Organizational Structure of Apple: Factors, Characteristics, and Management

This study analyzes the factors influencing the organizational structure of Apple, the characteristics of divisional and functional matrix structures, and how Apple manages dynamic processes for growth and evaluation.

Organization Theory (case
study2)

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Factors influence organizational structure of apple.................................................................3
2. Characteristics of divisional and functional matrix structures of company.............................4
3. Apple manages dynamic process which shape growth and evaluation...................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................1

INTRODUCTION
Organizational theory is used for organization analysis. Organization consists of human
resource who are managed to achieve organizational goals and objectives. Apple is the
multinational company having its headquarters in California. Company deals in consumer
electronics, computer software and provide online services. Its product portfolio involve iPhones,
pads, iPods, mac etc. this study will discuss factors which influence company's organizational
structure. Further it will analyse features of functional and divisional structure of apple. The
report will also discuss steps that how apple manage dynamic process which shape the growth.
MAIN BODY
1. Factors influence organizational structure of apple.
There are many factors which influence the organizational structure of apple are:
hierarchical organizational structure:
By the CEO of apple many changes are applied in the organizational structure. But the structure
is still hierarchical in nature. The reason of hierarchical structure is the large number of
employees in the organization (Connolly and et.al., 2017). This structure brings many advantages
like senior people of the organization have high control over the business. Company gives
promotions to their workforce which is reason for employee motivation. Motivation encourage
employees to work hard and that will increase their productivity. Superiors also give authority
and responsibility to their subordinates. Employees are answerable for the decisions they had
taken. Along with positive side, the organizational structure have negative side as well.
Organization sometimes compromise on the flexibility of the workforce. In hierarchical
organizational structure communication does not follow proper in different departments as
compare to flat organization.
Product based grouping:
It is the main feature of organizational structure of company. This international company divides
its operations into the product based group. For different products there are vice presidents and
senior vice presidents. Senior vice president handles software and hardware engineering like
mac, iPhone, iPad, ios etc. the corporate structure of company manages products and its
components which company supply to the target customers (Kraśnicka, Głód and Wronka-
Pośpiech, 2018).
Collaboration of different groups and divisions:

Effective collaboration is maintained by apple with groups and divisions into the company.
Product portfolio of apple which include iPhone, iPad, iPod, mac etc. is due to the collaboration
of product groups. Board of directors of apple is strong with having effective leadership
background. Within the BOD three members are CEO and two of them are former chairman.
Company is facing many challenges regarding rapidly reducing technology products life cycle
and the sales of iPhones, iPads, mace etc are reducing. It can be said that organizational structure
of the company can face changes in the medium term. Matrix organizational structure and
divisional organizational structure elements can be integrated into the organizational structure so
that can upgrade new product development strategies.
Functionality:
Functionality is the another factor in apple's organizational structure. Functions include like
when senior vice president of company reporting CEO. This organizational structure is not
common in the company. This organizational structure allows company to ignore short term
financial targets as manufacturing new products require large investments. As the rewards of the
executives of company depend on company's financial performance and not from the particular
products revenue.
Technology:
technology which is used while manufacturing products also influence organizational structure.
When the products is mass like apple, organizational structure is appropriate because when the
production is mass technology comes with standardization (Carvalho and et.al., 2019). Adoption
of advance technology is important to beat the competitive market. Upgraded technology also
help in serving good quality of goods to the customer.
2. Characteristics of divisional and functional matrix structures of company.
Divisional matrix structure:
Divisional matrix structure is usually used by large companies which have many
objectives. The structure facilitates more autonomy (Common Organizational Structures., 2021).
Apple have different divisions which include transportation, renewable energy, digital etc. under
this structure, division operates as an independent company which have complete control on the
resources like much money have to be spent on every project or divisions. Geographically also
divisions can be formed. The structure with many divisions are often more flexible for large
companies. As the division operate as an independent company where less people are there to

report executive officer of company. In this it is not necessary to take all issues at top-level
because problems can be solved at divisional level. It have pros also as it affects communication
as this structure focus only on divisions. Because employees who are working same but at the
different divisions are not able to communicate properly. While doing accounting, the structure
raises issues and also have tax implications.
Under this structure good level of autonomy is received by each project. As every group have
director or president which make it flexible to obtain resources when needed. Senior person
knows project best so they can help and focus that proper attention is given to project (Cropley
and Cropley, 2017). Under employees will feel the importance of project because they will spend
more time in doing. The disadvantage is that every division has it own purpose and which is not
easy to be managed. It can say that for apple divisional structure can work best because of wide
product portfolio and also operate internationally. It also gives flexibility to the company.
Functional structure:
Functional structure is divided into functional areas like marketing, finance, human
resource, IT etc. in this organization is arranged in the form of structure which tells that how the
organization will be operating. In functional structure company is divided into small groups by
the filed of speciality like finance, operations, information technology, marketing etc. the
functional areas are not connected with each other. Many functional heads are present in the top
management of company like finance officer, marketing officer, operations officer. In every
department communication facilitate and if communication have to be transferred to other
department then this work is done by the head of every department (Odor, 2018).
Functional structure gets effective workforce because employees of same skills and knowledge
are put under one group and have to perform together. The specialists can work independently
and done cross communication with functional areas. This facilitates increment in the
specialization. It also results in lack of communication between different functional groups
which reduces creativity and flexibility. Innovation is required for success of company. Apple is
technology based company and require innovation timely because consumers are attracted to the
company only as it offers innovated products. The disadvantages of this structure is tried to
eliminate by using cross functional communication. They are also applicable for large companies
who manufacture homogeneous products. This structure gather all professionals into one single

team. Through the team information can be easily shared. This also comes with major
promotional benefits to the employees (Viardot, 2017).
3. Apple manages dynamic process which shape growth and evaluation.
Relationship between culture of organization and growth:
Organizational culture mean the environment in which the business is operating and have
impact on the organization growth and success. Organizational culture of apple is good that is
why it is resulting in successful company. The culture of the organization should be managed in
such a manner that vision, mission and objectives of organization should bring together and
communicate with the employees. Culture of company is helpful in influencing the behaviour of
employees. Good culture will create positive environment. Culture has influence in decision-
making and are often shared with the employees of the company.
Apple's culture mainly focus on innovation. Secrecy is another factor of company's culture.
Secrecy is the part of company so can eliminate theft of confidential information and intellectual
property (Coppin, 2017). It is also reason for company to gain the competitive advantages
because its secret information does not leak. Company have such rules, regulations and
employment contract which bound their workforce to keep the information secret. Effective
Organization culture facilitate growth if good working culture will be provided by the company
then employee will motivate and work hard. Hard work of employees resulted organizational
growth.
Relationship between leadership of organization and growth:
Leadership influence and modify the behaviour of complete group. Leaders are appointed
so that they can guide or manage complete group or team. Leadership is very important for the
growth of the organization. It contributes in effective management which helps in maximizing
profits and growth. Employees are responsible for organizational growth and leader help
employees by fulfilling their needs. Leaders have personal relations with the staff, and they fulfil
their requirement. Leaders also provide guidance to do the work to the subordinates. Leaders are
helpful in resolving conflicts as they listen to employees and try to solve their issues. They also
provide training to the workforce so that employees develop skills and knowledge which will be
helpful for them to do their job effectively.
They motivate employees by appreciating for good performance and also guide them where
improvement is needed. This is helpful in improvising employee morale (Velychko and

Velychko, 2018). Leaders are responsible for the success of the project because every successful
project will contribute into the growth. Apple evolve their leaders by providing them training
because along with employees leaders are also required training so that they can also learn new
skills.
Relationship between innovation of organization and growth:
For apple innovation is the biggest reason for growth. This is the aim of company to
maintain high level of creativity. Organizational culture of company support innovation.
Company also given the title of one of the most innovative company globally. Company
managers motivate their employees to innovate in respect of their work performance and should
contribute in the development of product. Fast innovation will result in producing new products
which will attract target audience. Innovation is helpful in increasing market share which will
increase growth of the company. Innovation also help in improvising reputation of the company
in the eyes of people.
Apple always favour creativity because the company knows that for survival in the long run
innovation is required. Company focus on the employees more who are involved in product
design and development. As product designing is the area where innovation is needed. Creativity
can be seen in apple product like its phones, iPads etc. innovation is the part of organizational
culture. Innovative products which is launched by the company facilitate growth and increase
market share (PUGH, CLARK and MALLORY). It also helps in taking competitive advantage.
Innovation by company also help their employees in their career development.
Strategies for mitigating problems of organizational structure:
If company apply functional organizational structure then should implement collaborative
working and effective communication. Effective communication is required for company's
success as barrier in communication will result in confusion and then can create further conflicts
in the organization. Sometimes divisional structure results in office politics, company should
take actions to mitigate this problem as office politics is harmful for workforce. Successful
organization are those organizations where employees support each other and does not do dirty
politics. To encourage and develop sense of dedication and respect for co-workers, company can
organize events or get together where employees take participation and know each other
(Decreton and et.al., 2017). Good relationship between employees will result in healthy working
environment.

CONCLUSION
Through this report it can be concluded that apple follow hierarchical organizational
structure. It has wide product portfolio and fast in adopting new technology. Report has analyzed
characteristic of functional and divisional structure. In functional structure, organization is
divided into departments which include marketing, finance etc. divisional means when
organization has different divisions, and they operate independently. Rport has discussed
relationship of growth with leadership, organizational culture and innovation. Innovation is the
key element and the key to success for company. Innovation is the reason that company has
achieved product differentiation.

REFERENCES
Books and journals
Carvalho, A.M. and et.al., 2019. Operational excellence, organisational culture and agility: the
missing link?. Total Quality Management & Business Excellence. 30(13-14). pp.1495-
1514.
Connolly, L.Y. and et.al., 2017. Organisational culture, procedural countermeasures, and
employee security behaviour. Information & Computer Security.
Coppin, A., 2017. Organisation Structure and Design. In The Human Capital Imperative (pp. 45-
49). Palgrave Macmillan, Cham.
Cropley, D. and Cropley, A., 2017. Innovation capacity, organisational culture and
gender. European Journal of Innovation Management.
Decreton, B. and et.al., 2017. Beyond simple configurations: the dual involvement of divisional
and corporate headquarters in subsidiary innovation activities in multibusiness
firms. Management International Review. 57(6). pp.855-878.
Kraśnicka, T., Głód, W. and Wronka-Pośpiech, M., 2018. Management innovation, pro-
innovation organisational culture and enterprise performance: testing the mediation
effect. Review of managerial science. 12(3). pp.737-769.
Odor, H.O., 2018. Organisational culture and dynamics. Global Journal of Management and
Business Research.
PUGH, D., CLARK, T.A.R. and MALLORY, G., Organization structure and structural change
in European manufacturing organisations.(1996). Organisational decision-making
under different economic and political conditions, pp.225-237.
Velychko, O. and Velychko, L., 2018. Matrix structures in management of quality of educational
and scientific work of Ukrainian universities. Problems and Perspectives in
Management. 16(1). pp.133-144.
Viardot, E., 2017. Selecting the Right Organization and Structure for Sustainability. In The
Timeless Principles of Successful Business Strategy (pp. 49-56). Springer, Berlin,
Heidelberg.
Online
Common Organizational Structures., 2021. [Online]. Available through:
<https://courses.lumenlearning.com/boundless-management/chapter/common-
organizational-structures/>
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