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1. 7/13/2017 Apple Inc. Organizational Structure: Features, Pros & Cons - Panmore Institute
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A close-up of two Apple iPhones. Apple Inc’s organizational
structure supports extensive control but has limited exibility.
(Photo: Public Domain)
Apple’s organizational structure is one of
the factors contributing to the company’s
successful innovation. A rm’s
organizational structure can create
opportunities for business growth.
However, it can also impose limits on how
the rm develops. In Apple’s case, the
organizational structure is mainly a
traditional hierarchy, with some key
elements from other types of
organizational structure. The success of
the company is linked to innovation and the leadership of Steve Jobs, but its
organizational structure is partly responsible for ensuring support for such leadership.
Now, under Tim Cook’s leadership, Apple has made some small changes in its
organizational structure to suit market and industry demands.
BUSINESS, MANAGEMENT
Apple Inc. Organizational Structure:
Features, Pros & Cons
UPDATED JAN 29, 2017 | PAULINE MEYER
Panmore Institute

2. 7/13/2017 Apple Inc. Organizational Structure: Features, Pros & Cons - Panmore Institute
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Apple’s organizational structure is effective in supporting business performance to ensure
leadership in the industry. However, further changes in this organizational structure can help
improve Apple’s capabilities, especially in the area of rapid and creative innovation and design.
Features of Apple’s Organizational Structure
Apple’s organizational structure enables the rm to continue innovating rapidly. The
creation of new products like Apple Watch is linked to the support from the rm’s
organizational structure. The following are the most signi cant characteristics of Apple’s
organizational structure:
1. Spoke-and-wheel hierarchy
2. Function-based grouping
3. Product-based grouping
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3. 7/13/2017 Apple Inc. Organizational Structure: Features, Pros & Cons - Panmore Institute
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Spoke-and-Wheel Hierarchy. A bird’s-eye view of Apple’s organizational structure
shows considerable hierarchy. In the past, everything went through Steve Jobs’ of ce.
Jobs made all the major decisions. However, under Tim Cook’s leadership, this hierarchy
in Apple’s organizational structure has slightly changed. There is now more collaboration
among different parts of the company, such as software teams and hardware teams.
Apple’s vice presidents have more autonomy, which was almost absent under Jobs. Thus,
the company’s organizational structure is now less stiff, but still has a spoke-and-wheel
hierarchy where Tim Cook is at the center.
Function-Based Grouping. The upper tier of Apple’s organizational structure has
function-based grouping, which is an element derived from the functional type of
organizational structure. Each senior vice president who reports to Tim Cook handles a
business function. For example, Apple has an SVP for industrial design, an SVP for
marketing, and another SVP for retail. In this aspect of the organizational structure,
Apple’s top leaders address business needs in terms of function areas.
Product-Based Grouping. The lower tier of Apple’s organizational structure has
product-based grouping, which is an element derived from the divisional type of
organizational structure. Below the senior vice presidents, there are many vice
presidents for different outputs or products. For example, Apple has a VP for iOS apps, a
VP for iPad, and another VP for consumer apps. This aspect of the organizational
structure enables Apple to address speci c products or product components.
Advantages & Disadvantages of Apple’s Organizational
Structure
Strong Control. The hierarchy in Apple’s organizational structure supports strong
control over the organization. Theoretically, hierarchy empowers top leaders like Tim
Cook to control everything that goes on in the organization. Through the hierarchy,
function-based grouping and product-based grouping in this organizational structure,
Apple ensures that Cook and the senior VPs control all organizational processes.
Limited Flexibility. Apple’s organizational structure has the downside of low exibility.
Hierarchy typically prevents lower levels of the structure to exibly respond to business
needs and market demands. However, Tim Cook has already made slight improvements
by increasing collaboration among different parts of the rm. Still, Apple’s organizational
structure does not support rapid changes because everything must go through Tim Cook
and the senior VPs.
References

4. 7/13/2017 Apple Inc. Organizational Structure: Features, Pros & Cons - Panmore Institute
http://panmore.com/apple-inc-organizational-structure-features-pros-cons 4/4
Apple Inc. Form 10-K, 2014.
Apple Info.
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Lehman, G., & Haslam, C. (2013, December). Accounting for the Apple Inc business
model: Corporate value capture and dysfunctional economic and social
consequences. In Accounting Forum (Vol. 37, No. 4, pp. 245-248). Elsevier.
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