UKAM4023 INTEGRATED CASE STUDY
UNIVERSITI TUNKU ABDUL RAHMAN
FACULTY OF ACCOUNTANCY AND MANAGEMENT
ACADEMIC YEAR 2023/2024
BACHELOR OF ACCOUNTING (HONOURS)
TUTORIAL QUESTIONS
TUTORIAL 6 – ORGANISATIONAL ENVIRONMENT PART 1
CASE: Apple (adapted from May 2021 Past Year Question)
Apple, incorporated in California, United States, is a company that designs, manufactures
and markets smartphones, personal computers, tablets, wearables and accessories, and
sells a variety of related services (Apple Inc., 2020). The co-founders of Apple, Steve Jobs
and Steve Wozniak began to produce computers since 1976 and named their first product
as Apple I. The original Macintosh was released in 1984 as the first mass-market personal
computer (PC) seeing the birth of “Mac” computers. Apple further develops its computer
through the introduction of iMac in 1998 (Gibbs, 2018). Now, Apple has a vast model of
computers from MacBook Air, MacBook Pro, iMac, Mac Pro, Mac mini (Apple Inc., 2021).
Rome was not built-in day, and so does Apple. The company’s success is contributed by
many factors including an organisational structure that has helped it to construct the
groundwork for an effective system. A good structure is vital as it creates opportunities for
enhancing growth and development in the company. Apple’s structure encourages rapid
innovation and technological advances. They adopted a traditional structure and included
some significant elements from various other types of organisational structures.
In the times of Steve Jobs, Apple adopted an autocratic practice where the leader was
entrusted with micro-managing every operation. Under the new leadership of Tim Cook, the
company has made some small changes in its organizational structure to meet the changing
demands of industry and the global market. It has started with a bit of a collaborative
approach and is prepared to decentralise on specific issues (Bhasin, 2020).
Apple structure has few layers of management. It is a large-sized company with an
innumerable workforce that works in tandem under one head, its CEO. The upper tier of the
structure has function-based grouping. Senior vice presidents who report to Tim Cook
handle business functions. For example, Apple has a senior vice president (VPs) for retail,
and a senior vice president for worldwide marketing. In this structural feature, the company’s
top leaders address business needs in terms of business function areas (Meyer, 2019).
On top of that, with the changes made by Tim Cook, it gives credibility to effective and
intensive collaboration between various divisions and groups in its organisation. Most of its
products are the result of its product-based group strategy. This aspect of the corporate
structure is used to manage specific products or product components that the company
delivers to its target customers. In ensuring the collaborative interactions among various
components of the company, Apple also implements a grid reporting relationship. However,
the system is mainly controlled by the VPs as the responsibility of the top management to
determine the direction the project is going to take and provides limited authority and control
to project heads (Bhasin, 2020).
UKAM4023 INTEGRATED CASE STUDY
TUTORIAL 6 – ORGANISATIONAL ENVIRONMENT PART 1
JUNE 2023
Case (Continued)
Unfortunately, the sky isn’t always blue, the sun doesn’t always shine. Despite all the
success Apple has gain in the IT industry along with careful planning of structure in the
company, Apple has been dealing with various risk. The business, financial condition and
operating results of the company can be affected by a number of factors including the
uncertainties of the macro environment from any of the political, economic, natural,
sociodemographic or technological contexts in which the organisation operates (Lockamy,
2017).
As we all are aware, the COVID-19 has spread rapidly throughout the world, prompting
governments and businesses to take unprecedented measures in response. Such measures
have included restrictions on travel and business operations, temporary closures of
businesses, and quarantines and shelter-in-place orders. The COVID-19 pandemic has
significantly curtailed global economic activity and caused significant volatility and disruption
in global financial markets (Apple Inc., 2020).
The pandemic has caused changes in the work environment in Apple. Employees in Apple
are formally requesting that Apple considers remote and location-flexible work as they are
requesting insight into the environmental impact of returning to onsite in-person work, and
how permanent remote-and-location-flexibility could offset that impact. (Schiffer, 2021).
Workers in Apple factories are also facing risks from adverse working conditions leading to
poor protection to the Covid virus due to lack of protective equipment, lack of social
distancing measure as well as continuation of production despite government request to stop
production to slow spread of virus (Weber, 2020).
Issues with employees is not something new in Apple. For about a decade, Apple have been
dealing with several ethical issues due to reports made on poor working conditions in Apple.
Claimed to be practicing the sweatshop working conditions in which labours are employed at
low wages and under unhealthy or oppressive conditions (Britannica, n.d.), these companies
were seen to have violated labour laws.
The sweatshop condition in Apple were reported in the factory that manufactures Apple
products, in which it employs 200,000 workers who live in dormitories where visitors are not
permitted and workers toil for 15-hour days for as little as $50 per month (Musgrove, 2006).
This issue further continues with several suicide cases reported in the Apple factory in
Foxconn since the case resurfaced (Johnson, 2011). News have shown exhausted workers
falling asleep on their long shifts with one undercover reporter having to work 18 days in a
row despite requesting for day off (Bilton, 2014).
Since the iPhone is such a compact, complex machine, putting one together correctly
requires sprawling assembly lines of hundreds of people who build, inspect, test and
package each device. One worker said 1,700 iPhones passed through her hands every day;
she was in charge of wiping a special polish on the display. That works out at about three
screens a minute for 12 hours a day. More meticulous work, like fastening chip boards and
assembling back covers, was slower; these workers have a-minute-a-piece for each iPhone.
That’s still 600 to 700 iPhones a day. Failing to meet a quota or making a mistake can draw
public condemnation from superiors. Workers are often expected to stay silent and may
draw reprimands from their bosses for asking to use the restroom (Merchant, 2017).
UKAM4023 INTEGRATED CASE STUDY
TUTORIAL 6 – ORGANISATIONAL ENVIRONMENT PART 1
JUNE 2023
Case (Continued)
Foxconn have put more focus on efficiency and discipline, which is not wrong, but may have
overlooked employees’ feelings as human beings. The environment in those factories do
have a high turnover rate, but number of available workers are also high. The requirements
to be a Foxconn worker are minimal as reported by a recruiter lingering outside the Taiyuan
facility’s gates to coax passers-by and people alighting at the bus stop to sign up for
employment. The minimum age requirement is 16, good health and some secondary school
education (Bloomberg, 2012).
Furthermore, Foxconn CEO, Terry Gou believes in these words - “Obey, obey, and
absolutely obey!”. He feels that “Leadership is about being decisive. Leadership is a
righteous dictatorship. Leadership is a battle between experimenting and practicality”. The
leadership environment in Foxconn factories showed senior leaders formulating the
corporate development strategy and set annual revenue and profit goals. Middle
management devises implementation plans and delegates responsibility. Production workers
are subjected to supervision to complete the assigned work. Within the workshop, production
operators and student interns face multiple layers of management from assistant line
leaders, line leaders, team leaders, and supervisors. Foxconn forges a semi-militarized
labour system, requiring absolute obedience from top to bottom of the chain of command
(Pun et al., 2016).
Despite all the reports, recent findings on working conditions at Foxconn highlights several
issues which are in violation of Apple’s own code of conduct. “Apple has the responsibility
and capacity to make fundamental improvements to the working conditions along its supply
chain, however, Apple is now transferring costs from the trade war through their suppliers to
workers and profiting from the exploitation of Chinese workers (Choudhury, 2019).
Required:
Not limited to the information above,
(a) (i) Identify, explain and evaluate the organisational structures that Apple employs.
(ii) Propose if there is any alternative structure that you think best fit Apple.
(b) (i) Based on the relevant model, appraise the leadership style of the Apple facilities
in Foxconn.
(ii) The leadership style implemented in Foxconn is influenced by the assumptions
made on the employees. Discuss.
Note: Your answers should not be limited to only the information above.