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 The organization structure of a fruit

   *image : http://www.instantshift.com/2009/01/29/20-corporate-brand-logo-evolution/

It is impossible to think of an Apple and not see a logo for computers. The brand, Apple Inc. has consumed the market place by becoming a leader in the “era of temporary advantages” (Galbraith, 2002 chapter 1). On August 21, 2012 Apple Inc. reached the highest market value record of any U.S. company in history (Apple sets record for biggest U.S. company ever, 2012) . The new record successful supersedes the beloved competitor, Microsoft – who broke the record back in 1999. The value of an Apple share closed at $665, bringing the overall market value to a shear 623.5 billion dollars. (Apple sets record for biggest U.S. company ever, 2012)

You can see the video of the coverage here.

Naturally, this success is attributed to an impressive product line, and the contributions of many great technological advances. As I read through this week’s readings, I saw several moments when I realized Apple’s success is more than just nifty new gadgets, but indeed goes into the organizational reconfigurability and organizational shapers, such as those indicated by Jay R. Galbraith (2002, chapter 1, chapter 6).

A year ago, when the Apple chief operating officer was asked why the long-term plans for organizational success is a secret. His response? “Well, that is part of the magic of Apple, and I don’t want to let anybody know our magic because I don’t want anybody copying it” (Lashinsky, 2011). This response may explain why I found it difficult to find credible sources articulating the organizational structure of Apple Inc. However, an article by Adam Lashinksy titled How Apple Works: Inside the World’s Biggest Start Up provided some interesting and relevant points.

Somewhere in the last 10 years “Apple” and “Steve Jobs” practically became synonymous to not just to consumers, but within the organization as well. Why is this? Perhaps it starts in the structure of higher management of Apple, as demonstrated by this image below. At the literal core of the organizational structure is Steve Jobs. This structure is both changing, but stable, as Galbraith indicates is a critical element to designing a “reconfigurable organization” (Galbraith, 2002 chapter 6).

image: (Lashinsky, 2011)

 

Perhaps taking a look at the elements of Galbraith’s Star Model can give some insight into the organizational design of Apple.  Galbraith worked with the framework the Star Model, later renamed the “Reconfigurable but Aligned Star Model” (Galbraith 2002 chapter 6), which divided organization framework into five categories – strategy, people, structure, rewards, and processes (Galbraith 2011, Galbraith 2002 chapter 6). Steve Jobs positioned himself to be involved in almost every act of Apple, down to what food is offer in the office cafeteria (Lashinsky, 2011). As for strategy planning after Steve Jobs was to pass away, he didn’t reveal his how his mission was to be pursued by his successors, but expressed the desire to personify the qualities of himself – detail-oriented, secretive, and constructive criticism – into the processes of Apple’s organization (Lashinsky, 2011).

The article goes on to talk about employees, which fall into the People category of Galbraith’s Star Model. The article alludes to Job’s unconventional training method for his new VPs, of which he had about 70 (Lashinsky, 2011). I found this story enlightening and think it is worth sharing. Here it is, quoted directly from cnn.com

*artwork: http://www.etsy.com/listing/107270918/steve-jobs-pop-art-mini-poster-11-x-17

Galbraith (2002, chapter 1) highlighted six organization shapers – buyer power, variety and solution, the Internet, multiple dimensions, change, and speed. Jobs attention to speed and change can be defined as “Constant Course Correction” (Lashinsky, 2011). The source reveals that this is expressed by the instantaneous response to executives who wish to change any detail, at any given time – even pricing of new items within a 48 hour period before public release (Lashinsky, 2011).  The attention to change and speed is further demonstrated by every Monday he had a complete business overview with his executive team and every Wednesday he had a meeting with his marketing and communications team. This simplified process of communication allowed for swift changes to occur when necessary and keep decision making speedy. One interesting element however, may be that Galbraith (2002, chapter 1) suggested that speed implied decentralization, whereas this method as outlined by Jobs indicates that speed was accomplished through centralization.

Possibly there is current flaw to Apple’s devotion to a being flexible and effective in a constantly changing environment, and it’s in their rewards design. The rewards system is intended to motivate employees to identify with the company missions (Galbraith, 2011). Employees are naturally self-motivated, as being apart of the Apple team indicates a certain level of success. However, unless you are at the top of the corporate ladder or are invited to be in on an annual Top 100 meeting (Lashinsky, 2011)- working on the front line for Apple is a short lived pleasure. Apple Inc. falls far from the employee rewards tree, paying it’s employees an average of less than $12/hr (Weinstein, 2012). Starbucks, famous for providing excellent benefits and support for employees at all levels is number 73 on the CNN list of 100 best companies to work for in 2012 (Levering, n.d.) which Apple is not even seen.

Monetary reinforcement is not everything. Morgan (1998) discusses the ways to appeal to individual needs and lists the following five categories of needs: self-actualizing, ego, social, security, and physiological. Apple is young enough to focus on retail employee needs such as identifying with the brand, feeling responsible, socially engaged, and hope for upward mobility. However, as the company gets older these are not enough. Apple will need to focus on the monetary needs of their extremely qualified employees. At this point, the only reward of working as a retail employee for Apple is the name recognition that implies superior customer service and technological knowledge. This gives employees an excellent reference for future jobs – in other words, when they get tired of working for Apple and it’s poor rewards system.

It will be interesting to see where Apple’s organization goes from here…

Citations:

Apple sets record for biggest U.S. company ever. (2012, August 21) In Bloomberg Business Week. Retrieved September 22, 2012, from http://www.businessweek.com/videos/2012-08-21/apple-sets-record-for-biggest-u-dot-s-dot-company-ever

Weinstein, B. (2012, June 25) Apple’s no. 1 opportunity for growth: Pay store employees more. Retrieved from http://www.businessweek.com/articles/2012-06-25/apple-s-no-dot-1-opportunity-for-growth-pay-store-employees-more

Lashinsky, A. (2011, August 25) How Apple works: Inside the world’s biggest startup. Retrieved from http://tech.fortune.cnn.com/2011/08/25/how-apple-works-inside-the-worlds-biggest-startup/

Levering, R., & Moskowitz, M. (n.d) 100 Best companies to work for 2012.  http://money.cnn.com/magazines/fortune/best-companies/2012/snapshots/73.html