PCs). Currently, Apple sells different products ranging from accessories, services, software, third-party digital applications and content and networking solutions. Apple has differentiated itself from other competitors by focusing on serving individual consumers instead of the large customer base. Apple became the first company to market PCs and had since its establishment pursued a core purpose: making its products available to all its customers. The main goal of the company is offering few products at the high-end level, concentrating on increasing their revenues and attracting many customers. Apple competitive advantage is attributed to its ability in developing high-end service products, hardware, and software, which interact in the well-built environment. The objective of this piece is to classify apple structure, analyse factors or contingencies influencing its structure, determine the effectiveness of its structure in enabling the organisation to realise its strategic direction, examine how it evaluates its effectiveness, and to assess the structural problems associated with its organisational structure Question 1 Basically, the organisational structure is vital since it describes how jobs in an organisation are formally coordinated, grouped and divided. Given that Apple is an entrepreneurial organisation; the company has structured structure itself in a manner that allows for exploitation of the new opportunities. As mentioned by Meyer (2017), the organisational structure of Apple is considered to one of the factors that have contributed to its successful innovation. The company’s organisational structure has generated opportunities for its growth. Apple has for many years used the traditional hierarchy structure but has integrated numerous fundamental elements from other forms of organisational structure. Although the company success is associated with the leadership and innovation, Meyer (2017) argues that organisational structure has also contributed to the success of Apple. When Tim Cook became the company’s leader, only a few changes have been made to the organisational structure with the objective of suiting the industry and market demands. Dudovskiy (2016) describe Apple organisational structure as hierarchical, which was developed by Steve Jobs. Job developed this structure with the objective of ensuring the company realise its vision and becomes innovative. Apple organisational structure has been subjected to certain modifications since the leadership. But after assuming the leadership role, Cook has made a number of modifications to the structure; for instance, he somehow decentralised the decision-making process to facilitate creativity as well as innovation at various levels. Still, the organisational structure is to a larger extent hierarchical. Dudovskiy (2016) further mentions that product-based grouping is an additional main attribute of the company’s organisational structure. Apple product portfolio such like Apple TV, iPhone, iPad, as well as iWatch were developed through collaboration between product-based groups. Centralization, according to Koufteros et al. (2014) is an important organisational structure dimension, whereby the authority to make decisions resides in the top management team. Centralization focuses on the decision-making locus, and it establishes the authority making rightful decisions that influence the organisation. At Apple, the decision-making process is typified by a top-down mechanism and has a broad discussion rooted in networking results in a mechanistic organisation’s structure. Given that centralization cold reduce creativity and innovation, Cook made some modification by decentralising decision making so as to promote interdepartmental communication and facilitate sharing of ideas. According to Bozkurt et al. (2014), structural complexity has an enormous effect on the role played by goals in the process of making strategic decisions. At Apple, there is a high complexity level that has led to varying goal orientations across the departments. There is some differentiation level existing in the organisation. With regard to formalisation, Bozkurt et al. (2014) posit that structural formalisation is typified by the existing procedures and rules, which have an effect on the behaviour associated with decision-making. At apple, formalisation is used to explain the level to which communications, procedures, rules, and instructions are noted down. Given that Apple applies a mechanistic structure; the company has a high formalisation level. Question 2 AT apple, the company uses the functional structure form the organisational structure since it is organised based on the functional line. Basically, people in the functional structure are grouped based on their resources, experience, as well as common expertise. In the organisation’s functional divisions, employees carry out a specific set of tasks, which normally leads to operational efficiency. The company follows this structure with the objective of encouraging the employees to contribute in the decision-making process effectively. Given that Apple has different functions such as retail, software and hardware, the company has pursued the divisional structure, whereby the products are segregated. The functional structure allows Apple to concentrate on improving the internal organisational efficiency, and to effectively identify the division/department that is earning high returns on investment or performing poorly. This structure, however, has some shortcomings; for instance, Apple normally experiences huge bureaucratic costs because of the extensive activities duplication in the organisation. Henry Mintzberg as cited by Lunenburg (2012) argued that the structure of the organisation crops up from the interplay of the structure itself, the strategy, and the environmental forces in the organisation. Fitting these factors together lead to improved performance but when they fail to fit, the organisation is inclined to face serious problems. Mintzberg emphasised that the organisational structures which can be acknowledged as successful include: the innovative, machine, entrepreneurial, divisional and professional organisations. According to Lunenburg (2012), technostructure is the key part of machine bureaucracy and utilises work processes standardisation as the way of coordinating. This structure utilises limited horizontal decentralisation, and it is similar to the mechanistic organisation. Apple can be described a machine organisation because it has a high level of work specialisation as well as formalisation. Lunenburg (2012) posits that operating core is the key part of the professional bureaucracy, and utilises skills standardisation as the main way of coordinating. The professional organisations use horizontal and vertical decentralisation, and although the organisation is formalised, it is decentralised with the objective of offering autonomy to the professionals. In this type of organisations, problems associated with coordination are very common. As an innovative company, Apple cannot depend on various types of coordination standardisation. During his tenure, Jobs considered adhocracy as the most appropriate structure for Apple and knowledge and skills of different types of professionals were highly developed through training programs. At Apple, collaboration is considered as an important part of its structure and was purposely designed with the objective of bringing parties and professionals together to facilitate the realisation of a common goal. As an innovative company, a collaborative culture has continually supported employees in their cooperative and individual work. As an innovative and collaborative organisation, employees at Apple normally work together with the objective of achieving the set goals. Question 3 Apple organisational structure can be considered to be strong because it has enabled the company to realise its strategic direction. Given that Apple focuses more on its Survival and long-term success, it can be argued that Apple goals are ends focused. The company’s organisational structure facilitates a strong control over various organisational processes. Given that the company uses hierarchy structure, this type of organisational structure has enabled Apple leaders such as Tim Cook to be able to control everything associated with the company. By means of hierarchy, product-based grouping as well as a function-based grouping in such structure, Apple is able to control all the organisational processes. According to Johnson et al. (2012), Apple organisational structure has played a crucial role in making the company one of the most successful in the world. There are 11 departments executives working directly under the firm’s CEO, Tim Cook. Furthermore, Cook has the power to control every department, headed by different Senior Vice Presidents. Apple structure approach, according to Johnson et al. (2012), is simplicity. The responsibility of the top executives to departments is clear-cut devoid of any matrix relationship. As mentioned by Tran and Tian (2013), an organisational structure that is well-designed leads to success and allows the company to realise its strategic goals. Without a doubt, all companies need a structure in order to become profitable and grow. Therefore, when Apple recently redesigned its organisational structure under Cook’s leadership, it has been able to become more innovative and identify talent crucial for the company growth. More importantly, Apple hierarchical structure fits the strategic goals and objectives of the company; therefore, it promotes cooperation and collaboration in completing leading to faster cycle times as well as efficient utilisation of resources. Tran and Tian (2013) maintains that organisational structure is the formal relationships and task system that motivates coordinates, and controls employees with the intention that they work together to realise the strategic goals of the organisation. At Apple, organisational structure has facilitated work competence, employee enthusiasm, and coordination between employees and top management. Question 4 Organisational effectiveness normally depicts the construct perception where the emphasis is on the concept definition based on conceptualization as well as assessment with the objective of determining dimensions and properties that the concept encompasses. According to Kumari (2011), Apple utilises the scorecard as the main tool for planning its long-term performance, rather than for driving operating changes. The company developed a balanced scorecard with the aim of focussing the top leadership on the strategy expanding discussions afar the market share, return on equity, and gross margin. Kumari (2011) posits that the company has instituted a small steering committee that focuses on the measurement categories in all the four perspectives as well as to choose numerous measurements all the categories. For instance, in the financial perspective and customer perspective, the company focuses on the shareholder value as well as customer satisfaction and market share, respectively. The company focus on core competencies and employee attitudes in the internal process perspective as well as innovation and improvement perspective, in that order. Customer satisfaction is considered as the most important category; according to Kumari (2011), Apple introduced customer satisfaction metrics with the purpose of orienting its workers toward becoming a company that is customer-driven. The company uses the balanced scorecard as a management system for facilitating breakthrough improvements in important areas like market, process, product, and customer development. As mentioned by Henri (2004), the balanced scorecard offers the managers four varying perspectives where they can select measures. The goal attainment model, as indicated by Henri (2004), depends on the organisation vision as the rational arrangements set oriented toward achieving the organisational goals. As mentioned earlier, Apple measures its effectiveness based on outcomes accomplishment; that is to say, the focus mainly on the ends rather than means: achieving targets, objectives, goals, and so forth. On the other hand, the system model does not neglect the significance of the ends, stresses the means required for achieving certain ends based on processes, inputs, and resources acquisition. Finally, the strategic-constituencies model adds the expectations of different influential interest groups gravitating around the company. For this reason, the organisation is considered as a set of external as well as internal constituencies which negotiate a multifaceted set of referents, goals and constraints. Question 5 Akin to other companies, Apple is experiencing structural problems, but the current structure helps the organisation to address such problems. For instance, the company has large bureaucratic costs because of the extensive activities duplication in the organisation. Although the organisational structure helps the company tackle problems in innovative and new ways, the functional structure hinders collaboration. Cook has tried to redeploy the roles of numerous senior executives with the objective of making collaboration easier at Apple. Besides that, the functional structure leaves no person in charge of the performance of the single product. Apple concentrates on the function rather than the product; the company needs to address such problems uniquely in order to stand the test of time. Some of the signs associated with Apple organisational structure include unequal workload and poor communication. Although Apple is quick to innovate, it still needs a new ideas pipeline and improved communication processes. To remain successful, Apple should ensure that there is no dissatisfaction amongst the employees and customers and ensure that the problems’ root causes are eliminated. Besides that, the organizational change could be a swiftly and radical alter in the manner in which Apple operates; it could be slow or incremental. Apple should make some changes by letting go its old ways of doing things and getting used to the new ways. Conclusion In conclusion, it has been established Apple success is attributed to main factors, which includes a strong organisational structure. The way the company was set up has directly influenced its success. The company has been organised and structured in a manner that allows for the realisation of customers’ needs and organisational goals. As mentioned in the essay, although the organisational structure concentrates on strategic organisational goals, it as well strategies and priorities can be reported to the top management. By analysing Apple organisational structure, the paper has demonstrated the cross-functional relationships between optimal results and coordinating work efforts. The strategy espoused by the company and the level to which it is used lead to numerous structural configurations: machine bureaucracy, adhocracy, simple structure, divisionalised form, as well as professional bureaucracy. It was established that solving problems associated with the organisational structure adopted can lead to continuous performance improvement of the organisation. The performance of the company can be improved by solving structure-related problems successfully, especially those causing dissatisfaction amongst the external or internal customers. References Bozkurt, Ö.Ç., Kalkan, A. & Arman, M., 2014. The Relationship between Structural Characteristics of Organization and Followed Business Strategy: An application in Denizli. Procedia - Social and Behavioral Sciences, vol. 150, pp.222 – 229. Dudovskiy, J., 2016. Apple Leadership and Apple Organizational Structure. [Online] Available at: HYPERLINK "http://research-methodology.net/apple-leadership-and-apple-organizational-structure/" http://research-methodology.net/apple-leadership-and-apple-organizational-structure/ [Accessed 10 March 2017]. Henri, J., 2004. Performance measurement and organizational effectiveness: bridging the gap. Managerial Finance, vol. 30, no. 6, pp.93 - 123. Johnson, K. et al., 2012. The Innovative Success that is Apple, Inc. Theses, Dissertations and Capstones, vol. 418, pp.1-42. Koufteros, X., Lu, X.(.P.G. & Peters, R., 2014. The Impact Of Organizational Structure On Internal And External Integration: An Empirical, Cross-Regional Assessment. Journal of Organization Design, vol. 3, no. 2, pp.1-17. Kumari, N., 2011. Balanced Scorecard for Superior Organizational Performance. European Journal of Business and Management, vol. 3, no. 5, pp.73-86. Lunenburg, F.C., 2012. Organizational Structure: Mintzberg’s Framework. International journal of scholarly academic intellectual diversity, vol. 14, no. 1, pp.1-8. Meyer, P., 2017. Apple Inc. Organizational Structure: Features, Pros & Cons. [Online] Available at: HYPERLINK "http://panmore.com/apple-inc-organizational-structure-features-pros-cons" http://panmore.com/apple-inc-organizational-structure-features-pros-cons [Accessed 10 March 2017]. Tran, Q. & Tian, Y., 2013. Organizational Structure: Influencing Factors and Impact on a Firm. American Journal of Industrial and Business Management, vol. 3, pp.229-36. Read More