Organizational Structure of Apple, Inc. Compare/Contrast with Common Business Practices

1043 words | 4 page(s)

Organizational culture is crucial for any company’s ultimate success. Even though every company has it’s own way of conducting business, all companies must take into account the cultural aspect of the business in order to remain successful. Therefore, this paper aims to discuss the predominant cultural values found within the Apple Inc. Company and whether or not they are successful in comparison with common business practices.

The success of multinational companies such as Apple Inc. relies on many different aspects, but especially a strong cultural framework. According to Baah, “organizations engaged in cross-border mergers and acquisitions need to take into careful considerations cultural issues if they are to be successful” (Baah, 2013). Apple Inc. has made great efforts to participate in various collaborations both domestically and globally. This is mainly because Apple Inc. is a matrixed organization in which “employees operate with less direct supervision from functional leaders” (Lash, 2012.). Apple Inc has no “product business ownership” such as “head of device” or “head of iPhone” (Dediu, 2013). In contrast to many other brands-focused multinational companies, Apple Inc. hasn’t had a leader for the Branch management division since the death of Steve Jobs, the last Apple Inc. CEO (Dediu, 2013).

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While Apple hasn’t always been the company with the best technology, where Apple succeeds in is their great collaborative practices, which have led to the success of products such as the Apple iPod music player. UC Berkeley professor Morten Hansen “notes that it took Apple just eight months starting from scratch to collaborate across its organization and find a way to create the iPod [while] Sony spent three years engaged in internal infighting before launching a competing MP3 player that had little success” ( Lash, 2012). This type of endurance is what the CEO of Apple, Tim Cook, is known for among his employees. According to anonymous Apple employees, Tim Cook highly values endurance (Epstein, 2014). Cook also doesn’t believe in “small talk” and encourages “purposeful communication in small bite-sized pieces” (Epstein, 2014). As a leader, Cook employs Hoftstede’s “Power Distance” dimension, which is decentralized and encourages interactions.

Apple employs a “small power distance culture” even though it is a big organization. According to Hofstede, “low power distance societies [have] a lack of hierarchical authority, [are] less centrali[zed], which tend[s] to promote employee interaction, lateral communication, and less emphasis on the rules” (Baah, 2013). This was shown through Cook’s interactions with employees and a lack of hierarchical authority (no “heads” of the Apple products). In the multinational realm, Apple was shown to have employed a balance of risk and reward. According to the 2013 Testimony of Apple Inc , “ Apple’s initial cost sharing agreement was executed in December 1980 when the Company selected Ireland as its principal base of operations for distributing products and servicing customers in western Europe [which] afforded Apple the means to share the costs and risks of that market expansion with its Irish subsidiaries” (Apple, 2013). Similar to Lewis’s account of the KONE and Toshiba merger where KONE “granted a license to Toshiba to manufacture machine-roomless elevators,” Apple’s Irish subsidiaries were also granted a license (Lewis 2006 ). Both multinational companies were able to share in the profits and gained more customers through working together.

Not only has Apple succeeded domestically in its ability to innovate in a fast paced environment with its great use of collaborative networks, it has been able to succeed globally because of great collaborations. According to the New York Times, Apple Inc. has “3 subsidiaries [that] are incorporated in Ireland, and offshore subsidiaries in Ireland, Singapore, France” among many others (Anonymous 2013). Due to Apple’s unparalleled way of cooperating with subsidiaries in a culturally adept way, they have continued to achieve success. The only aspect they could benefit from adding would be a Brand Management leader so that they could have one person to solely focus on the brand. In addition to Apple using effective cooperative and communication methods, in March 2015 Apple’s human resources chief Denise Young smith said “the company is partnering with several non-profit organizations on a multi-year, multi-million-dollar effort to increase the pipeline of women, minorities, and veterans in the technology industry-and, of course, at Apple” (Ram, 2015). This shows how important the cultural aspect is to Apple, Inc.

Even though Apple Inc. has great organizational aspects, the company isn’t perfect and has had accounts of employee maltreatment in Apple’s China headquarters in 2012. However, because Apple understands the importance of culture, Apple responded with promising “corrective action including the training of the China partner in human resource management” (Sethi, 2012). This is exactly what Lewis would’ve suggested Apple to do to correct the problem, which shows that Apple Inc. is a company that is well-suited for the future. Lewis summarizes it best: “Successfully integrated international teams that react nimbly when cultures collide will gain strength from their diversity as globalization roars ahead. They represent a formula that once firmly established is unlikely to be reversed. They are here to stay- and to revolutionize international business.”

    References
  • Encyclopedia of Business (2015). Reference for Business. 2nd ed. Organizatoinal Behavior. Retrieved from http://www.referenceforbusiness.com/encyclopedia/Oli-Per/Organizational-Behavior.html
  • Horace, Dediu (2013). Understanding Apple’s Organizational Structure. Retrieved from http://www.asymco.com/2013/07/03/understanding-apples-organizational-structure/
  • New York Times (2013). Apple’s International Structure. Retrieved from http://www.nytimes.com/interactive/2013/05/21/business/apples-international-structure.html?ref=business
  • Sethi, Prakash S. (2012). Two Faces of Apple. Retrieved from http://www.carnegiecouncil.org/publications/ethics_online/0068.html
  • Lash, Rick (2012). The Collaboration Imperative. Retrieved from http://iveybusinessjournal.com/publication/the-collaboration-imperative/
  • Ram, Michal Lev (2015). Apple commits more than $50 million to diversity efforts. Retrieved from http://fortune.com/2015/03/10/apple-50-million-diversity/
  • Epstein, Zach (2014). Anonymous Apple employees reveal what it’s like to work for Tim Cook. Retrieved from http://bgr.com/2014/10/30/what-its-like-to-work-at-apple-tim-cook/
  • Testimony of Apple Inc. Before the Permananent Subcommittee on investigations.(2013). US Senate. Retrieved from https://www.apple.com/pr/pdf/Apple_Testimony_to_PSI.pdf
  • Baah, Kwasi Dartey (2013). The Cultural Approach to the Management of the International Human Resource: An Analysis of Hoftstede’s Cultural Dimensions. International Journal of Business Administration. Vol. 4. No. 4. Retrieved from http://sciedu.ca/journal/index.php/ijba/article/viewFile/2581/1447
  • Lewis, Richard D (2006). When Cultures Collide: Leading Across Cultures 3rd edition. Retrieved from http://wh.agh.edu.pl/other/materialy/672_2014_05_05_12_05_16_When-Cultures-Collide-libre.pdf

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