Apple: Organisational Culture, Leadership, and Organisational Change

Executive Summary

Apple is one of the iconic organisations associated with a charismatic but rather controversial leader, Steve Jobs. Tim Cook, who is now the CEO of the company, has to address the challenges the corporation faces in a highly competitive environment. Apple has a strong culture and effective organisational structure, but the company still has to undergo certain changes to enhance its competitiveness.

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Although Cook is characterised by the use of democratic leadership, the company lacks flexibility. Top-down decision making is the primary approach that hinders the organisation’s innovation capacity. Collaboration, communication, and transparency have become the top management’s priorities. In order to address the existing and potential challenges, it is necessary to focus on the development of a learning organisation where employees are free to gain knowledge, experiment, and innovate. The use of technology is an influential factor that can make the efforts mentioned above effective. Apple’s executives can utilise Kotter’s model of change to ensure the successful transformation of the company.

Introduction

Apple is one of the most famous companies that revolutionised the consumer electronics industry. After the death of its charismatic leader, Steve Jobs, Apple could see really dark times, and many people did not believe that Tim Cook, with his quiet and modest character, could ensure the further development of the organisation (Lashinsky 2015). Nevertheless, the corporation displays positive dynamics and increases its revenue. Apple is characterised by a strong organisational culture and quite a rigid hierarchical structure (Schermerhorn et al., 2019). One of the most considerable changes the company has undergone during the past years is associated with the democratic leadership style of its CEO. Collaboration and communication are seen as the major approaches to achieve established goals and improve the company’s performance.

However, the organisation still lacks flexibility, which is one of the most influential obstacles to innovation. This paper includes a detailed analysis of Apples’ organisational culture and structure as well as existing strategies to implement the necessary changes. Some recommendations regarding the methods to be utilised are provided at the end of the paper.

Organisational Structure

Mintzberg’s Framework

An organisational structure is one of the factors that can ensure companies’ competitiveness and considerable share in the market. It can be referred to as “the system of tasks, workflows, reporting relationships and communication channels that link the work of diverse individuals and groups” (Schermerhorn et al. 2019, p. 237). An organisational structure defines the functions, processes, procedures, as well as values and beliefs utilised at an enterprise (Vlcek 2016). Several types of structures exist and are widely used by different organisations operating in diverse business environments.

One of the typologies commonly utilised when evaluating companies’ structures is Mintzberg’s framework. According to this paradigm, structural organisations can be divided into a simple structure, machine bureaucracy, professional bureaucracy, division listed form, and adhocracy (Kumar 2015). These types of organisational structure differ in terms of prime coordinating mechanisms, decentralisation type, and the key part.

Apple’s Organisational Structure

Apple structure has evolved into a highly hierarchical organisation with the elements of simple structure, strong divisional form, and a certain degree of adhocracy (see Appendix A). Initially, all major strategic decisions were made by Steve Jobs, who articulated his vision and insisted on the implementation of his projects, ideas, and plans (Schermerhorn et al., 2019). This type of leadership is a characteristic feature of simple structures where one person holds complete control over all decisions and operations. Small companies and enterprises with a small number of employees are often characterised by this type of structure. Under the leadership of Tim Cook, the organisational structure of the corporation under analysis has undergone certain changes.

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The company’s executives have more autonomy when making decisions as compared to the initial years of Apple’s history. During the era of Steve Jobs, every procedure and decision were subject to his approval. This rigid control is now non-existent as strategic plans and decisions are developed in the course of discussions, but Tim Cook has the final word (Schermerhorn et al., 2019). At the same time, although some features of a simple structure remain, Apple has transformed into a new structural configuration.

Divisionalised form has become more viable in the new environment and under new circumstances. Companies with this kind of structure are divided into semi-autonomous divisions (Kumar 2015). The executives of different divisions of the company focus on the needs of the market, as well as the industries or sectors they are responsible for, and react accordingly. Apple has product-based divisions that concentrate on specific products (for example, iPhone, Mac, iOS, iPad, to name a few) (Apple leadership 2019). This configuration is more flexible than a simple structure and is regarded as more appropriate for innovative organisations, such as Apple (Kumar 2015). At the same time, truly innovative companies tend to choose adhocracy as their organisational structure.

Apple can be characterised by a certain degree of adhocracy, but it is rather minimal. Numerous cross-functional teams are formed to attain various goals and numerous complete projects (Schermerhorn et al., 2019). The communication and collaboration within these teams are characterised by horizontal hierarchy. Employees have a considerable degree of autonomy, which has a positive impact on creativity and innovation in the organisation.

However, it is important to stress that this autonomy is confined to the development of products and services, as well as some operations. All these ideas and projects are discussed with top management as strategic decisions are still made at the highest level of the company. The lack of flexibility is one of the weaknesses related to Apple’s structure that can result in serious issues in the future (see Appendix B). The transformations that have taken place in Apple show that the company is trying to address the new challenges of the market and use the available opportunities. The rigid hierarchy utilised by Steve Jobs became less strict in order to facilitate innovation and stimulate creativity, but these changes are rather insufficient.

Organisational Culture

Defining Organisational Culture

Organisational culture was quite overlooked in the first part of the 20th century, but it became regarded as important as organisational structure decades ago. It has been acknowledged that culture is one of the most influential factors leading to enterprises’ success, especially when it comes to high-technology industries such as Apple (Piao & Kleiner 2015). Organisational culture can be referred to as “the set of values, beliefs, norms and assumptions that are shared by a group and that guide their interpretations of and responses to their environments” (Ogbonna & Harris 2014, p. 668). Organisational culture is often seen as the facilitator of commitment to organisational goals and employees’ motivation. Different typologies of culture exist, and they can be applied to diverse companies.

Handy’s Framework

One of the most prominent researchers who explored organisational culture was Charles Handy. Handy believed that organisational culture was closely related to organisational structure, which is now one of the central ideas in the field (Hughes 2018). The researcher’s typology consists of four types of culture: power, role, task, and person culture. According to this paradigm, Apple can be described as a power culture with several elements of task culture. The former type of organisational culture is characterised by centralised decision making since one person (or a limited number of people) make major decisions (Hughes 2018). The latter is associated with a considerable degree of collaboration within different networks. People’s authority can be based on their position within the company, but it can also be rooted in employees’ expertise and charisma.

Deal and Kennedy’s Typology

Another typology can be instrumental in tracing the peculiarities of Apple’s transformation, which can be important for the evaluation of opportunities for further development. Deal and Kennedy suggested a framework that implied the focus on six cultural elements (Morden 2017). These components include values and beliefs, history, rituals and ceremonies, stories, figures, and cultural network. It is possible to employ this paradigm to consider Apple’s culture.

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Although Steve Jobs passed away years ago, he is still influencing the development of Apple in many different ways. All of the components of organisational culture mentioned above are closely connected with the iconic leader. Tim Cook often refers to Jobs’s methods of leadership and his vision in his public speeches. Apple’s values and beliefs are deeply rooted in Jobs’s vision and inspirational power. The focus on quality and innovation is one of the values that are shared by the companies’ employees.

Deal and Kennedy identified four types of cultures depending on the level of risk and the pace of feedback (Morden 2017). Apple can be characterised by the tough-guy macho culture with the increasing transit to the work hard play hard culture. The leadership of such companies has to make quick decisions and sometimes face considerable losses due to incorrect choices. Apple is one of the revolutionary companies that transformed the market of smartphones, but it also experienced some failures and substantial financial and reputational losses (Gibbs 2019).

The period of the leadership of Jobs is linked to the tough-guy macho culture, but under Tim Cook, the company is adopting the work hard play hard culture that implies less risk and faster feedback. The focus on these cultures is not solely confined to the leadership of Apple but also depends on the specifics of the industry. High-technology companies have to innovate constantly and ensure that their products meet and exceed customer’s demands and expectations.

Organisational Behaviour and Leadership

Research on Leadership

Another important factor affecting the development of companies and is critical during the period of change in leadership. Various approaches to leadership have existed and have been employed since the end of the 19th century. For instance, a scientific method was widely used in the first part of the 20th centuries, and some of its key components are still found in modern organisations (Afshari & Gibson 2016). At present, the focus is on relationships rather than operations. Researchers have described several leadership styles and approaches to leadership that are employed in the modern business world (Day et al., 2014).

It has been acknowledged that some of these models are appropriate for certain industries or markets while others can be winning under different circumstances. Antonakis and Day (2017) note that research on the matter has been associated with such areas as the nature of leadership, types of leadership, the impact of leadership on various phenomena and concepts (including organisational culture, behaviour, and change).

When it comes to organisational behaviour and change, the use of the most appropriate leadership style can result in the success of the company. Some of the most widely utilised leadership styles are autocratic, transformational, transactional, laissez-faire, and servant (Antonakis 2017). The autocratic leadership style is now regarded as rather ineffective as it is associated with numerous negative outcomes such as low morale or high turnover. Autocratic leaders make all major decisions and tend to make sure that all processes take place in accordance with their vision (Serrat 2017).

Such leaders provide instructions that are to be followed with a high degree of precision. In such an environment, many people are unable to explore their creativity. However, this style can also be appropriate in the periods when quick and winning decisions are necessary. Steve Jobs was an autocratic leader who demanded the highest level of commitment and performance. At that, he was also a charismatic leader, which made many people follow him in spite of the tough leadership methods he employed.

The Leadership Style of Tim Cook

Tim Cook’s leadership can be seen as a combination of transactional and transformational leadership. On the one hand, the CEO places a great value on performance, which is one of the primary features of transactional leaders. This leadership style is now widely utilised in many companies as it is associated with considerable employees’ input and commitment as well as high motivation (Antonakis 2017). This leadership style presupposes a considerable degree of supervision, but the leader also provides training and mentorship that are seen as an important part of management. Rewards for excellent performance and punishment for certain undesirable actions are common. These instruments are seen as primary motivational tools. Communication is one of the priorities of transactional leadership, but it is still associated with a considerable level of control and supervision.

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On the other hand, Tim Cook can also be regarded as a transformational leader who concentrates on collaboration and employees’ empowerment. In high-technology organisations, transformational leadership is becoming increasingly popular as it drives innovation and creativity (Holten & Brenner 2015). Transformational leadership can also be the most appropriate style in the period of change as employees can develop an effective plan collaboratively, and it will be followed due to people’s commitment to established goals.

This type of leadership also implies mentorship and guidance, but it is more collaborative compared to the transactional leadership style. Transformational leaders manage to motivate employees effectively and contribute to the development of a favourable working environment, which translates into people’s job satisfaction and commitment (Belias & Koustelios 2015). As the title of the leadership model suggests, the leader transforms people, procedures as well as culture.

Tim Cook was one of the transformational leaders who changed Apple’s culture in certain ways. Irrespective of the great pressure he had to endure, as well as misbelief in his leadership qualities, he contributed significantly to the development of the organisation (Davies 2019). Many people think that he is not as charismatic as Steve Jobs, but he is the leader who makes sure that people work at their highest capacity through the use of soft skills (Lashinsky 2015).

Tim Cook, with his mild manners, manages to motivate executives and employees at different levels of the organisation. This ability and his commitment to the organisational goals and culture make him charismatic in his own way. Soft skills include such personal competencies as communication capability and abilities to develop proper relationships with people (Cimatti 2016). Cook utilises this approach to leadership and tries to ensure the development of effective relationships and links within the organisation.

One of the characteristic features of his leadership style is Cook’s way of discussing work-related aspects. The CEO tends to ask numerous questions until he understands that the employee is completely aware of the issue and knows exactly what to do (Kahney 2019). This manner of communication facilitates employees’ empowerment and their creativity as they are not simply given instructions, but they are provided with an opportunity to come up with strategies and methods to address existing issues.

Culture Under Cook’s Leadership

As mentioned above, the organisation has a well-established culture where quality and the highest standards are the priorities of the company and every single employee. However, Tim Cook has brought some changes by making the company more transparent and oriented towards corporate social responsibility (Lashinsky 2015). Tim Cook encourages executives, as well as employees at other organisational levels, to tell their stories to the public, which helps the company build a positive image. Cook’s effort to make the organisation’s workforce more diverse is also remarkable and beneficial for the development of the favourable image. At the same time, Apple still faces several challenges that can be addressed through the introduction of changes to the organisational culture.

Organisational Change

Lewin’s Model of Change

Change is an indispensable part of any company’s lifecycle. Organisations try to adapt to new environments, so they undergo numerous changes. Researchers and practitioners have developed several models of organisational change and suggested certain frameworks to implement change successfully (Cameron & Green 2015). It has also been acknowledged that organisational change is closely linked to leadership and organisational culture. Apple has transformed considerably after the death of Steve Jobs, and now the company is facing challenges that may require certain innovations. Prior to suggesting feasible strategies and frameworks for the implementation of change, it is essential to consider approaches to its implementation.

One of the most commonly employed models of change is Lewin’s three-step model. Kurt Lewin is regarded as one of the pioneers in the exploration of organisational change and its effective management (Scharmer 2007). The researcher describes the major steps that need to be undertaken during organisational change. These phases include unfreeze, change, and freeze, and the model is regarded as rather easy-to-use (Hussain et al., 2018). Unfreezing implies the identification of the issue and making it a topic of discussion. Prior to implementing the change, it is essential to acknowledge the existing issues and make employees aware of the gaps to be filled in. People play a central role in this process as after employees feel the need for change, they start acting.

The stage of change presupposes a considerable amount of communication and collaboration between different individuals and divisions. Freezing is the final stage that makes the change viable and contributes to the development of new policies and the emergence of a new organisational culture. Every step is important and cannot be omitted as this will lead to adverse effects and the failure of the entire process (Bakari, Hunjra & Niazi 2017). In simple terms, it is critical to start with breaking the status quo and showing employees the existing gaps.

Importantly, not only did Lewin describe the stages of change, but he also revealed the exact instruments that could be used. For instance, his force field analysis can be instrumental in identifying the aspects to be changed as well as possible methods to use to attain the set goals (Cameron & Green 2015). The tool is utilised to trace existing driving and restraining forces. When these pressures are properly described, managers can develop effective plans to implement change. A similar approach to creating change is the use of gap analysis. The manager identifies the existing gap through the analysis of the current situation and the way it is different from the desired outcomes. The evaluation of these two states can lead to the creation of a plan for the effective implementation of organisational change.

Major Forces Affecting Apple

The forces field analysis of Apple’s current state unveils such driving forces as the increasing employees’ demand for more flexibility, growing demand for products (mainly iPhone), ineffective product development activities, and unmet demand due to insufficient distribution networks (Chikhale & Mansouri 2015). Restraining forces include the company’s leadership’s view on supervision, executives’ focus on certain products, and low flexibility.

The use of the gap analysis can also provide insights into the possible strategies to utilise. The current state of the company is characterised by insufficient flexibility, inefficient product development, poor distribution network, reliance on the outsourced labour force. The desired state is linked to high flexibility, successful product development activities, diversified product range, broad distribution network, and increasing automation. Key factors for change include strong leadership, high employees’ morale, high-profile professionals, and well-established organisational culture.

Kotter’s Model of Change

Apart from Lewin’s model, it can be advisable to consider the use of another framework. Kotter’s 8-step change model can guide organisational change, ensuring positive outcomes. Al-Haddad and Kotnour (2015) note that some organisations fail to change effectively since they are unable to implement every phase of the process effectively. Kotter’s model is seen as a holistic approach that addresses all major stages of change, which can be instrumental in the effective implementation of all the necessary procedures. Kotter outlined the following initial steps: the establishment of the sense of urgency, the development of a coalition, the creation of vision, the articulation of vision to employees. The next set of steps includes the empowerment of employees, planning, the evaluation and adjustments of the change, and its reinforcement. The use of this paradigm can lead to positive outcomes as all the aspects of the change process will be managed properly.

HR Strategies Supporting Transition

It is clear from this brief analysis that Apple needs changes to retain its place in the market that is characterised by fierce competition (see Appendix B). The transformations will be beneficial in several areas, but a single change model can be utilised to ensure the effective transition to a more effective organisational culture and practices. Chebbi et al. (2019) describe the case of a French company that managed to develop the culture of entrepreneurship effectively through Kotter’s model of change. Apple can also use some of the strategies that were utilised as entrepreneurial culture is essential for high-technology companies.

Apple has well-established communication channels, so it is possible to articulate a vision and create a sense of urgency rather quickly. As mentioned above, the development of cross-functional teams at Apple is becoming a common practice, but it should become a norm. Professionals from different departments and even divisions should collaborate in teams, which can foster employees’ creativity (Reilly & Williams 2016).

Although Tim Cook’s leadership is characterised by a democratic approach, the CEO still keeps supervising the major processes, which leads to delays and a lack of freedom. The company is criticised for concentrating on its selling hits and its inability to produce new products (Davies 2019). Therefore, the CEO should give more freedom to executives who, in their turn, should be more flexible with their subordinates as well. The organisational culture of Apple needs to acquire more flexibility through lesser control and more encouragement. The possibility to explore their creativity can be as important as monetary rewards or other benefits for employees.

Another important HR strategy to implement in order to achieve the necessary changes is the focus on learning and development. The creation of a learning culture is one of the highest priorities, as employees should be encouraged to self-develop and learn new methods to attain goals (Shin, Picken & Dess 2017). Top-down innovation cannot be an effective approach in the current situation, so Apple should develop an opposite framework. It is essential to invest in technology (Artificial Intelligence, decision-making facilitators, and other types of software) as it can enhance people’s capacity to create.

Overton and Dixon (2016) emphasise that people should be encouraged to learn and, at the same time, utilise new knowledge when working on projects. The emergence of a learning organisation can be facilitated by the measures mentioned above: collaboration, cross-functional teams, and the use of technology (Rana, Ardichvili & Polesello 2016). Employees’ motivation can also improve as they will develop new skills necessary for excellent performance. Clearly, monetary rewards should be utilised, but these methods should not be exclusive. Vertical and horizontal promotion, as well as the use of various benefits, can ensure employees’ commitment.

Conclusion

In conclusion, it is necessary to note that Tim Cook managed to become an effective leader who ensures the sustainable development of one of the leaders in the international market. His democratic leadership style and soft skills have made him an iconic figure. Under this CEO, the organisational culture has undergone certain changes. The company is now more transparent and flexible as executive and employees have more freedom to explore their creativity. Tim Cook does not try to make his subordinates follow his instructions but encourages them to explore their creativity and come up with new projects and solutions.

Nevertheless, additional changes are needed in order to make the company retain its leading position in a highly competitive environment. More flexibility and collaboration are necessary as Tim Cook is still the final decision maker. Top-down decision making is also a characteristic feature of the company, while the opposite approach can help Apple innovate. It is essential to focus on the creation of a learning organisation characterised by a high degree of collaboration in cross-functional teams. Employees have to learn and use their new knowledge and skills in projects, as experimentation regarding products, strategies, and procedures should be a norm.

Finally, the company’s leadership should ensure that the most advanced technologies are available to employees. Finally, the use of Kotter’s model of change can guide the transformations and the implementation of the strategies mentioned above. This model is based on Lewin’s iconic model but is more detailed. Apple has the necessary potential to innovate and remain among the leaders in the high-technology industry, but Tim Cook and other Apple’s executives need to introduce certain changes rather rapidly.

Appendix A

Apple’s Leadership Organogram.
Apple’s Leadership Organogram.

Appendix B

SWOT Analysis.
SWOT Analysis.

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