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Apple Inc.'s Unique Organizational Structure

Apple adopted an adhocracy organizational structure in the 1970s that favored flat, informal structures over traditional tall hierarchies. This structure was well-suited to Apple's need for innovation in a dynamic technology industry. While unconventional, Apple's structure empowered employees and allowed for quick policy implementation and product innovation. However, it also lacked stability, as seen when Steve Jobs was dismissed - successors struggled until Jobs returned. Apple also uses functional structures where employees are grouped by expertise, which improves efficiency but can limit communication.

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269 views2 pages

Apple Inc.'s Unique Organizational Structure

Apple adopted an adhocracy organizational structure in the 1970s that favored flat, informal structures over traditional tall hierarchies. This structure was well-suited to Apple's need for innovation in a dynamic technology industry. While unconventional, Apple's structure empowered employees and allowed for quick policy implementation and product innovation. However, it also lacked stability, as seen when Steve Jobs was dismissed - successors struggled until Jobs returned. Apple also uses functional structures where employees are grouped by expertise, which improves efficiency but can limit communication.

Uploaded by

Uttam
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

APPLE’S ORGANISATIONAL STRUCTURES

In the 1970’s when apple inc. was formed, it drifted from the traditional corporate
structure that is been practiced in most companies at that time and continued in a
different and unique method of managing its organisation. The company operated
based on the concept of informal corporate culture within the technology industry
where it favoured a seemingly flat organisational ad hoc structure than the tall
structure.

Mintzberg (1983) suggests that administrative adhocracy occurs when an


organisation has a special need to be innovative, due to intense product competition
or dynamic technology. This is the case with Apple. They adopted adhocracy as it is
the only structure suited to solving complex problem and can match its sophisticated
innovative culture.

Apple’s corporate culture is a unique corporal style that is only suitable for Apple.
Measuring against the traditional classical organisational culture, it can be said that
Apple’s ad hoc approach is out of date. However, when measured against the post
classic, modern information generation as supported by Hewlett et al. (2009) it can
be argued that Apple is in line with today’s requirement for success.

In contrast to the tall hierarchical structure, a flat organizational structure is


characterized by relatively few layers or just one layer of management. As a result,
the chain of command from the top to the bottom staff is short.

The merit of this type of organisational structures is their effectiveness in terms of


innovation and empowerment (Fayol 1949). Policies are easier and quicker to
implement and there is increased coordination. This explains why Apple inc. is
famous for distinctive competence in product design and innovation.

However, a major drawback is that if there is a change in leadership or culture, they


may be faced with damaging repercussion as other aspect of the strategic structures
may not fit. This was the case when Jobs was dismissed and all other successors
struggled with the organisation until he was later reinstated.

The organisational structure in Apple is also a functional structure as the company is


organised along functional line (Torrington et al. 2005).

In functional structure, people are grouped on the basis of their common expertise,
experience and resources. Employees within the functional divisions of an
organisation perform a specialized set of tasks. This results in operational efficiency
within the group. However, it could also lead to lack of communication between the
groups in the organisation as is the case in Apple.
Mintzberg’s framework of organizational structures can be applied to Apple’s
company structure. This framework divides a business into six basic parts :

1. The strategic apex, or the key decision-makers

2. The middle line, or the middle managers

3. The operating core, or the operational processes

4. The techno structure, or the technical support and systems

5. Support staff, or the supplementary staff

Apple uses a company structure that is commonly known as “functional


organization”. This means that the company has been organized around areas of
expertise, rather than individual products. The products themselves are then
worked on by individuals from across the different areas of expertise.

Common questions

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The lack of communication between Apple's functional divisions might lead to inefficiencies and missed opportunities for synergy. It can cause divisions to become siloed, reducing collaborative innovation and potentially creating inconsistencies in product development and strategic alignment, undermining overall organizational performance .

A significant deviation from Apple's established adhocracy model could undermine its strategic objectives by reducing its responsiveness to market changes and innovation capacity, as the flat structure is integral to its strategic agility. A shift towards a more hierarchical structure might slow decision-making processes, affecting Apple's competitive edge in technology innovation .

Adhocracy emphasizes flexibility and quick adaptation, which fosters Apple's distinctive competence in product design and innovation by rewarding creative solutions and encouraging rapid development cycles. However, this same lack of structure can lead to challenges in maintaining consistent strategic direction and might create issues if leadership or corporate culture shifts .

Mintzberg’s framework identifies six parts of a business structure; Apple aligns with this framework through its strategic apex (key decision-makers), middle line (middle managers), operating core (operational processes), technostructure (technical support), and support staff (supplementary staff). Apple’s functional organization, focusing on areas of expertise rather than products, fits within Mintzberg’s conceptualization, ensuring operational efficiency and effectiveness .

Apple’s informal corporate culture, marked by a flat structure and adhocracy, benefits from increased flexibility, rapid decision-making, and innovation, suiting the dynamic technology market. In contrast, a classical organizational culture with a tall hierarchy might offer more control but at the expense of agility and creativity, slower to adapt to changes .

Apple's flat organizational structure facilitates quick policy implementation and coordination due to fewer management layers and a closer chain of command, allowing faster response to changes and innovation needs. However, this lack of formal structure may hinder extensive hierarchical oversight, potentially leading to inconsistencies if not effectively managed .

Apple runs the risk of operational disruption during leadership transitions due to its reliance on a flat organizational structure. This structure can make the organization vulnerable if there is a leadership change, as it may lead to misalignment between leadership and existing strategic structures. Such was the case when Steve Jobs was dismissed, and the company struggled with adapting to new leadership until his return .

Apple's use of adhocracy allows for greater innovation by promoting flexibility and quick decision-making, which are vital in a technology-driven industry. Traditional hierarchical structures, with their many layers of management, may stifle creativity and delay decision processes due to longer chains of command. Adhocracy, characterized by a flat organizational structure and reduced bureaucracy, facilitates rapid adaptation to market changes and intense product competition .

Apple’s functional organizational structure enhances operational effectiveness by allowing employees to specialize based on expertise, thereby improving efficiency within divisions. However, this structure can also impede communication between groups as each division focuses on its specific tasks, potentially leading to silos that detract from cohesive cross-departmental collaboration .

Apple’s adhocracy approach, while seemingly outdated against traditional metrics, aligns with modern information generation needs by providing flexibility, reduced hierarchy, and rapid innovation, crucial in the fast-evolving tech industry. This structure supports adaptability and empowers creative decision-making, fitting modern success criteria in dynamic technological environments .

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