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Multidivisional Structure: (Week 13) Tutorial 11 Case Study: Organization at Apple

The multidivisional structure allows a firm competing in multiple industries to reduce coordination costs while increasing specialization within divisions. Each division can focus on a specific business area and have greater control over tasks. The structure also allows the firm to act quickly to changes by adopting flexible, self-contained divisions or corporate headquarters.

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122 views5 pages

Multidivisional Structure: (Week 13) Tutorial 11 Case Study: Organization at Apple

The multidivisional structure allows a firm competing in multiple industries to reduce coordination costs while increasing specialization within divisions. Each division can focus on a specific business area and have greater control over tasks. The structure also allows the firm to act quickly to changes by adopting flexible, self-contained divisions or corporate headquarters.

Uploaded by

Ong CH
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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3.

Explain the benefits of the multidivisional structure for managing a firm that competes in
several industries.

Multidivisional structure

An organizational structure in which a firm is divided into divisions, each of which is


responsible for a distinct business area.

 Allow a company to grow and diversify while reducing coordination.


 Allow workers to focus on a specific area of business, making the divisions highly
specialized in their area of expertise.
 Obtain a greater deal of control over the tasks to be completed in the individual
division office. This allows the business to be more flexible.
 Allow a firm to act quickly and adapt to the changes by adopting self-contained
divisions or separate corporate headquarters staff.

4. Explain the different control methods that can be adopted by organization.

Methods of control

Control by personal contact with and direct supervision of


Personal control
subordinates
Bureaucratic control Control through a formal system of written rules and procedures
Goals that are set for units or individuals to achieve and monitoring
Output control
performance against those goals
The regulation of the behaviour of individuals and units within and
Market control enterprise by setting up an internal market for some valuable
resources such as capital
The devices used to encourage and reward appropriate employee
Incentives
behaviour
When incentives are tied to team performance, as is often the case, they have the added
benefit of encouraging cooperation between team members and fostering a degree of peer
control
The pressure that employees exert on others within their team or
Peer control work group to perform up to or in excess of the expectations of the
organization.
(Week 13) Tutorial 11 Case Study: Organization at Apple

Question 1
Describe as best you can the organizational architecture at Apple, and specifically, its
organizational structure, control systems, incentives, product development processes, and
culture.

Organizational Structure

The organizational structure at Apple is functional structure. The departments are divided
based on their functions and the vice president of each functional department report to the
CEO, Tim Cook, weekly to review the company's strategy, operations and updates on product
development. These functional departments are operations, Internet software and services,
software and hardware engineering, industrial design and worldwide marketing as well as the
CFO and company general council. For instance, the group will hold a group meeting every
Monday in order to review the strategy of company, its operations and ongoing product
development efforts.

Control System

The industrial design group monitor the new product development efforts, dictate the
physical appearance and design of new product and materials that compulsory used in the
development process. The centrality of industrial design has a significant contrast compared
to other companies where engineers develop products take place first and followed by
industrial design. At Apple, industrial design group work in collaboration with hardware and
software engineering groups for developing the functions and features in the new product.
Also, the operations group ensures the manufacturing can be scaled up rapidly after launching
of a product associated with a worldwide marketing plan.

Incentives

The DRI will be rewarded or questioned on the way he performs the task given to him. For
instance, there are numerous pass cases of people being fired on the spot for failing to meet
the high standards of company.

Product Development Process


The product development process is a cross-functional effort that required different groups
working in coordination and collaboration through a centralized command and control
structure. The top management group will drive collaboration and the industrial design group
will set key parameters. Apple is well-known for clearly articulating who was responsible for
what in the product development process. For example, top management will assign each task
to a “directly responsible individual” or DRI in “Apple-speak” who is responsible and
accountable for own allocated tasks completion.

Culture

The culture at Apple is the secrecy surrounding of what the company does. The
information of that deliver to the outside world and flow of information within the company
is tightly controlled. New product development is keep secretly from employees, so majority
of the employees do not know what others are working on. The building where the teams are
working on the new product development is tightly controlled and all kinds of security
measures is implemented such as cameras monitoring to ensure that the restriction is not
violated. Furthermore, disclosing the company information to an outside source or an
unauthorized people is subjected to termination.

Question 2
What do you think is different about the way Apple is organized compared to most high-
tech firms?

Apple are well-known and outstanding for their rapid innovation, constant development
and continuously changing to adapt customers’ demands and requirements in the
technology industry. The company delivers customers with a succession of current devices in
the form of great software in robust hardware. Every product Apple launched is unique with
diversified features and supreme quality from the Apple II in 1979 which is the original
Macintosh computer to the latest notable innovation such as iPod and iTunes, the Mac
Airbook, the iPhone, the Apple App store and the iPad.

Moreover, the control and command culture, the DRI approach and the secrecy measures
adopted by Apple helps to keep the new products secretly to the world until they are
launched. This helps Apple gained an advantage over their competitors by not leaking out
information of what the company is bringing up next in their new product development and
helps their product to grow without a negative media opinion which may impact the growth.
Therefore, the company stand apart from others high-tech firms and build trust in customers.

On top of that, the DRI control system allows clarity in the functioning as each employee
knows what is expected and can be held accountable for that task and eventually makes
operations easier and faster. The coordination between different functional groups helps in
getting the new product development process to be more effective and quick. As a result, it
saves time money and other resources thus giving the company an advantage.

Furthermore, Apple differs themselves from other companies through exceptional


leadership. Steve Jobs leads the Apple’s employees by building a culture where each
individual is clearly articulated who was responsible for what in the product development
process and meet the high standards of Apple. Therefore, Apple has always been at the
forefront of innovation and creation new products.

Lastly, Apple adopted to the traditional functional organizational structure rather than
divisions which most of the others competitors use. Functional organization structure that
allows for more control and specialization for the managers to ensure that the leadership
vision is converted to reality.

Question 4
Are there changes that you think Apple should make in its organizational architecture?
What are these changes? How might they benefit Apple?

 Replace their individualistic work approach

It could be recommended for Apple to replace their individualistic work approach to a more
inclusive team approach where teams and not individuals are responsible for work done.
Individuals are appreciated for contributions but the whole team or group would benefit from
any reward.

Benefit

This will help foster unity within the organisation and reduce rivalry among employees as
well as eliminate ill feelings that might result from unfair promotions. This idea as he
identifies team working as an aspect of post-industrial society and the new norm at work
place.

 Implement a more sustainable shift system or flexible working hours

Apples, work hard culture is not sustainable as it imposes long gruelling working hours on
employees. A more sustainable shift system or flexible working hours could be advantageous
for Apple, as it ensures work productivity while workers enjoy good work-life balance.

Benefit

Work-life balance practices have been shown to reduce absence, raise morale and increase
levels of job satisfaction.

 Start making succession plans

Considering Jobs condition of health, it might be appropriate for Apple to start making
succession plans. To lend credibility to Jobs claim that he had groomed executives who were
sold to his value and management style, it might also be good for Jobs to temporary step
aside for a period or consider a leave of absence to give opportunity for others to lead.

Benefit

This could build confidence that management could still function when Jobs eventually
leaves.

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