With the functional organization structure, the company is divided into hundreds of specialized teams. Dozens of groups can work on a single component of a new product. For example, at least 40 teams worked on a dual-lens camera with portrait mode: motion sensor software, sensor development and other aspects (Podolny & Hansen, 2022). Like Jobs before, Tim Cook now occupies the only CEO position in the entire organization. Cook controls the design, development, marketing, trading, and other processes at Apple (Schmitt, 2021). Otherwise, there are no general managers in the company who could directly influence the processes. Decisions in the company are made only by employees with the most significant experience and expertise in a particular field. Apple distributes its products in rapidly changing technological markets (Podolny & Hansen, 2022). Therefore, relying on employees’ decisions with deep knowledge is essential. The company relies on technologies that must be successful even before they become popular on the market — experts increase the likelihood of a successful product.
If the company relied primarily on financial indicators, it would slow down work on innovative products. For example, top research departments are paid bonuses based on the performance indicators of the entire company and not on the financial results of individual products. Moreover, the finance team does not participate in development team meetings, and the engineering teams do not determine the price of products (Meyer, 2022). The reputation of an individual employee and a team in a functional organization is a way of managing decisions. After introducing a functional organization by Steve Jobs, Apple managers at all levels had to have two key characteristics. They need to have deep experience to participate in all processes around a particular function meaningfully (Meyer, 2022). The willingness to discuss other functions during collective decision-making is correspondingly essential. Thus, only qualified employees influence the company’s actions.
The functionality of the Apple framework has different pros. The advantage is that all employees collaborate, resulting in gadgets built within the company’s boundaries that, in principle, function in harmony (Podolny & Hansen, 2022). It is worth noting that this is the key to the success of the Apple ecosystem. Each manager is solely accountable for the product, profitability, sales, and general efficiency under the classic divisional organization (Kao, 2018). The functional structure allows employees to work together. It helps Apple create software and hardware solutions that can be applied to multiple products. Managers can think more broadly without focusing on specific products.
The organizational structure built around special knowledge contributes to the creation of innovations. It is based on the premise that the most experienced and competent specialists in this field should decide on specific issues. Finding a balance between cost control and creating additional value for customers is more manageable when decisions are made by leaders who know their field well rather than general managers who are more concerned about targets (The Org, 2021). The fundamental principle of the traditional structure of an organization is a combination of responsibility and control. In that case, the functional structure is based on a combination of knowledge and decision-making rights.
References
Kao, R. (2018). Disruptive leadership: Apple and the technology of caring deeply—Nine keys to organizational excellence and global impact. Productivity Press.
Meyer, P. (2022). Apple Inc.’s organizational structure & its characteristics (an analysis). Panmore Institute. Web.
The Org. (2021). A history of Apple’s organizational structure. Web.
Podolny, J. M., & Hansen, M. T. (2020). How Apple is organized for innovation.Harvard Business Review. Web.
Schmitt, K. R. (2021). What is Tim Cook’s managerial style? Investopedia. Web.