Part A: Introduction to the Organization and the Organizational Design
Apple Inc. is an American multinational electronics and software company established by Steven Jobs and Stephen Wozniak on April 1, 1976, in Cupertino, California. Apple designs, manufactures and markets personal computers, portable media players, mobile phones, computer software, computer hardware and peripherals. The Apple Store, which is a retail store owned and operated by Apple Inc., has opened 283 stores as of December 2009, which are located in 10 countries. The company's products are also sold worldwide through its online stores, its direct sales force, and third-party wholesalers, resellers, and value-added resellers. Music, audio books, iPod games, music videos, episodes of television programs, and movies can be downloaded off the iTunes Store on Mac or Windows computers, and on the iPod Touch and iPhone. Apple's most popular products include their line of Macintosh personal computers, iPod portable media players, and the iPhone.
Apple Inc. sells its products to individual consumers, small and mid-sized businesses, educators and consumers in enterprise, government, creative, information technology and scientific markets. The company's total net sales was $36 537 million and they employed approximately 34 300 full-time equivalent employees and 2500 full-time equivalent temporary employees and contractors as of the end of their fiscal year on September 26, 2009.
Apple manages and organizes its business based on a geographical structure, which is one of the divisional structures. The divisional structure is a traditional organization structure which group together people who work on the same product or process, serve similar customers, and/or are located in the same geographical region. In regards to Apple, their geographical structure group together jobs and activities being performed in the same geographical region. The company has created operating segments based on the location and nature of customers. The operating segments are the Americas, Europe, Japan, Asia-Pacific, Retail and FileMaker operations. The Americas, Europe, Japan and Retail operations are Apple's reportable operating segments. The Americas, Europe, Japan and Asia Pacific segments do not include activities associated with the Retail segment. Asia Pacific includes Australia and Asia, excluding Japan. The Americas segment encompasses North and South America. European countries, the Middle East, and Africa are part of the Europe segment. Regarding the company's retail segment, these are the retail stores operating in the U.S. and international markets. Similar hardware and software products and services are provided to the same types of customers by each reportable operating segment.
Apple Inc. is such a large corporation that it has all levels of management from upper to lower. The organization has all types of managers including line managers whose work directly contributes to the production of apples goods and services. They also have staff managers who use their special technical expertise to support line workers (marketing, accounting, human resources, and legal services). As shown in the diagram below of how Apple's top managers are organized, the company has both functional managers, who are responsible for one area of activity, and general managers, who are responsible for complex areas.
This design is appropriate for the organization because their process of creating this geographical structure has appeared to benefit them from their results, which included a 36% gross margin in 2009, and helped them accomplish their mission and objectives. It allows their expertise to be focused on specific customers, products, and regions, which all have unique cultures and different requirements.
Steve Jobs the CEO and Co-Founder of Apple Inc. is known for having a temperamental management style. He has gone against the traditional management style, being strict with employees causing some fear but also praising them. Jobs is a perfectionist who pays close attention to detail, which can drive some of his subordinates crazy from his constant demands. He has a �no compromise" attitude when developing products for Apple. He creates many prototypes and mock-ups which are constantly being edited and revised by being passed back and forth between designers, engineers, programmers, and managers, and then back again. His obsession with excellence has created an amazing development process which turns out great products.
Based on Steve Jobs's management style I believe he is not following a traditional approach to management. He appears to be following one of the behavioural management approaches, McGregor's Theory X and Theory Y. I believe he has some of the qualities of a theory 'X' and theory 'Y' manager. Jobs has theory 'X' characteristics because he prefers to lead others and expects staff to listen to his commands. His drive to change the world leads him to scream and shout at employees. In contrast, he also has some of the qualities of a theory 'Y' manager because he wants his staff to be imaginative and creative and to also be involved by participating in the design process. Jobs believes debating between his employees fosters creativity, therefore he gives creative partners a lot of rope.
In the ever constantly changing environment of the computer/electronics industry, I also see Steve Jobs following the modern management approach of contingency thinking as the competitive environment is always changing. Jobs is always required to understand the situation and respond to it in the appropriate way. Apple is also a learning organization, which is a continuing management theme. The organization continuously changes and improves, using lessons learned from prior experiences. Information sharing, teamwork, participation, and learning are all valued within the company.
Apple Inc. is very modern in everything they do which has caused them to already follow some of the common trends including: shorter chains of command, less unity of command, wider spans of control and more delegation and empowerment. Today, technology companies are starting to not talk about their product, rather the �solutions" or �customer experience" that is offered. The organization is one of the most competitive because it is constantly being one of the first to look to new trends to improve, while others companies are still trying to compete and keep up with Apple's trends. Trends of today in the technology industry include: the demand for excellence, the pursuit of great design, the instinct for marketing, and the insistence on ease of use and compatibility. These trends have been with Jobs and Apple since the beginning, which has allowed it to succeed in what it has become today. Apple remains the last and only vertical integration company, meaning they make their own hardware and software, which is their greatest strategic advantage.
Through research of Steve Jobs's management style within Apple Inc, it appears the organization is adaptive. An adaptive organization has more decentralized authority, fewer rules and procedures, less precise division of labour, wider spans of control, and more personal means of coordination. Worker empowerment and teamwork is encouraged within Apple as Jobs believes �talented staff is a competitive advantage that puts you ahead of your rivals." He likes to work in many small teams, which is a characteristic of an adaptive organization. He does not like teams of more than 100 members because he believes they can become unfocused and unmanageable if they become too large. Members of the organization are encouraged to challenge Jobs's ideas to foster creative thinking. Adaptive organizations are built upon trust of the employees to get the job down through their own initiative. It is freeing people from control and restrictions and giving them the power and freedom to do what they do best to get the job done; which Jobs allows with his creative partners. The adaptive design works well for Apple Inc.'s competitive environment, which demands flexibility in dealing with the constantly changing conditions. Internal teamwork is encouraged in the company because of the demand for total quality management and competitive advantage.
Areas Where Improvement Could Be Made:
After analyzing Apple Inc.'s organizational design, types and approaches to management, and organizational trends, it appears the design is appropriate for the organization as they are able to accomplish their mission and objectives. As there is always room for improvement in business, Apple can re-engineer some of its processes to design new and better ways to carry out work in the organization. There are many advantages for large organizations that use a divisional structure, disadvantages include: reducing economies of scale and increasing costs through the duplication of resources and efforts across divisions. Rivalries can be created as divisions compete for resources and top-management attention, and divisional needs can take away from the goals of Apple as a whole.
Apple attracts the best highly motivated workers from around the world, therefore I believe it is not necessary for Steve Jobs to be so temperamental, by screaming and shouting at employees. It would improve the organization if he lost his �Theory X" qualities as his preference to lead others and expectations that staff should listen to his commands, can create passive, dependent, and reluctant subordinates who tend to do only what they are told to or required to do. Improving human skills creates a better ability for Jobs and others to work well with each other in cooperation. Less intimidation and threat of job loss in the organization would improve the quality of work life at Apple.
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A Brief History of Steve Jobs and Apple
Born February 24th, 1955, and passing away way too early on October 5th, 2011, Steve Jobs was co-founder, chairman, and CEO of Apple Inc. His impact on the technology industry, entertainment, advertising and pop culture was vast, and he leaves behind an empire that is changing the way we all live and work.
The Beginning of Apple
It all started with three men - Steve Jobs, Steve Wozniak, and Mike Markkula - who together in the late 1970's designed and marketed the Apple II series of computers.
It was the first commercially successful line of personal computers, and led to the Apple Lisa in 1983 - the first computer to use a mouse-driven GUI (graphical user interface). One year later, the Apple Macintosh was born (launched by one of the greatest ads of all time, 1984), and with it, the Apple legend began to grow.
The Fall and Rise of Steve Jobs
In 1985, after a long and drawn-out fight with the Apple board, Steve Jobs "left" the company that he helped create. Some say he was pushed or ousted, others say he left simply to pursue other projects. That being said, his next move was NeXT, a tech company he founded that specialized in higher education and business.
One year later, in 1986, Steve Jobs took a major interest in a small division of Lucasfilm Ltd. Focused on the development of computer-generated graphics for animated movies, the company now known as Pixar was acquired by Jobs.
It was a masterstroke for Steve, who instantly saw the potential for the company (which we now all know as one of the greatest movie-making studios of our time). After many small projects and lots of trial and error, Pixar released Toy Story in 1995 (crediting Jobs as the executive producer) and the rest is history.
One year after the release of Toy Story, in 1996, Apple bought the NeXT company that Jobs owned and asked him to come back in a leadership role. He was interim CEO from 1997 to 2000, becoming the permanent CEO from that point until his eventual resignation in August of 2011.
Steve Jobs and Apple Begin World Domination
When Jobs came on board in 1996, Apple was still very much a niche computer platform. Windows-based PCs were owned by the vast majority of consumers, with the higher-priced Apple computers mainly being used by the creative industries, including advertising, design and motion pictures.
However, that all changed when the iPod came along in November of 2001. Out of nowhere, Apple was suddenly on everyone's lips. The idea that thousands of songs could be stored digitally on one small device much smaller than any Walkman or CD player was mind-blowing. Steve Jobs had spearheaded a product that literally changed the way music was played and shared.
Within a few years, Apple was the technology that everyone wanted to own. And then came the iPhone in 2007, which took Apple from a major player to the company everyone was trying to emulate. Overnight, the iPhone reinvented cell phone technology, and it was yet another crushing victory for Steve Jobs.
His company, Apple, was the brand leader and the one leading the field.
In 2010, after many variations of the iPhone, the iPad was launched to an initially mediocre reception. People and focus groups didn't see the need for it, but Steve Jobs knew it was going to have a big impact. And it did. By March of 2011, over 15 million iPads were on the market.
Steve Jobs Loses His Fight With Cancer
The health of Steve Jobs had been in question since around 2006 when his gaunt, frail appearance and lackluster delivery were the focus of his WWDC keynote address. In actuality, Jobs had announced his condition (pancreatic cancer) to his staff in mid-2004. Between 2003 and his death in August 2011, Jobs underwent many procedures and therapies to try and beat the cancer, but it was too aggressive. He stepped down as CEO of Apple on August 24 th, 2011, and died just a few weeks later on September 11th (the 10th anniversary of the attack on the Twin Towers).
Life at Apple After Steve Jobs
To say Apple greatly misses the influence of Steve Jobs would be the understatement of the century. Steve Jobs was many things to Apple, some bad, most good. Yes, he was a perfectionist and had an ego the size of Jupiter. Yes, he often didn't care about costs, or feelings, or people. But he was a visionary, and an incredible marketer of products.
The last great innovation that Apple released to the market was done so under the leadership of Steve Jobs; it was the iPad, back in 2010. Almost everything released from that point on has been an update to an existing product. New designs, like the iPen and Apple Watch, have had a very poor reception. And the idea of tying courage to the removal of the headphone jack is one Steve Jobs would never have approved of. Jobs, first and foremost, was about giving the consumer the best possible product, not 15 different types of dongles and adapters. Apple has clearly lost its way, and at this point, may never recover.
Steve Jobs was a visionary, an entrepreneur, a savvy advertising client, and from what everyone who knew him has said, a good friend. He will be missed by many, including Apple, a company that seems to have lost its way since his passing.
The Future of Apple Without Steve Jobs
To be honest, it's a mixed bag. At the time of this update, Apple stock is the trading at $144 per share, just shy of the record $156 that it set in May 2017. What does this mean? Well, despite people across the world becoming increasingly tired of what Apple has to offer on the innovation front, their products are still excellent performers, and the industry standard in design, creativity, film, music, and other such avenues.
The big question is...will Apple ever bring to market a product that was as revolutionary as the iPhone, iPod, or iPad? And it's worth noting that in all of those instances, products already existed that did very similar jobs. Apple and Steve added the lightning in a bottle, but none of these were completely original. So, does something else exist right now, something in its infancy, that Apple could jump on and create another thriving segment of the market? Several possibilities come to mind.
First, the 3D printer. Currently, they are available in varying forms, from off the shelf models to self-assembly kits, and span many price brackets. But they're prone to technical problems, and the end results are far from perfect. Apple, if it learns from what Steve Jobs did, could take this and revolutionize it. It aligns perfectly with the products it offers, and it could bring 3D printing to the masses.
Another avenue is that of the smart home. Could Apple finally create a line of products that turn your home into a completely connected, intelligently-controlled environment? Look at a product like Nest, which learns how you like your home heated and cooled, and sets the temperature accordingly. An Apple thermostat, done the Apple way, could also bring A.I. into every home.
And then, of course, there's the self-driving car. It's coming soon, but will it be everything it could be? Apple is known for focusing on consumer-friendly products. Open the box, plug it in, go. Will they be ready to handle the car that drives itself? And will it be priced way above the other offerings? Only time will tell.