- Category: Business
- Topic: Corporations , Entrepreneurship , Management
Apple Inc. has a well-defined hierarchical organizational structure that incorporates divisions and a weak functional matrix. With a traditional hierarchy in place, the divisional structures represent product-based groupings, while the weak matrix covers inter-divisional coordination. In 2011, Apple’s leadership, under Tim Cook, brought about modifications to the organizational structure, introducing decentralization in the decision-making process to promote innovation at all levels.
The Speak and Wheel Hierarchy, one of Apple’s unique features, fosters cooperation among teams, with vice presidents enjoying considerable independence to make decisions. The function-based class is at the core of the hierarchy, managed by a senior vice president who reports to higher authorities.
Under the product-based divisional structure, vice presidents and presidents are entrusted with the responsibility of managing different products efficiently, catering to the specific needs of the target audience.
The weak functional matrix represents a partnership between various departments of Apple Inc., where the higher authorities decide on the exact project path, and project heads have limited power, requiring them to inform authority periodically.
Both the hierarchy and the divisional structure allow Apple to focus on long-term innovation, enabling the company to invest significantly in new product lines, disregarding short-term financial targets. Furthermore, R&D executive bonuses are based on the company's overall performance, rather than individual products.
Apple's organizational structure plays a crucial role in the continuous innovation of its hardware, software, and products. Despite its substantial size and complexity, which has increased over 40 times since 1998, Apple retains its remarkable success. Tim Cook, as the CEO, oversees operations, design, and product marketing. The company lacks any conventional general manager, as the people controlling every process from product development to sales are business unit leaders.
With a functional-to-multi-divisional shift, the organizational theory enables entrepreneurs to manage larger and more complex firms, aligning controllability and responsibility to ease decision-making and prevent congestion. This structure enables business unit leaders to exercise full control over critical functions, maximizing customer satisfaction, and results, while executives overseeing the organization can execute performance targets.
Apple's primary objective has always been to create products that add value to people’s daily lives. This entails not only producing new products but also consistently innovating within existing product categories. Apple's unwavering commitment to innovation is reflected not only in the creation of new products but also in striving to make current products better, with Apple's camera quality exemplifying this core value.