The organizational theory gives a clear understanding of organizations and organizing processes. It offers a fair appreciation of various perspectives that form the knowledge concerning organizations (Daft 2007). Different schools of organizational thought are categorized basing on micro and macro levels of organizational study. In this analysis, modernism and critical theory are the two perspectives of organizational theory that will be used in the analysis of Apple Inc. Modernism is base don objectivism. In this case there exists an objective reality, which is free of our understanding. The use of modernism in the analysis of organizations is because they are existent units that loan themselves to our senses. Critical theory is important in the analysis of organizations because over the years understanding of organizational life has been approached in a critical manner.
The epistemology of modernism is positivism, which refers to testing the logic against the reality by theorization and conceptualization (Linstead, 2003). Knowing the truth is important in crafting and achieving our objectives wisely. The management at Apple makes use of concepts of modernism in its management style. Modernistic approaches have enabled the company in exercising control over its vast operations and numerous employees.
The industry that Apple operates in is competitive and dynamic, and this requires that the company remains focused in predicting its outcomes. This is only possible by knowing the strengths and weaknesses of the company. Even though Apple has been successful, it does not mean that it does not have weaknesses, and an understanding of this helps it navigate the competitive market it operates in.
According to the systems theory of modernism, which is influenced by Emile Durkheim’s functionalism, the main concern is social integration. These are the threads that bind individuals and groups together. A company like Apple is a system made up of mutually and organically related parts known as subsystems. It is important to understand the mechanism governing the system and how each subsystem carries out a particular activity, and its overall contribution to the good of the system.
An organization is composed of four subsystems: social structure, technology, culture and physical structure. These subsystems form the global environment that is referred to as super system (Linstead, 2003). Apple Inc is made up of the four, where social structure relates to its organizational structure, technology is the effort it puts on innovation, culture is the attitude of management and employees towards the company and the outside community, and the physical structure is composed of the production industries and Apple Stores.
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In the 19th century, critical theory was mainly influenced by the works of Karl Marx, which focused on social divisions, inequality, and organizational conflict. During this period, organizations were analyzed from a capitalist perspective. Over the years, the focus of critical theory has shifted to a critical study of management practices and ideas of major organizations Haberberg & Rieple, 2008). Management is no longer seen as the savior to the problem facing organizations, but the problem itself.
Application of critical theory has enabled Apple to practice new management practices and depart from conventional ones. The management practices of many organizations have paused serious challenges to them, and some cases some have not succeeded, but the ones adopted by Apple have seen it overcome the problems it faced in the 90s.
Application and analysis
The structure of an organization can be analyzed from perspectives of modernism and critical theory. One way of presenting the organizational structure is to use a chart. According to Miles (2012), it has been a long held view that organizations require a hierarchical organizational structure to function. The technological and industrial development during the industrial revolution altered the way businesses are operating. During this period, non-tangible structures received limited attention.
The design of early organization was also influenced by the classical thinking of time. Such intellectuals like Galileo, Newton, and Descartes advocated for the belief that the world was the massive clockwork managed by conventional general laws. This line of reasoning encouraged the development of linear organizations and reductionism mentality. It underscored the significance of labor division and the organizational structure that was composed of linear compartments (Baligh 2005).
Towards the end of the 20th century, many organizations began to move away from larger organizational structures to slim structures in order to be more effective and flexible. This was in response to a rapidly changing business environment. One of the strategies used was connected with down-sizing their structures, but this resulted into more challenges such as the loss of expertise; thus, employees became insecure. Other results were the poor decision making, overworking of employees, cooperate infighting, and the rise of work related stress.
Down-sizing also proved to be an ineffective strategy as many organizations failed to take the advantage of restructuring and failed to put in place supportive systems. These changes failed to improve the effectiveness of organization. This was due to the lack of knowledge concerning the significance of relationship between the organizational structure and both internal and external systems and human behaviors, which showed a limited understanding of doctrines of the organization structure.
The process of re-engineering was another method adopted by organizations to improve the efficiency and to rid the organization of bureaucratic structures. Cost cutting, which is associated with the reduction of employees, became the best way of reducing the bureaucratic burden, but chief executive officers were still under control. According to Hatch & Cunliffe (2006), this was a chaotic era because many organizations were attempting to experiment with new approaches of outsourcing, the virtual types of organization and networking. It resulted into different types of organizational structures still in use. Bureaucracy is one of them, and it is made up of the hierarchical structure where the control and authority are exercised at the highest level. The organizational structure is made up of compartments based on the reductionist approach (Baligh 2005). Although delayering has taken place in most modern organizations, reshaping strategies, teamwork and job design are still bureaucratic by their nature.
Decentralization became a key strategy for most organizations. Corporate responsibilities were devolved into particular units and divisions. Strategic business units were given more independence compared to divisional units. The disadvantages of this strategy are that the strengths and advantages associated with large organizations have been lost as well as the links that facilitated sharing of competitive advantages.
Another organizational structure that arose is the de-structured form. Organizations that adopted this structure are described as the high performance companies that focus on creating knowledge, and are process based, ad hoc and borderless. These structures attempt to free themselves from bureaucratic tendencies. In the de-structured organizational design, the size, the clarity of roles, the specialization and control being the characteristics of a typical organizational structure have become less significant.
Organization structures grounded on the purpose and core values emerged courtesy of this transformation. Apple Inc is the company the organization structure of which has defied this transformation. The organizational structure of Apple can be summarized as centralized. Many organizations associated with the centralized organization structure in the 21st century have failed to be efficient, but Apple remains competitive and profitable despite this structure (Brunner et al. 2009).
Before its demise in 2011, everything in Apple revolved around its founder Steve Jobs. He had been termed a corporate dictator that made all critical decisions concerning the company. During his last days at the company, he concentrated on institutionalizing his style of doing business, mainly on secrecy, constant feedback and attention to every detail. This was a way of preparing the company for the future without him.
The organizational structure in Apple is simple and flat by its nature. It is headed by a Chief Executive Officer (CEO) being in the center of the organizational chart. It also has about 70 Vice Presidents being the head key divisions at the company (Segil 2002). The communication path is directly from the executives to junior level employees. There are no committees at the company; and the idea of general management is not favored. The only individual being responsible for profits and losses is the Chief Financial Officer (CFO). Most companies associate their profits and losses with the manager, but in Apple, this is the responsibility of the CFO alone. The ultimate result is the command and control structure in which the ideas originate from the top.
The company limits the divisions, and instead it favors its functions. Due to this approach, the company has been able to move fast despite its large size. Since the decisions are made by the executive, any changes made by the company are instantaneous. Another advantage for this approach is that the company can move quickly to grab some business opportunities compared with the companies that need deliberations by committees.
The specialization is a key management ingredient in Apple. Apple employees concentrate on the area of expertise; they seldom venture outside it. This is the way of having the best professionals in the right fields to perform the tasks they are best suited for. This departs from the general manager’s structure being common in such companies as the General Electric. In Apple, potential employees are invited to executive meetings to familiarize themselves with the decision making processes (Christensen & Raynor 2003).
For many years, Apple has been operating without the human resource department, which Jobs had considered unnecessary. This is a major departure from the management practice because all business organizations of such size as Apple have the human resource departments. He established the Apple University and hired Joel Podolny, a dean of Yale University School of Management, who was later named as the Vice President of Human Resources. This move appears to have been a preparation for the life without him. The organization’s structure of Apple was revolving around Steve Jobs, who dictated every aspect of the company. Since his death, the company has proceeded well; hence, he prepared the company for his absence by ensuring that the next crop of management that the company could have would be the company’s thought process (Segil 2002).
Organizations are continuously facing the challenge of choosing from many alternatives. A strategic choice is a key component of decision making; and by applying the concepts of critical theory a company is able to make the right strategies. The strategic choice is choosing among the strategies considered, i.e. the strategies that will meet the objectives of the business organization (Haberberg & Rieple 2008). The process of strategic choice involves concentrating on the selected options basing on selection factors and analyzing the alternatives based on these criteria and choosing the best strategy.
The process of strategic choice is initiated by creating a mental picture of the future state of organization and working on the reverse. This is achieved through the gap analysis, which is the projected performance of the organization minus the desired performance (Zeckhauser 1991). Strategic alternatives at the corporate level are composed of stability strategy, expansion strategy, combination strategy, and retrenchment strategy.
Expansion strategy becomes an option for the organization if the gap is large due to the expected growth of business opportunities. Stability strategy becomes an option when the GAP is narrow. Retrenchment strategy is an alternative if the past and expected poor performance is the likely scenario (Leleur 2012). Combination strategy is the most likely option in complex situations responsible for the performance GAP.
Some strategic choices at the business level are aimed at increasing the competitiveness of organization. The choices made are aimed at reducing the costs of business differentiating or focusing it. Before arriving at these choices, a clear understanding of risks associated with the industry and the benefits of each competitive choice are being necessary. Some of the key factors to be considered are customer groups, the functions and alternative technologies. Selection factors used to analyze the strategies choices are grouped into two: objective and subjective factors (Zeckhauser 1991). The evaluation of strategic choices involves combining both the analyses done based on these two factors.
Subjective factors are instinctive and vivid in nature. It handles the issues that cannot be dealt with the use of analytical models. These factors include: government policies, styles of decision making used, the attitudes towards risks, critical success factors, internal politics, the distinctive competence, and the commitment to previous strategic choices. Objective factors are founded on analytical methods and being the hard facts or data.
The consideration of government policies is important because it affects the business environment and future prospects of organizations. The consideration of commitment to past strategic choices gives to a strategist a starting point. The decision techniques adopted by strategists especially by the chief executive officers are an important factor in the strategic choice. The internal politics is another factor that affects strategic choices. It refers to the internal company relationships and power balance (Leleur 2012). The strategic formulation is a political process. Any active CEO will decisively affect strategic choices.
Timing and competition considerations are vital in the strategic choice. Timing refers to the time when to formulate and when to exercise the choices made, while the competition considerations are the steps taken by competitors. Some critical success factors represent the elements that are vital for the organization to succeed (Leleur 2012). It may be managerial or enterprise skills that must be given the priority and continuous attention. These factors are important for the present and future success of the company.
Distinctive competences are the activities or abilities that set the company apart from its competitors; therefore, they give a competitive advantage. Distinctive competence of the organization may lie in marketing, management style or technology.
Over the years since its inception, Apple Inc has made the strategic choices that have enabled it to stay competitive in the consumers’ electronics market. Although founded by Steve Jobs in 1976, he quit the company, but later rejoined it. Since then the company has not looked back. One choice the organization had to make was retaining the management style of Steve and his team. All major decisions in the company have been made by Steve and other visionary leaders(Afuah 2009). Although the management style of Steve is not conventional; the company chose to stick with it; thus, it has proven to be effective.
Another strategic choice the company has made is moving its manufacturing processes to the low cost countries. One of such countries is China (Ge 2008). This is a risk because it involves analyzing the politics of the host country and its government regulations. Although its main center involved in designing new products is based in California, most of its manufacturing processes are carried out in other countries. As a result, this enables the company to exploit the cheap and skilled labor.
Innovativeness has been the key strength of Apple. The statement by the Chief Executive Officer, Steve Jobs, of the fact that the company would be two years ahead of its competitors was true. Apple has been the leader in the mobile technology and electronics because it has pioneered in such products as the iPod, iPad, iMac iTunes and the Macbook (Gupta et al. 2012). Designing and selling these products involve some risks taking; and the company has made its strategic choice of introducing them and proving them to be successful.
The establishment of Apple stores has enabled the company to market its products directly to its consumers. At these stores, potential clients are able to experience and try Apple products before buying them. Apple stores are largely compared to traditional retail stores to avoid crowding. The company offers gift wrapping for the first buyers and the reservation of purchases made online without making any payments. The payment can also be made through its easy to pay transactions via the iPod and iPhone. These changes are revolutionary; and it sets it apart from its competitors.
Differentiation is another strategic choice made by the company. Apple products use the Operating System and hardware developed by the company itself. This enables the integration of its products, while its competitors develop their hardware. However, the operating systems running are developed by other companies (Afuah 2009). The examples are Samsung that uses the Android operating system developed by Google.
Apple has been able to create new products and at the same time to develop the markets for them because their markets are non-existent. The company has made the strategic choice of redefining its market. The company prefers developing new products than competing in the crowded and competitive market segments (Gupta et al. 2012).
The use of marketing messages that are user-centric and inspirational has seen the company developing a market base of the fanatically devoted users. The catch phrases used in Apple products arouse a magical emotion and a sense of wonder in its users. The examples of such phrase are the one used in the launch of the Macintosh and iPad, which are separated by the 26 year period. For the Macintosh, it goes like this, “Despite all the amazing technology and engineering genius we’ve put into Macintosh, the most impressive thing just might be what you can get out of it: Magic” and for the iPad as, “A magical and revolutionary product at an unbelievable price” (Afuah 2009). Such marketing phrases are consistent with users, and the company has managed to maintain them for many years.
The strategic decision to reinvent design standards has propelled Apple to new heights. The company focuses on producing the beautifully designed products and by all standards products such as the iMac and the Macbook Air being sleek and gorgeous (Ge 2008). Apple focuses on the entire product, while most of its competitors concentrate on the certain aspects alone.
Pricing has been another key strategy for the success of Apple. Apple products are priced two times higher than its competing products; but it still has a fans following (Gupta et al. 2012). This is explained by the justification the company gives by designing beautiful products that have the superior features and benefits that cannot be matched.
The success of Apple is built on its organization structure and strategic choices. Its management structure departs from the conventional management practice because it incorporates some elements of hierarchical and centralized forms of organization that allows top management to communicate directly to junior employees and keep a tight grip on the running of the company. Despite its size, Apple still operates like a startup company due to its management practice. Apple has also made the strategic choices that are very bold and has enabled to thrive in the competitive and rapidly evolving technology industry. Going by the past and current strategic choices made by the company, it will be the trendsetter for the mobile and consumer electronics industry.
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