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Apple Computer Company Organizational Structure and Culture

Integrative Research Project 12/06/2010 Lusheng Ma Nick Lyon Will Duray

Apple (Inc.) is an American multinational corporation that designs and markets consumer electronics, computer software, and personal computers. The company's best-known hardware products include the Macintosh line of computers, the iPod, the iPhone and the iPad. Apples challenge will always be to remain profitable. Despite this constant, Apples competitive markets have changed over the years with its products. Initially, Apples rivals were developers of home computer hardware, and software, but more recently the companys products have shifted toward mobile consumer electronics. In the future, Apple will likely compete more heavily in the mobile phone and touch tablet markets. When it comes to the organizational structure of the company, there are a few trends that become more and more outstanding when the company is under observation. These trends are mostly involved with the corporate structure of the organization as well as the culture and values associated with its organizational culture. In this paper the many different aspects of Apple Computer Company will be analyzed and reviewed to help the reader gain a better understanding of how this organization works. The primary sources of diversity in the corporation are seen in two ways, their foreign supply workers and factories and also through their supplier diversity program. The bulk of their foreign workers are seen in their Taiwan and Malaysia suppliers. When it comes to their national diversity programs, the company works with many organizations. Some of these organizations are the National Minority Supplier Development Council, The Womens Business Enterprise National Council and Veteran-Owned Business Expositions. The businesses that Apple considers to be a

divers supplier are those that are Minority. Women, Veteran and Service-Disabled Veteran owned businesses. Although the company has many foreign contract workers in other countries, this does not come without a few issues. According to the companys website, they have faced ethical challenges in the areas regarding supplier responsibility in their Asian manufacturer suppliers. The challenges that theyve encountered are in regard to the protection of their Foreign Contract Workers. The main issue was with the initial employment of the workers, in these countries experiencing the problem it is particularly difficult to secure a job, so outside agents charge fees to get the workers in question signed on with Apple. These fees sometimes add up to many months work of the employees wage. So Apple has begun to pay these fees for the employees and has started monitoring compliance with these agencies and their contract workers in their different countries. Even though the Apple Computer Company started in a garage in the silicon valley, it has grown massively with the innovations and products they produce, they are most definitely a global organization. The effects that this globalization has on its structure are widespread. The company has its American headquarters while many of its suppliers/manufacturers are overseas. This brings a good deal of diversity to the company as a whole. Being a technological giant in todays Computer, TV, Mobile Phone, MP3 and Internet Device areas gives it the capability to take its multi market products to all countries that it provides sales for. Also its global manufacturing and sales provide a basis for competition all over the world with the other large tech firms.

When it comes to the motivational practices of Apple, the two most prevalent theories that are seen have to do with McClellands Need Theory, which focuses on a persons personality and learned needs. McClelland called these needs he described as Manifest Needs because he believed they are easily perceived. The two needs that Apple plays into are the needs for achievement and affiliation. These two needs work well with the company because they are dealing with the higher order needs, these are the needs that deal with self actualization needs, esteem and social needs. The need for achievement is seen by the companies want for creative and innovative employees that also want to be involved with one of the most advanced companies in the computer industry. It is specifically seen on the corporate website under the Job Opportunities section, the first thing that is written is Part career, part revolution which emphasizes this idea that the employee will be accomplishing something landmark in their time at Apple. This notion also carries through to the other need that is in question. The need for Affiliation, this need is seen by the level of hierarchical equality within the organization as well as the idea that when you join the company you join a tight nit community of like minded people and thinkers. When it comes to employee rewards, Apple is like many other large companies in similar tech markets. When looking at the prospective employee section of their website one can see that the apple company has a program that is called their Apple corporate gifts and rewards program. Sometimes a simple act of generosity can motivate employees, impress prospective client, and lead to more loyal customers. Its all possible with the gift of a new ipod, Mac, or iTunes gift card.

The previously mentioned employee reward systems can help Apple employees manage at work stress/ stressors by showing them that all of their hard work isnt going unrequited. But they do also have a more well established system to help employees with these stress issues that they may see during their period of work for them. Apple Computer offers employees a six-week paid sabbatical after every five years of employment. According to benefits manager Sally Brewster, Apple instituted the program to give employees in its intense industry a chance to relax and recharge. In addition, co-workers of those on leave have a chance to learn new skills.Once employees at Apple become eligible, they have a year in which to start the sabbatical; they can ask for an extension of either one year for business reasons or six months for personal reasons. Fewer than 10 employees per year opt out of the sabbatical. Brewster admits that "it's definitely a challenge to manage" sabbaticals for the working units. Potential problems arise when an employee goes on sabbatical just after transferring to a new unit, when large numbers of employees become eligible all at once, or when managers are reluctant to let go of key employees for any period of time. Part of Brewster's job is to work with management to come up with creative solutions. But all employees at Apple receive the benefit; despite occasional conflicts, the fact remains that it is a company policy.

When Apple has had to downsize, some employees have canceled impending sabbaticals. However, Brewster points out that it is not a matter of worrying about whether they'll lose their jobs because they're gone - that is not a factor in deciding who is laid off. Often, however, a reassignment or reorganization comes with downsizing,

and employees want to be around to get settled and established in their new organizational home.

It doesn't hurt that meditation has some high-profile corporate disciples, including bondfund king William H. Gross, of Newport Beach (Calif.)'s Pacific Investment Management Co., who often meditates with yoga before a day of trading at his $349 billion moneymanagement firm. Tech outfits like Apple Computer (AAPL ), Yahoo!, and Google, which already offers an organic chef and an on-site masseuse, are also signing up.

Apple has employee wellness programs that include A smoking cessation program Seminars on nutrition and weight management Health assessments that measure blood pressure and resting pulse Fitness evaluations that assess cardiopulmonary fitness level, strength, flexibility, body composition, and nutritional status Medical examinations that include physical exams and exercise strength tests to determine cardiovascular fitness

Despite Apples very relaxed philosophy and corporate structure, their foreign manufacturing plants are infamous for high-stress working conditions, with several dozen confirmed suicides at the Chinese Foxconn plants in particular. These stress

conditions arent necessarily a factor to be attributed to apple, as these plants are independent companies, but it does show that Apple will allow manufacturing of its products to conducted in poor working environments. Apple takes a very team oriented attitude toward most of their work in the organization. This is because the company is a technological focused one, and uses teamwork to cultivate the creativity and forward thinking that help it succeed in its markets. The team centered attitude helps provide a cultural aspect for outsiders as well, this is because outsiders see a company whose mission is to provide the most pertinent products for the customers lifestyles through the use of technologies and creative thinking. This idea of teamwork works closely with the organizational methods for decision making. The idea that most employees are treated as if they are equal, not matter what their hierarchical position in the organization, is key in this decision making model. If a definition were to be given to how they make decisions, it would be that they use group support systems made up of different level employees of different specialized backgrounds. When looking toward the Apple Company, it becomes visible that the way they have come to make their decisions has led them in the right direction on their path toward success in many different markets. The combination of many creative, business and tech savvy employees doing so well in this environment is testament to how well their decision making and group techniques works in this industry.

In looking at Apples organizational power systems, a fairly complex structure is unveiled. Apple uses many different types of power that help, and sometimes hurt their

public image. Apple applies quite a bit of reward power to help motivate its employees. Bonuses are often awarded to employees for meeting deadlines and for the contribution of innovative ideas. Another power displayed by Apple is referent power, as the company is lead by very charismatic leaders who aim to operate the company in their preferred manner. This style of leadership helps form an identity for Apple that emphasizes individuality and cross-level equality. Apple also exhibits expert power due to the fact that employees of the company are renowned for their level of technical expertise. Becoming very technically proficient is the aim of many employees who seek jobs at Apple. Groups within Apple have a high degree of centrality, because there is a high degree of interdependency among groups in the organization. Industrial designers, hardware engineers, and programmers are just a few of the groups involved in a typical Apple product, and they all depend on one anothers contributions in order to effectively meet deadlines. Also, due to the critical function of each of these teams, they also hold the power of no substitutability, because each groups contributions are also critical to the fabrication of products. Negative power is demonstrated by some executives by their exercise of personal power. Many of the upper-level positions in Apple are held by individuals who know how to acquire and apply power in order to gain their desired achievements. This is a common characteristic of executive positions, and Apple is no exception.There is a significant amount of positive power in Apple though. Apples atmosphere and structure prioritizes equality among employee levels, so there is a high degree of altruism that

helps to balance negative powers. Apple also emphasizes the need for employees to enjoy their work, which assists in creating a positive work environment. Some degree of ethics can be inferred for Apple, because, as previously stated, one of Apples principles is maintaining equality and a low separation of power among employees. Apple is also known for donating to charitable causes, such as amassing donations through their iTunes store for Haiti earthquake relief funds. Yet another example of ethics at Apple is that CEO Steve Jobs works for only one dollar a year and benefits. Employees at Apple are definitely empowered. As evidenced numerous times throughout this research, Apple places a high degree of emphasis on employee competence, creativity, and satisfaction and less on separating the power through management. Apple often pools ideas and skills from all levels of the organization to delegate power and ignite innovation. This environment is operated through participatory empowerment, which has been an Apple precept since its inception. While everything else has been questioned about the Apple organization, its only natural that the work environment be examined. The general description of their environment can be described as democratic and a Laissez-faire atmosphere. A comfortable environment will provide employees more freedom space that will be increase work efficiency. It also push employees or challenge them to expand their creative power. However, with the introduction of a very relaxed environment comes the risk of employees becoming lazy or less productive due to the increased freedom they receive. To counter this, Apple has introduced programs to help leaders take advantage of these certain work environments and harness the employees strengths. One of these programs that help managers and leaders improve their leadership is the Apple Store

Leader Program. The following quote from the Apple Website shares a few details about the program specifics. The Apple Store Leader Program is a 24-month immersion in every aspect of managing and operating an Apple Retail Store. In this program, you'll gain selling skills working as a Specialist and an Expert, you'll learn to teach and train others as a Creative, and you'll learn to resolve problems working at the Genius Bar. As you progress through the program, you'll be guided and mentored by a Market Leader, undergo a variety of training experiences, and be given leadership opportunities. You'll emerge from the program with world-class leadership skills and the opportunity to secure a leadership position at one of our stores anywhere in the world. For the section that required that we look into a job available in the organization, We chose to look at a marketing position. They are looking for an employee who has a creative and strategically oriented personality. The most important factor to them is good communication skills and having well developed leadership qualities, because those skills will improve a marketing teams performance level. Apple is known not only for its extraordinary products, but also for its outstanding marketing and advertising. So the marketing team comprises some of the smartest, most dedicated people in the tech industry, and this job needs marketing people that take advantage of all available resources to improve customers satisfaction and willingness to buy. Another important aspect of Apple culture is its corporate citizenship and culture. Apple was one of several highly successful companies founded in the 1970s that bucked the traditional notions of what a corporate culture should look like in


organizational hierarchy (flat versus tall, casual versus formal attire, etc.). Other highly successful firms with similar cultural aspects from the same period include Southwest Airlines and Microsoft. Originally, the company stood in opposition to staid competitors like IBM by default, thanks to the influence of its founders; Steve Jobs often walked around the office barefoot even after Apple was a Fortune 500 company.From its early days of operation out of Steve Jobs garage, to its later bouts with industry rival Microsoft, to its most foray into high-end consumer electronics, Apple has always held the instrumental values of independence and imagination. These values have created an atmosphere at Apple that has resulted in a high-performance, highly successful organization, which has developed a unique identity for its brand and its employees. Although, as the company has grown and been led by a series of chief executives, each with his own idea of what Apple should be, some of its original character has arguably been lost, but Apple still has a reputation for fostering individuality and excellence that reliably draws talented people into its employ, especially after Jobs' return. To recognize the best of its employees, Apple created the Apple Fellows program. Apple Fellows are those who have made extraordinary technical or leadership contributions to personal computing while at the company. After examining the basic culture of the organization, the next logical topic is the job design and its unusual pros and cons. Apple employs job enrichment as a main tenet of its organizational job design. Employees are rewarded based on performance and there is often a lot of power placed on jobs even at the lower levels of the organization. Engagement is also another design approach embraced by Apple. Employees are encouraged to express themselves in their work and workspace and

have the products be a reflection of this philosophy. This principle is what also signifies Apples ergonomics approach to job design, in that the employee must be comfortable with their work environment in order to achieve their greatest performance. Apple also utilizes employee cross-training as part of the corporations job enlargement strategy. Not only does this training result in a more flexible and highly-trained employee, but it is also useful for enhancing functionality and cooperation in work groups. Job enlargement techniques such as cross-training aid employee retention, as employees feel more connected and integral to the operation of the corporation. A challenge Apple faces with these job design decisions is how to maintain these principles while also operating at a high level of efficiency. Even though this remains a challenge, employees at Apple often stay motivated due to the liberty given to them at the workplace and their loyalty to the organization. Even with such a different style of job design and organizational culture, Apple is still a formal corporation, despite how it is portrayed there is still a hierarchal structure that is used and helps keep the basics of the corporation moving in sync. In its basic design dimensions, formalization of the company is seen with the various rules, regulations and procedures that help provide a basic structure and jumping point for the creativity and innovation that they are known for. The CEO in this case, Steve Jobs, is a major proponent for the idea of centralization within the organization. He still leads the company and has the final word on major decisions that will affect the future of the company. He also provides a working role model that can enact the values that he and upper management set for all other employees to follow. Another design dimension for the organization that is readily seen is that with values of specialization. The

organization itself is specialized by nature, being involved with the technology market. The idea of specialization is also seen in the inner structure, there will inherently be specialized employees for say, the engineering and manufacturing sectors while the skill set required for marketing and retail management will be vastly different. With this specialization comes complexity, this is born from the need for each department to work well together to achieve the organizations unified goal. As much as this seems like a standard corporation, there are many things that set it apart, one of these being the idea that they downplay the hierarchy of authority. This creation of a seemingly equal peer environment is one area that sets Apple apart from most other organizations in existence. All of these factors put together most definitely affect the people who work for, and shape the outline for what defines Apple as we see it today. Some of the most important things to Apple are its culture and the way their employees view work, or in essence the culture of the corporation. There are cultural artifacts that are apparent on the Apple website are those that show an open sort of culture between the different levels in the company as well as focusing on the products that they produce. Much of the website is dedicated to the products and their new technologies that are being introduced in the market. The first function of culture in an organization is providing an identity to members. In the case of Apple this aspect of their culture is a huge part of being an employee and part of the organization. This is seen on their website regarding employment in the organization. They say that working for them is less of a job, and more of a calling. On the very same page they talk about how if you work for the organization you dont just have a job, but you are part of something bigger and have a

license to change the world which implies that employees all throughout the organization have a large part in what the company does. With the basic structural design of the company, comes the need for employee development and a want for high employee retention year to year. The basic culture of this company is one thing that helps both of these areas become a major part of shaping the employee atmosphere within the organization. As with many other technology-focused companies, Apple employs the use of product development teams when developing new products. These teams often include a blend of junior and senior employees, which helps to diversify perspectives, approach, and technical expertise within the team. The senior members also serve to help train the junior members and to provide the group with members who are readily familiar with production deadlines.Also, as with most companies, employees displaying high competence in their field have vertical mobility. This mobility generally within the employees specific department, but Apple does utilize employee cross-training and groups with highly varied specialization to expose employees to a broad range of specialties within the corporation. The cultural artifacts of this organization point to a relaxed work environment but still have a high level of innovation and demand. When reading an article from the IBS Center for Management Research, they mentioned many things regarding the companys values and beliefs. They said that Apple was one of the companies that pioneered the idea of work hard and play hard. So the artifacts on the website that mention the relaxed atmosphere as well as their innovations play very deeply into their values and beliefs. When looking at the companys espoused and enacted values, you can see a level of similarity between the two. Even with the relaxed environment and

overall atmosphere, they still are held to very high demands and pushed to be creative in their efforts to create the newest and most innovative products. But when reading a report from the New York Times about the security aspects of the company there were some differences regarding their open nature and relaxed ways. In this report it talked about how tight lipped and closed off the more internal workers that are on special projects are. This New York Times article plays into the enacted values of the company because they are different than the more happy-go-lucky front that is seen from artifacts like the Apple website.

When viewing the company from a changeable perspective, one can see that because of their organizational culture and values, they are very changeable. This is because they pride themselves on always changing and moving to where their markets want to be. The challenges that they face in this aspect are trying to stay innovative as well as keeping themselves on solid ground and keeping their products available to everyone, not just those customers who are very brand oriented and techno centric individuals who always want to have the most innovative products released with indifference toward what brand is producing it. With all things considered, the organizational structure of Apple Computer Company paints a picture of a company that is trying to take its values to heart and provide a nontraditional view of how they do things, as opposed to the other giants they are competing with in a global technology market. Despite a few issues with foreign contract workers, Apple works hard in maintaining an image of it, its products and its workforce as a whole. The image that is so readily portrayed is one that gives customers an idea

that they are getting the most technologically advanced products available as well as some of the most creative and innovative items available to the public.


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