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. 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.

When Jobs returned in 1997, Apple had a conventional structure for a

company of its size. General managers ran products, or "business units,"

each with their own bottom lines. And, like in many large companies,

those general managers often worked against each other, leading Apple to

the brink of bankruptcy.

In a recent piece for HBR, Joel M. Podolny and Morten T. Hansen, dean

and faculty member of Apple University, respectively, describe how

quickly Jobs reorganized things.

"Believing that conventional management had stifled innovation, Jobs, in

his first year returning as CEO, laid off the general managers of all the

business units (in a single day), put the entire company under one P&L,

and combined the disparate functional departments of the business units

into one functional organization," write Podolny and Hansen.

In other words, Jobs single-handedly destroyed the silos that were killing

Apple, forcing the entire company to work together as a single and

cohesive unit.

What's remarkable is that Apple continues to operate under this general

structure today, despite the fact the company is nearly 40 times as large in

terms of revenue and has grown from around 8,000 employees to 147,000.

Today, CEO Tim Cook (like Jobs before him) "occupies the only position

on the organizational chart where the design, engineering, operations,

marketing, and retail of any of Apple's main products meet," explain

Podolny and Hansen. "In effect, besides the CEO, the company operates

with no conventional general managers: people who control an entire

process from product development through sales and are judged according

to a P&L statement."

Apple's sustained success has proved that its model can work for

companies of various sizes.

For this model to work, though, Apple's leaders are expected to have three

things:

1. Deep expertise

2. Immersion in the details

3. Willingness to (collaboratively) debate

Let's break each of these down, and see how the lessons can help you and

your business.

Deep expertise
"Apple is not a company where general managers oversee managers;

rather, it is a company where experts lead experts," write Podolny and

Hansen.

Today, many companies make the mistake of hiring or promoting people

into management who have good organizational skills but who have little

expertise in their area of focus. Jobs identified this as an early problem of

Apple's.

"We went through that stage in Apple where we went out and thought:

'Oh, we're gonna be a big company, let's hire professional management,'"

Jobs said in a 1984 interview. "It didn't work at all. ... They knew how to

manage, but they didn't know how to do anything. If you're a great person,

why do you want to work for somebody you can't learn anything from?"

According to Jobs, the best managers were the experts who never wanted

to be a manager but decided they had to be, because they had the deepest

expertise and could guide their teams in the best way.

Apple continues to prioritize expertise and experience today.

"The assumption is that it's easier to train an expert to manage well than to

train a manager to be an expert," write Podolny and Hansen. "Apple's

leaders believe that world-class talent wants to work for and with other

world-class talent in a specialty. It's like joining a sports team where you

get to learn from and play with the best."

Immersion in the details

Apple expects its leaders to know intricate details of its team's functions,

as this allows them to make better decisions.

"Managers tell war stories about making presentations to senior leaders

who drill down into cells on a spreadsheet, lines of code, or a test result on

a product," relate Podolny and Hansen.

But as Apple grew, it encountered challenges. Senior

leaders couldn't remain immersed in the details of everything; there simply

wasn't enough time in the day.

To address this, Apple says it encourages leaders to "decide which

activities demand their full attention"; leaders stay fully immersed in the

details of those activities. Apple leaders can then delegate other pursuits--
which are still important, but of lesser priority--to other members of their

team.

The benefits of doing this are twofold. First, leaders create a team of

specialists who can learn from one another, and from whom they can

quickly access details when needed. Second, they train team members to

become experts in their own areas of focus, and how they can delegate

should they happen to be promoted to a more senior position in the future.

Collaborative debate
Of course, many companies have deep collective expertise--which is what

makes the third requirement for Apple leaders so important: the

willingness to engage in collaborative debate.

Jobs and his team did this 30 years ago, and Apple leaders continue to do

it today. Experts debating experts, openly sharing their views and the

consequences of potential decisions. And "because no function is

responsible for a product or a service on its own," explain Podolny and

Hansen, this type of "cross-functional collaboration is crucial."

The key word, though, is collaborative.

Remember, Apple's goal is to eliminate silos and create a single, high-

performing team. To do that effectively requires Apple's leaders to work

well together, which is why, in theory at least, Apple prefers to promote

leaders who are proven collaborators.

"Leaders are expected to hold strong, well-grounded views and advocate

forcefully for them, yet also be willing to change their minds when

presented with evidence that others' views are better," write Podolny and

Hansen. To balance the abilities of being both partisan and open-minded,

they explain, depends on those leaders' "deep understanding of and

devotion to the company's values and common purpose," as well as a

commitment to making decisions that are in harmony with those values

and purpose, regardless of degree of difficulty.

The result, explain the authors, are discussions where participants feel free

to disagree, push back, and promote or reject ideas--all in the service of

improving one another's work and coming up with the best solutions.

In line with this, Podolny and Hansen point out that the bonuses of senior

R&D executives are based on Apple's performance numbers as a company,

rather than being tied to the success of single products.

That's like a startup--a startup that happens to have over a hundred

thousand employees, and has become one of the most valuable companies

in the world.
So, if you want your people to work together, instead of against each

other, take a lesson from Steve Jobs and find leaders who are:

 Experts

 Immersed in the details

 Willing to collaboratively debate

Because while Jobs may have died 10 years ago, his management

philosophy helped Apple become the company it is today.

Apple is an American technology company founded by Steve Jobs, Steve Wozniak, and
Ronald Wayne in April 1976. Incorporated in 1977, the company was one of the early
manufacturers of personal computing devices with graphical user interface. Over the
years, the company also forayed into other consumer electronics segments like mobile
communication devices, digital music players, notebooks, and wearables. The company
also develops and markets a range of related software and services, accessories, and
networking solutions. Currently, the company’s chief executive officer (CEO) is Timothy
Donald Cook, commonly known as Tim Cook.
 
From smart wearables to digital content streaming platforms, Apple offers a wide range
of products and services within a closed ecosystem. Its products include iMac desktops,
MacBook notebooks, iPhone mobile devices, iPad tablets, iPod digital multimedia
devices, Apple Watch and Apple TV. The services include iOS operating system for
mobile devices, macOS operating system for notebooks and desktops, iCloud online
storage, tvOS operating system for Apple TV, watchOS operating system for Apple
Watch, iTunes for digital content services, Apple Pay digital payment service, Apple
Music for online multimedia streaming, and Apple News.
 
Apple has been known to be on the forefront of innovation. The company was among
the first to develop an app-based ecosystem for smartphones. It was the first
smartphone maker to introduce touchID — a fingerprint scanner module to unlock a
device — and use 64-bit processors, both of which were later also adopted by most
other smartphone manufacturers.
 
Apple’s services have so far been exclusive to its own products. However, in March
2019, the company announced that its subscription-based TV Plus service will be
available as an app on televisions from other brands, too. This is for the first time that
Apple has enabled its ecosystem service to work on products from other brands, and
more announcements of similar nature are expected in future.
 
In 2019, Apple also settled its long-pending legal battle with American chipmaker
Qualcomm. The move came after the company found itself in a tight spot securing 5G
chips to power its future devices. With Qualcomm on board, the company is expected to
bring its first 5G-ready smartphone by 2020.
A divisional structure is a type of organizational structure that organizes business
activities into categories like products or services, customer groups and
geographical locations. Large businesses depend on divisional structures and create
individual units, distributing functions between the parent organization
(headquarters) and its subsidiaries (the branches).

McDonald’s Corporation, one of the leading fast-food chains in the world is an

ideal example of a divisional organizational structure. The overall business is
divided into independent divisions that have responsibilities based on operational
requirements.

This type of corporate structure not only supports autonomy but also allows
organizational flexibility in fulfilling business needs in different markets and
locations. Let’s unpack this example of a divisional structure and understand how a
typical divisional organization functions:

1. GLOBAL HIERARCHY
It’s no secret that McDonald’s has a global presence. From ‘drive thrus’ to
Ronald McDonald, its operations are widespread. Despite the finer branches
and divisions, the primary decision-making power rests in the hands of the
executives. Therefore, it has created a global hierarchy where the smaller
units report back to headquarters. Every mandate will pass from the parent
organization to middle managers, restaurant managers and other personnel.
This feature is commonly seen in most global organizations.

2. PERFORMANCE-BASED DIVISIONS
A divisional structure often uses performance as a metric to introduce or
remove divisions. For example, if the Asian chains are generating profits,
McDonald’s is likely to expand and open new restaurants. Alternatively, if
restaurants aren’t performing well in one region, they are likely to shut down
operations. The high-growth markets present considerable potential for
business growth.

3. FUNCTION-BASED GROUPS
 Like every traditional organizational structure, McDonald’s maintains
function-based groups. There is a people group for human resources
management, a supply chain group that oversees the supply chains from
beginning to end and a sustainability group for eco-friendly endeavors. They
add and change groups according to change in the market or industry
demands.

IS A MULTIDIVISIONAL
STRUCTURE ANY
DIFFERENT?
A divisional structure is also known as a multidivisional structure and there are no
differences between the two. In a multidivisional structure, one parent organization
owns subsidiaries that use the same name and brand. The Walt Disney enterprise is
a perfect multidivisional structure example. Various divisions and functional units
keep the massive entertainment empire afloat and successful. Let’s explore
this example of a divisional structure in greater detail:

1. BUSINESS-TYPE SEGMENTS
Business-type segments or divisions is the foundational characteristic of
Disney. The segments help to focus on specific business types and industries.
For example, there is a segment for film and entertainment and another
segment for amusement parks and resorts. Despite the diversity, the segments
operate under centralized corporate management. The organization has the
power to diversify its global business by creating or changing segments.

2. GEOGRAPHICAL DIVISIONS
Disney not only has a global reach, but it also addresses variations among
regional, local and domestic markets. These differences arise from socio-
cultural differences and preferences of customers. For example, Disney has
produced and supported several movies in India. In addition to producing
films locally, it has also provided dubbed versions of international films in
regional languages. This is how a divisional organization penetrates various
strata of society, despite diverse market demands.

3. FUNCTIONAL GROUPS
 Just like McDonald’s, Disney also organizes functional groups for better
strategic management. It ensures effective cooperation and collaboration
among business-type segments. For example, characters from a Disney movie
are sold as merchandise in the amusement parks. Such effective cooperation
is possible because functional groups have common objectives and synergy.

It’s clear from these examples of divisional structure that large organizations

benefit immensely from this structure. If you want to make the best use of a
divisional structure, gain a deeper understanding of your workplace culture and
structure. Harappa Education’s Navigating Workplaces course will teach you how
to assess the workplace and effectively deal with power structures. Understand
your workplace and workforce to boost productivity and workplace success.