Apple Inc is an American based multinational company that is involved in developing and selling computer software, electronics and online services. The Corporation was founded in 1976 by Steve Jobs, Ronald Wayne and Steve Wozniak with the main objective of developing and selling personal computers. This focus shifted in 2007, where there was an adjustment towards development of consumer electronics (Lashinsky, 2014). The company has been operational for 40 years, and it has experienced ups and downs during this period. Much of the success started to be actualized after the company shifted its focus in 2007.
Apple Inc is the second largest cell phone manufacturer and the largest information technology corporation in the world. At the beginning of 2016, the company had a total of 478 retail stores distributed in seventeen countries (Shonk, 2016).
The company’s mission aims at ensuring that consumers are accorded the best experience by provision of easy-to-use software, innovative hardware and sleek product design. The company is driven by various goals and objectives. Among them is bringing the ultimate user experience to all consumers through its technologies and innovative products. Apple Inc also aims at increasing sales volume by launching new products, opening more stores, using smart market tactics and streamlining production (Jargosch & Jurich, 2014). There is also the objective of ensuring they avail high quality services to consumers at all times.
Apple’s primary stakeholders include consumers, investors, communities, competitors and employees. All the stakeholders are treated in the best way possible since they are responsible for the growth and success of the organization in one way or another. Based on the industry of operation, Apple has several competitors. Under the software segment there is Android, Windows and Blackberry. In terms of laptops there is Dell, Sony, HP, Asus, Acer and Toshiba. With regards to smart phones, Samsung seems to be the major competitor. This is just to mention a few of the competitors since there are several. The technological industry is quite dynamic in a way that even startups can mount due pressure to already established companies.
Over the years, Apple has established various resources that have made it possible for its success. Among the tangible resources there is tailored software and hardware system, massive technical patents, well-fortified and global supply chain (Lashinsky, 2014). Intangible resources include Steve job’s vision, competent software development team, industrial design capability and favorable relationships with original equipment manufacturers.
Apple Inc’s organizational structure has been among the factors contributing to the company’s successful innovations. A structure in any organization has the ability to create opportunities to enhance growth as well as act as a stumbling block depending on how it augments with the available resources.
During the Steve Jobs era, the company was known to exert an autocratic leadership style. Steve Jobs was known to micro-manage several business operations that were taking place in the company, where almost everything had to flow through him (Jargosch & Jurich, 2014). Under the current CEO (Tim Cook), the company seems to have adopted a more collaborative approach. Among the notable aspects that have been initiated by Tim Cook is embracing decentralization with regards to decision making. This move was taken with the objective of encouraging creativity and innovation at different levels.
The structure used at Apple Inc has been effective in supporting performance to ensure leadership within the industry.
Features of Apple Inc’s Organizational Structure
The company’s organizational structure has several characteristics. Apple’s significant characteristics can be deduced as:
Function-based grouping is observed at the upper tier of the organizational structure. Every vice president that is mandated to report to Tim Cook is allocated a specific business function. A good example is where there is an SVP for marketing, an SVP for industrial design and an SVP for retail. The top leaders in the company tend to address the company’s needs with regards to function areas (Jargosch & Jurich, 2014).
Spoke and Wheel Hierarchy
Since its inception, the organization structure of the company shows elements of a hierarchy. Initially, every decision had to go through Steve Jobs. However, the hierarchical structure has changed a little since Tim Cook became the CEO. Collaboration of different departments has improved thus far. The vice presidents have more autonomy and this is helping in terms of innovation and creativity.
This characteristic is more prevalent for the lower tier organizational structure. Senior vice presidents have other vice presidents below them, who are responsible for various products or outputs. An example is where the company has a vice president for consumer products, a VP for iOS apps and another VP for iPad. This form of organizational structure makes it possible to address specific issues arising from a certain product (Lashinsky, 2014).
The organizational structure present at Apple Inc has its advantages and disadvantages. The major advantage of the structure is that it accords the company a strong control due to the hierarchy established. This gives the CEO autonomous power to control the important aspects of the organization. Senior vice presidents are also accorded the opportunity of showcasing their leadership prowess. Despite the structure having advantages, it also has its downside. Apple’s structure tends to have a limited flexibility. Establishment of a hierarchy makes it difficult for lower levels to respond effectively to market demands and business needs. Despite the improvements that Tim Cook has brought in to enhance collaboration, the company’s structure does not support rapid changes since everything has to go through the senior VPs and the CEO.
Power and Influence
Just like any other organization, politics play a major role in the operations of Apple. There are people that are deemed to have more power and influence compared to others. In Apple, the hierarchical organizational structure that has come to be popular has played a major role in determining the influential figures in the organization. Currently, Tim Cook is the most powerful and influential figure in the organization. Being the CEO, he has control over most of the activities taking place in the organization. Major decisions must pass through him before any further step is undertaken. The vice presidents that operate below him are also influential since they are responsible for large segments of their designated areas. The form of power exhibited by the company’s top-level hierarchy is referred to as legitimate power. This is power that emanates from the position or role that an individual plays in a given organization. Top-level officials have the ability to assign projects, fire the people below them, accord promotions among other many things. This makes them influential since everyone wants to be on their good side (Lazonick et al., 2013). When Tim Cook sets deadlines for certain projects, employees will comply regardless of whether they think the deadlines are overly ambitious.
Apple is a divided mix of typical corporate politics and red tape. Gupta & Prinzinger (2013) assert that when the top level officials at Apple want something done, it is usually done faster than you would think it is humanly possible. This is something that has been there since the Steve Jobs’ era. This means that the best way to get cross-departmental work completed is to say that it belongs to Tim Cook and it will be done within the same day. This demonstrates an environment where a charismatic leader would play a great role.
Stakeholders Expression of their Preferences
Apple’s main stakeholders include consumers, shareholders, communities, competitors and employees. All these stakeholders have different ways of expressing their opinions and preferences so that they can get involved in the organization’s decisions. For the shareholders, they normally use the Annual General Meeting to pass across some issues that they think should be instituted or changed. Every shareholder’s voting rights act as an opportunity for them to be involved in the company’s decision-making (Lazonick et al., 2013). They have the right to vote for the direction that they think is best for the organization.
Consumers on the other hand, express their preferences by showcasing their tastes to the organization. This is usually identified when the company is conducting its market research through the many strategies that they have devised. Consumers’ feedback and response to existing products also provides them with an opportunity to influence the decisions of the organization. It is the firm’s responsibility to customize its products and services to suit the needs of the consumers so that it can remain as a going concern for a long period.
Suppliers and employees also have their way of ensuring that they are involved in issues revolving around the organization. There have been several lawsuits filed by employees and suppliers against Apple over the years. A good example is the class action lawsuit filed by dealers and consumers in 2005. The lawsuit accused Apple of refurbishing products and selling them as new items. There is another example of a lawsuit filed by an employee, which claimed that Apple store employees were not paid for time that was spent by the managers checking their bags. The employees viewed the checking of bags as “both insulting and demeaning to Apple employees”(Goldman, 2015). Such lawsuits normally have the ability of influencing the decisions that the organization makes.
Since his rise to the position of the CEO, Tim Cook has been working towards enhancing the concept of collaboration within the organization. This has been viewed as an appropriate way of solving the departmental conflicts that normally arise in the organization. Tim Cook favors this approach since it showcases a win-win philosophy. The desires of both parties are satisfied since after resolution each side gains something of value.
Apple has also become fond of using the media as an avenue of solving conflicts. In 2013, Tim Cook took the initiative to apologize to the Chinese consumers for the company’s warranty policy and promised that amends would be made (Shonk, 2016). This was an unusual move by the company. This had come about when television networks started to criticize Apple for providing iPhone users a one-year warranty, which is less than the years required by the Chinese law.
Apple’s organizational culture has played a major role in its success over the years it has been in operation. Through the corporate’s culture, it has been easier to adapt to new strategies, changes and new policies. It is a culture that gives innovation a high regard. This is the reason why the company has been able to provide quality products such as Apple Watch, iPhone and iPad. Despite the advantages that the corporate culture brings, it is also responsible for some of the challenges faced by the organization. This is why the company has been fine-tuning its culture so that it can match the dynamics of the business environment (Lazonick et al., 2013).
The organizational culture at Apple has been vital in supporting the organization’s leadership endeavors. Among the main characteristics of the organization’s culture are:
Apple recruits its employees on the merit of their creative abilities, knowledge and skills. There is a great emphasis on creativity among all the employees. This is more important for employees that are involved with product development and design processes (Gupta & Prinzinger, 2013). This culture has enabled Apple to gain the ability of developing solutions for consumer and business needs.
The culture of secrecy in the organization was instituted by Steve Jobs. This action was adopted to protect the company from the theft of intellectual property and proprietary information. Every employ is required to agree to this culture upon being recruited in the organization. There are clauses in their contracts that specifically highlight on this action. The company is assured of protection from the negative effects of employees poaching and corporate espionage (Jargosch & Jurich, 2014).
The company’s culture is highly innovative. It is recognized among the most innovative companies around the globe. There is training of employees that ensures they are instilled with this work ethic. Employees are encouraged to be innovative by contributing ideas to the company’s development processes.
The company’s culture revolves around recruiting the best employees. Steve Jobs was feared during his era. This is because he would fire employees that he did not think met his expectations. This is something that Tim Cook has carried forward since he became the CEO.
Apple has benefited from the organizational culture at play. The combination of creativity, innovation and excellence supports the organization’s industry leadership. These characteristics are empowering and they have been critical for the company in staying ahead of its competitors. It is not many companies that can come out and claim that their corporate culture has been among the key factors in creating a competitive advantage. However, there are also weaknesses attached to this culture. Emphasis on secrecy tends to limit rapport among employees. This means that the culture has room for improvement in order to strengthen the company’s human resource capabilities (Jargosch & Jurich, 2014).
Conclusion and Recommendation
Apple has been a successful organization over the years. Several aspects have been at the center stage of this success. This ranges from the organization’s structure, politics and culture. The company’s structure has played a role in providing opportunities for growth. The hierarchical structure ensures that everyone is responsible for their actions. This makes it easier to identify the source of a problem if there is any. Politics on their part help in keeping every stakeholder in check. Everyone acts as a watchdog to the other person hence the propensity to act inappropriately is reduced. The corporate culture on the other hand helps to instill the desired ideals among the relevant stakeholders. When everyone is in line with what is expected, the probability of success is quite high. Apple’s organizational culture has set-up a favorable blueprint for actualization of the desired goals.
Despite the success that the organization has actualized, there are certain things that can be adjusted so that the company can remain competitive while moving forward. The hierarchical structure being used in the organization should be adjusted in a manner that it accommodates flexibility. A hierarchical structure normally makes it difficult for the junior employees to operate promptly. The essence of collaboration is reduced to a great extent. This is not a pleasant thing for a company like Apple, which relies on innovation and excellence in order to move ahead of its competition. The structure also makes it difficult for rapid changes that might be necessitated by the market due to the bureaucracy involved. Creating an environment that ensures collaboration would suit the company well. Aspects of innovation and creativity will be high.
Goldman, D. (2015). Apple Store employees tell Tim Cook: We’re treated like ‘criminals’ Retrieved August 25, 2016, from http://money.cnn.com/2015/06/11/technology/apple-store-lawsuit-tim-cook/
Gupta, A., & Prinzinger, J. (2013). Apple, Inc.: Where Is It Going From Here? Journal of Business Case Studies (JBCS) JBCS, 9(3), 215.
Jargosch, R., & Jurich, J. (2014). Apple Inc Patent Landscape Analysis – January 1, 1994 to December 31, 2013. Pensacola: IPGenix LLC.
Lashinsky, A. (2014). Inside Apple: How America’s Most Admired-And Secretive-Company Really Works. Business Plus.
Lazonick, W., Mazzucato, M., & Tulum, O. (2013). Apple’s Changing Business Model: What Should the World’s Richest Company Do with All Those Profits? SSRN Electronic Journal SSRN Journal, 38.
Shonk, K. (2016). Conflict Negotiation Strategies: Apple’s Apology in China – PON – Program on Negotiation at Harvard Law School. Retrieved August 25, 2016, from http://www.pon.harvard.edu/daily/dispute-resolution/dispute-resolution-in-china-apple-apologizes-for-warranty-policies/
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