Name: Nguyen Lam Thanh Huyen (ID: BABAIU19035)

Class: OB_ Friday Afternoon, Period 7-9

Determining an organizational structure is one of the most important elements attributed

to a success of one business. Besides identifying the top management and the number of
employees that should be recruited, an organizational structure also emphasizes on the
influences of relationship forming and the process of achieving final outcomes. In such a
competitive and always-changing business world, it is essential for organizations to
flexibly restructure themselves when needed in order to adapt with management trends
and to maximize the productivity. Indeed, along with strategic ones, structural decisions
are those enabling top management of a business to sustain their organization’s growth
and prosperity.

Designing an organizational structure requires considerations associated with seven core

components. Division of labor is the first essential element in which individuals are
separated in doing tasks regarding to their specialized skills and experiences. Such
specialization enables an organization to efficiently maximize the values of their
employees. Departmentalization is another key attribution to a successful organization’s
structure that determines different ways to coordinate common tasks. Basically,
grouping activities into one specific department depends mainly on these following
segmentations: functions performed, type of product and service, basis of geography or
territory, process differences and type of customers. In the design of organizational
structure, chain of command was once an indispensable component describing the
forming of reporting relationships from bottom staffs to top management. Nevertheless,
due to the advancements of technology and the necessity of empowering employees,
chain of command has become far less important nowadays.

The next element of an organization’s structure is the span of control in which the total
number of employees directed by a manager is identified. A wide span of control seems
to be more favorable towards organizations compared to a narrow and small span due to
the reduction in managing costs, the enhancement in decision-making process and the
increase in flexibility. This is also consistent with the firm’s need of getting closer to
target market and the current trend of autonomy among employees. Another important
element in constructing an organizational structure is centralization and decentralization.
Whether an organization should follow either centralized or decentralized structure
depends on opposite viewpoints towards decision making process. Along with span of
control and centralization or decentralization, formalization is another determinant on
autonomy and discretion of employees in doing their tasks. The final element of
structure should be boundary spanning which describes the forming of internal and
external relationships among individuals in the workplace.

Apple Inc. had just become the world’s first publicly traded company to be worth $2
trillion in 2020, making it one of the most successful companies in history. There are
numbers of contribution to the Apple’s success story which could be known as Steve
Jobs- cofounder of the company, whose name is a symbol in the world of tech; the
iPhone revolution; the Apple’s outstanding services; and the brand itself. Among those
determinants, Apple Inc could have not been one of the biggest tech companies if top
management of the company implemented a poor organizational structure. In the
information technology industry, it is essential for top management to construct the
structure fulfilling the requirement of sustainable innovation practices as well as
effective and timely implementations in order to flexibly adapt to new market trends.

In the case of Apple, the company develops a hierarchical organizational structure in

consistent with specialized divisions of core teams, a few layers of management and a
centralized decision making. Regarding to work specialization, individuals are assigned
tasks associated with their strengths on relative knowledge, skills and experiences. To be
more specific, hardware and software engineering may require different types of labor to
effectively complete given tasks. Nevertheless, even though workers are subdivided into
separate jobs, Apple ensures that their employees will always be supported in timely
manner to improve the productivity. I believe such division of labor is indispensable
element in designing an organization operated in consumer electronics and technology
industries. In general, Apple Inc coordinates common tasks based on two primary
segments which are functions performed and type of products respectively. In terms of
functions performed, top management of Apple organizes its business into retail, design,
corporate functions, hardware, machine learning and AI, marketing operations and
supply chain, sales and business development, software and services, support and
service departments. Meanwhile, regarding to type of services, Apple places its major
outputs consisting of hardware technologies, hardware engineering (iPhone, iPad, iPod,
Mac), and software engineering (iOS, macOS) in consistent with the ways they
subdivide their employees. Both functional and product-based departmentalization
enables Apple to manage the flows of efficiency and fulfill the innovation requirements
associated with their diverse line of products.

Even though Apple is currently applying hierarchical structure, the company has a few
layers of management in which the autonomy and discretion of employees is enhanced
significantly. Such concern is also satisfied in another term regarding to a wide span of
control constructed by Apple Inc. Nevertheless, there was a controversy among U.S.
economists surrounding CEO Tim Cook’s span of control. Tim Cook first became the
leader of Apple Inc. in 2011 when there were only nine people authorized to directly
report to him. Since then, the number of his direct reports has experienced a rapid
growth as up to 2015, Tim Cook had to supervise seventeen managers according to a
newspaper of Business Insider. It is undeniable that a wider span of control may provide
organizations with various benefits such as reducing management costs, ensuring a
quick decision-making process, boosting the adaptability towards market trends and
customers’ demand, encouraging employee empowerment. However, this might affect
the effectiveness in holding a meeting between top management and lower-level
managers. If the number of individuals supervised by a manager continues to increase
rapidly to meet the above benefits, it is likely that each will be given just a couple of
minutes to engage in essential discussions regarding to organization performance. As a
result, the flow of efficiency and the degree of productivity will no longer be ensured
with consistency. Thus, as being Apple’s new selected CEO, I will narrow span of
control to the range of ten to fifteen employees only. By this way, employees can spend
more time reporting to their supervisors as well as sharing their initiatives associated
with relevant specialization in any discussions of the company.

Despite a few layers of management as well as a wide span of control construction,

Apple Inc is well-known for its highly centralized structure. Due to quick and rapid
changes of market needs, information technology is such a competitive and harsh
industry asking for many advanced innovation practices. Even though centralization
enables Apple Inc to sustain the high level of technology and avoid commission errors,
the company sometimes shows a low degree of flexibility in which implementations
hardly takes place at the drop of a hat. The authority in making decisions of Apple Inc
mostly belongs to Tim Cook and other top executives. Therefore, if I was a new CEO of
the company, I would decentralize the structure and give more power to head of
departments which enables them to implement changes in a timely manner in
accordance with current business needs and market demands. Along with centralization,
formalization is another determinant on autonomy of employees. In the case of Apple,
tasks are highly standardized and work process is covered by clearly defined procedures.
Meanwhile, employees are guided by set of job descriptions and organizational rules.
Though high degree of formalization may restrict the discretion of individuals in Apple
Inc’s workplace, it ensures that the company will always be on the right track towards
organization’s strategic goals and be able to gain competitive advantages against rivals. I
believe the design of highly formalized structure has enabled Apple Inc to maintain its
top position in the world of tech throughout many decades. The last element of an
organization’s structure is boundary spanning in which internal and external
relationships are formed. By far, Tim Cook has always encouraged all employees to
communication with those whose departments are not alike. The forming of such
relationships improves problem-solving process and enhances the implementation of
innovation practices in accordance with market needs in information technology
industry. As the company’s new selected CEO, I would probably design some job
rotation programs in which employees can have clearer viewpoint and experiences
associated with different functional groups of the organization.