The Uneasily Defined Organizational Structure of Apple
Organizational structures have been used for centuries to help people within organizations to understand who holds authoritative roles and how it is ordered, who has certain responsibilities and how they are organized and executed, and how communication flows between the tiers of management (“BusinessDictionary,” 2013). There are many types of organizational structures; the common ones are functional, divisional, and matrix organizational structures. Apple is a company in which the organizational structure is somewhat of a mystery; therefore, it is a very interesting organization to research.
It operates in its own kind of structure system that surprisingly allows it to be very successful. Apple looks at business very differently than other technology companies. They create innovative products and put them on the market rather than researching what the market needs and making products they think will be profitable. Because of their ability to create user-friendly products in simple and compact designs they have been quite successful with their product lines. One word to sum up Apple’s organizational structure would be simplicity. There are intentionally no committees within the walls of Apple.
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The late Steve Job was known for claiming that Apple is the greatest startup in the world. They have been successful by putting small teams together to complete projects. There are very few people working for Apple who need to fulfill multiple roles because of the way the company is structured. Employees with specialized training and skills are placed into teams to work on projects. Their focus and responsibilities are not stretched thin due to complicated management structures. When Steve Jobs was overlooking the company, he would meet weekly with the head operating officers and review what was happening in the company and in product lines.
Any information that he wanted to get out to employees would do so by trickling down throughout the company. It was rare that any employee would not have a clear understanding of what Job’s direction was going and what his objectives of any given week were. There was such a personal connection to the CEO that employees at all levels generally believed they were an instrumental and working part of the organization. Jobs wanted the very best person in each specific job; therefore, employees were held accountable for their own positions.
Lashinsky (2011) noted the odd culture and organizational structure of Apple: To Apple’s legion of admirers, the company is like a tech version of Wonka’s factory, an enigmatic but enchanted place that produces wonderful items they can’t get enough of. That characterization is true, but Apple also is a brutal and unforgiving place, where accountability is strictly enforced, decisions are swift, and communication is articulated clearly from the top. (para. 3) The organizational structure at Apple would make most people uneasy, yet surprisingly the employee turn-over is quite low.
Employees have a good understanding of what the company wants to achieve, believes in the products that they are creating, and wants the company to succeed. These beliefs have helped employees to meet the organizational goals of Apple, making it one of the most successful companies in the United States. Apple has a reputation for providing top-quality customer service. Employees are required to have a full understanding of Apple’s product lines and their capabilities so that they can at any time explain product details and giver proper advice to consumers.
Apple structures teams together to complete projects or fulfill particular duties for the company, so people may think that they are using some form of a matrix organizational structure. Surprisingly this is not so, and they also do not believe that a hierarchical structure is the best way to organize and manage their business. Rather so, each employee has particular expectations and the term “DRI” is Apple lingo often used, meaning “directly responsible individual. ” Employees names are attached to the projects that are reviewed by the VP’s who oversee the company. The accountability mindset extends down the ranks. At Apple there is never any confusion as to who is responsible for what” (Lashinsky, 2011, para. 10). Personal responsibility and accountability are held with high regard by Apple employees, helping the company output quality products and services due to the meticulous skill and care in which work is completed. “The result is a command-and-control structure where ideas are shared at the top — if not below” (Lashinsky, 2011, para. 11). Hewlett-Packard (HP) is the one of the top-grossing technology companies in the United States.
They use a functional organizational structure, which allows them to structure their business around product lines. According to “International Business Blog” (2010), “They have three technology areas: the personal systems group (PC’s), the imaging and printing group (inkjet, and printing), the enterprise business (storage and services, enterprise services and software)” (para. 1). Recently they revamped their organizational structure to promote growth and stay current in terms of how functions need to operate to maintain good business health.
Dell has a hierarchal organizational structure that has three levels: CEO (top), Departments/Managers (middle), and Lower-Level Empoyees (bottom). According to “Business Blog” (2009): Judging by how the subdivisions of the departments are created, Dell’s organizational structure is based on function rather than geography or product. This means that Dell’s departments and employees which does the same type of work (marketing, human resource, etc. ) are grouped together. (para. 3) The higher level personnel in the organizational structure are the decision-makers.
Departments are often specialized to complete certain tasks, so there is little confusion on who needs to do what. Dell is considered a “wide organization” because it only has three hierarchical levels; however, due to its use of departmentalization and specialization, it feels more like a “tall organization” which allows greater efficiency and manageability (“Business Blog,” 2009). Apple seems to run their business by product, using a conglomeration of team’s efforts to drive it toward completion. Higher level operations officers oversee all of the crucial projects and personnel are held to a high level of accountability.
It is certainly a different way of doing things; however, it seems to be working. The emphasis on Apple’s agenda, goals, and values helps the organization to run as a machine, with all parts working together to meet their strategic goals. Both the small and large functions of the machine that is Apple are considered valuable assets. Apple’s untraditional organizational structure has proven successful, has benefited the morale of the organization, and has helped it to thrive into one of the most exciting companies in the United States.
Business Blog. (2009). Retrieved from http://justinkmchan.blogspot.com/2009/11/dells- organizational-chart_09.html.
BusinessDictionary. (2013). Retrieved from http://www.businessdictionary.com/definition/ organizational-structure.html.
International Business Blog. (2010). Retrieved from http://tortora.wordpress.com/2010/04/07/ hps-organizational-structure/.
Lashinsky, A. (2011, August 25). How Apple works: Inside the world’s biggest startup. CNNMoney. Retrieved from http://tech.fortune.cnn.com/2011/08/25/how-apple-works- inside-the-worlds-biggest-startup/.