Apple Organizational Structure: a brief overview – Research-Methodology
Apple organizational structure can be described as hierarchical and functional. Such a structure has been developed by its founder and former CEO late Steve Jobs in order to ensure focused realization of his innovative ideas and clear vision for the business. Apple organizational structure has been subjected to certain modifications since the leadership role was assumed by Tim Cook on August 2011. Specifically, Mr. Cook embraced the decentralization of decision making to a certain extent in order to encourage innovation and creativity at various levels. Nevertheless the structure remains to be largely hierarchical.
Currently, Apple organizational structure has the format illustrated in figure below:
Apple Organizational Structure
Generally, Apple corporate structure has the following characteristics:
1. Hierarchical organizational structure. Although Tim Cook introduced considerable changes to Apple corporate structure since assuming the top job in 2011, the structure still remains to be highly hierarchical with many layers of management. Massive size of the company that comprises 132,000 full-time equivalent employees globally necessitates the adherence to the hierarchical organisational structure.
Advantages of Apple hierarchical organizational structure include tight control possessed by senior management over all aspects of the business. Moreover, promotion opportunities motivate employees to perform well and there are clear levels of authority and responsibility. On the negative side, Apple’s hierarchical organisational structure may compromise flexibly of the business to reflect changes in the global marketplace. Furthermore, in hierarchical organizations communication across different departments tends to be less effective than in flat organizations.
2. Product-based grouping. Product-based grouping is an important feature of Apple organizational structure. The multinational technology company divides its operations into the following product-based groups:
1. Services. This group includes App Store, ApplePay, iCloud, and Apple Music.
2. Mac
3. iPhone
4. iPad
5. Other products. These include Apple TV, iWatch, headphones, cases, displays, storage devices and various other connectivity and computing products and supplies
3. Collaboration between different groups and divisions. Apple Inc. maintains an intensive and effective collaboration between various groups and divisions of the company. Each product within Apple portfolio such as iPad, iPhone, iPad, Apple TV and iWatch is a result of collaboration of product-based groups.
Apple Inc. Board of Directors consists of eight members with a solid leadership background in a range of industries. Three members are acting CEOs and two members are former Chairman and CEOs of global companies. Moreover, proven leaders such as former US Vice President Albert Gore Jr., former CFO and Corporate President The Boeing Company James A. Bell and co-founder and Director of BlackRock Susan Wagner also serve in Apple Board of Directors.
Considering a number of challenges faced by the company such as rapidly decreasing life cycle of technology products and declining sales of iPhones, iPads and Mac products, [1] it can be argued that Apple organizational structure may be subjected to certain changes in the medium-term perspective. To be more specific, elements of matrix organizational structure and divisional organizational structure may be integrated into Apple Inc. organizational structure to a greater extent to increase the efficiency of new product development practices.
4. Functionality. Functionality is another important aspect of Apple’s structure. Although, product-based grouping is an important element of organizational structure as discussed above, senior vice presidents reporting to CEO are in charge of functions, not products. Functional organizational structure is not common for behemoths like Apple, however, the tech giant benefits from the current patterns of its corporate structure. Specifically, unlike many other large companies there is no fight between heads of product divisions at Apple for resources.
Moreover, functional organizational structure allows the tech giant to neglect short-term financial targets when developing new products that require considerable investments. Importantly, the bonuses of senior R&D executives are based on the financial performance of the whole company rather than revenue from particular products[2]. Therefore, executives at Apple are made to take a holistic approach to the business, similar to small entrepreneurial firms.
Apple Inc. Report contains the above analysis of Apple organizational structure. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S Model on APPLE. Moreover, the report contains analyses of Apple leadership, business strategy and organizational culture. The report also comprises discussions of Apple marketing strategy, ecosystem and addresses issues of corporate social responsibility.
[1] Annual Report (2020) Apple Inc.
[2] Podolny J.M. & Hansen, M.T. (2020) “How Apple Is Organized for Innovation” Harvard Business Review, Available at: https://hbr.org/2020/11/how-apple-is-organized-for-innovation
