Apple Inc.

Case
Year 2020

Student Name: Ahmad Rida

ID: 7190061
Supervisor: Dr. Yusuf Fahs
Material: Management Organizational Theories

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 Table of Contents

Table of Contents
................................................................................................................................ 1
Table of Contents ........................................................................................................... 2
Definition of Management organizational theories ......................................................... 3
Benefits of organizational theory................................................................................. 3
Overview of Apple Inc.: .................................................................................................. 4
1. Organizational structure of apple …………………………………………….….4
2. Design and innovation …………………………………………………….……..5
3. The change that occurred on Apple company……………………………………6
4. Management techniques of Apple ……………………………………………….7
Organizational state of Apple Inc. in perspective to three scientists………………...…..8
1. Joan Woodward (Technical Complexity) +examples…………………….…...…8
2. Charles Perrow (Routine and Complex Tasks) +examples…………………..…10
3. James d. Thompson (Technologies and environment of an org.) +examples.… .11

Targets of change…………………………………………………………………….…..12
1. Human resources……………………………………………………………...…12
2. Functional resources………………………………………………………..…....12
3. Technological capabilities………………………………………………….……12
4. Organizational capabilities………………………………………………………12

Forces of change…………………………………………………………………………13

Resistance to change ………………………………………………………………..…...13

Types of change…………………………………………………………………………..13
Product life cycle (PLC)………………………………………………………….………14
Current and desired state of Apple………………………………………………………..15
Conclusion ……………………….……………………………………………….………16

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Definition of Management organizational theories:
The Organizational Theory refers to the set of interrelated concepts, definitions that explain the
behavior of individuals or groups or subgroups, who interacts with each other to perform the
activities intended towards the accomplishment of a common goal.

And also, the organizational theory studies the effect of social relationships between the
individuals within the organization along with their actions on the organization as a whole. Also,
it studies the effects of internal and external business environment such as political, legal,
cultural, etc. on the organization.

The term organization refers to the group of individuals who come together to perform a set of
tasks with the intent to accomplish the common objectives. The organization is based on the
concept of synergy, which means, a group can do more work than an individual working alone.

Thus, in order to study the relationships between the individuals working together and their
overall effect on the performance of the organization is well explained through the organizational
theories.

Benefits of organizational theory on both the organization and society at

large:

1- It helps boost economic potential in a society and help generate the tools necessary to
fuel its capitalistic system.

2- It makes it easier for a company to produce and thus incentivize firms to aggregate
and utilize more efficient methods for running their companies.

As an example of what Henry Ford did regarding the production of factories

where he implemented an innovative design by modifying factory production and
creating the assembly line, which is still used in many factories in contemporary
society.

3- Organizational theory studies organizations to identify the patterns and structures they
use to solve problems, maximize efficiency and productivity, and meet the
expectations of stakeholders.

4- help identify malicious forms of corporate practice and use them to highlight future
precautionary measures which lead to stronger government regulations and stronger
production-related safety mandates.
As an example, the nuclear accident at Three Mile Island helped determine
ways to ensure the prevention of similar incidents.

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 -APPLE-

Apple Company is one of the world-famous technical and computer companies, located
in the United States of America, and it is classified as a multinational company, and the
nature of its main business depends on specializing in manufacturing, producing,
developing, improving and selling computer software, smart phone devices and
computers.

 Organizational structure of APPLE:

Apple Inc.’s organizational structure contributes to effective and rapid innovation, which
is a critical success factor of the business in the information technology, online services,
and consumer electronics industries. Apple’s organizational structure is effective in
supporting business performance to ensure leadership in the industry, especially with
regard to competing against Google, Microsoft, IBM, Intel, Amazon.com, Sony, PayPal,
and many other firms.
The organizational structure of Apple is regarded by many as very robust as:

1- It enables managers to allocate resources efficiently in the departments in which

research is conducted, which lead the way to a successful product development.
2- Gain greater benefits by directing resources effectively and orderly among all
departments, gaining greater benefits with the use of fewer resources
3- It provides a broader range of control and a higher level of leadership for
organizational managers.
4- Putting employees in a decision-making location where it helps the organization to
identify the company's strengths and weaknesses, formulate appropriate improvement
plans and implement effective business strategies.

-Organizational structure of Apple Fig.1

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 Design and Innovations of Apple Inc.:
People think that the designers are handed this box and told, ‘Make it look good!’ That’s
not what we think design is. It’s not just what it looks like and feels like. Design is how it
works.” — Steve Jobs

The only thing that gives Apple the distinction and makes it highlighted are the invented
and improved products that are designed in a simple, stylish and elegant way, which
attracts the customers to their wide variety of products and lead Apple to be the most
powerful technological innovative company in the world.

As an example of what apple has invented in the couple years ago till now,
computing devices, core computer products, IMac, iPod, iPad, iBook laptop,
and iPhone cellphones.

One of their colossal approaches relies on their platform strategy to build new
products which in turn reduces their costs and increases their efficiency and
implementation. Apple attracted by emphasizing that the innovations and products
developed depend entirely on customer satisfaction from the aesthetic and
technological side of any product that adds beauty and also competition in the market.

-Organizational design of Apple fig.2

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 The change that occurred on Apple company (1998-2010):
It all began in 1997, when Jobs took apple in a tough shape with no clear strategy and
loss of millions of dollars every quarter

Jobs acted decisively. He cancelled 70 percent of Apple's products and laid off more than
3000 people, turning a $1 billion loss in 1997 into a $300 million profit in 1998. Then he
started work building products that became Silicon Valley legends:

 In 1998, Jobs unveiled the iMac.

 In 2001, Apple released the iPod music player.
 Jobs announced the iPhone in 2007. (Apple has sold 500 million iPhones).
 In 2010, Apple released the iPad, (Apple has sold 200 million iPads).

Jobs managed Apple as if it was a startup, so he turned it from a company under the
rubble to a company above the clouds. And the evidence shows the greatness of Apple
and its founder from 1997 (from zero to what it is now). Also we must highlight the
achievements of the company that brought back the company a large financial flows such
as the sound system Beats, Beats head and earphones, and Apple watches.

-Apple’s IPhone Profits (2008-2018) fig.3

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 Management techniques of Apple Inc.:

Apple’s business techniques are to design and to develop operating systems, hardware,
application software, and services to deliver superior new products and solutions which
are differentiated by their ease of use, seamless integration, and innovative industrial
design. These techniques are powered by strategy called “the blue ocean” that leads to:

a) Maintain loyal customers by focusing on customer service and improving the customer
experience

b) Maintain a high quality of product. This is one of the main reasons why customers choose
Apple’s product.

c) Develop products with both hardware and software which satisfy the business customer.
In order to capture customers in the business segment.

d) Develop new products. developing new product lines to satisfy new demand
and also avoid a price-war which is a certain effect of a highly competitive industry.

e) Re-value top leadership. This has been unsuccessful in the past when Apple, Inc. changed
its leader. This shows that the company needs to re-value its leadership more frequently
in order to avoid failures in strategy from its top executives.

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 Organizational state of Apple Inc. in perspective to three
scientists:
4. Joan Woodward (Technical Complexity)
5. Charles Perrow (Routine and Complex Tasks)
6. James d. Thompson (Technologies and environment of an org.)

1- Joan Woodward:

Joan Woodward’s primary contribution to org. theory was the idea that
organizational structure is contingent on the types of production technologies
employed by the firm. This idea became a foundation of contingency theory and
has had a sustained impact on the fields on innovation and management.

 This theory depends on three main types of production technology (small, large,
and continuous production), from which it branches 10 levels of technical
complexity.
Hence, and as we see now, Apple Inc. is using and directing its policies
toward not only for large-batch, which its work depends on mass and huge
production, but also for small-batches regarding unique and special
people.

For apple, the rates of demand on its devices require them to produce a huge
quantity with a variety of benefits that serve the human being. Apple is a pioneer
company in the world of technology and creativity in terms of design and beauty
and this reason leads to more production with each year. Statistics indicate that
Apple requires its suppliers in China to produce up to 80 million IPhone per half a
year with an increase exceeding 10% over the production of the previous year.

In addition, the successes of Apple depend on the workforce that exceeds 17,000
workers and around 100 production lines around the clock with a sophisticated
and technological tools and machines that will leads of production of more than
500,000 devices (IPhones, computers, PCs, headsets, earphones, screens, and
apple gadgets) during the day or more than 350 min/day).

Also, the intensive production of Apple devices depends on the sales and profits
that Apple earn in every sold device because the process depends on the law of
supply and demand, so the higher the demand for the products, it will result in
higher production of products and vice versa.

As an example: Apple last year launched IPhone XR that didn’t see the
light of profits or meet the global popularity, where news leaked about
sources in the production lines that Foxconn prepared 60 production lines
for the iPhone XR, but only 45 of them were used according to Apple's

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 request, as it said that it will not need to manufacture more quantities
currently due to the lack of popularity of the device,

But on the other hand, in 2017, Apple had launched the IPhone 7, and 7+,
that run profits on Apple, meaning that it received great admiration from
people and the fans of Apple, which led the company to increase the
number of production of this type.

Finally, in addition to its regular industries, Apple also manufactures devices for
important people, whether they are politicians, influential people, or even the
general public. It has a section to change traditional specifications with unique
characteristics. Among these people, there are:

Musk uses his own phone that was designed specially to him by Apple. It
has its own IOS, and is valued at $7000–$8000.

The 24K Gold Plated iPhone X (2000$) and a 24K Gold Plated Apple
Watch Series 3 (1300$). For unboxing therapy.
~~https://www.youtube.com/watch?v=JUi3psxB3QA~~

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2- Charles perrrow:

 Charles perrrow theory depends on task variability (the extent to which an

exception or unexpected situation encountered) and task analyzability (extent to
which search is required) to classify four types of technologies used in
organization: routine, craft, engineering and non-routine research technology.

The core of Apple’s business not only has an organic structure regarding ‘Design’ but
also it has some mechanistic characteristics with centralization regarding retail,
operation and sales departments.

Firstly, Apple has a high standardized tasks due to the same devices and products
(phones, computers, and tablets) that are distributed across 115 countries. However,
the only significant thing that varies between countries is the chargers, which have to
be adapted based on the power source standard the country uses.

Secondly, mutual adjustment for customers, Apple relies on a solicitation policy and
building a genuine relationship with their customers to reduce their churn.

Finally, Specialization is a key norm in Apple where employees perform a specialized

task and not outside of their functional area, pursuant to the rule of “command and
control from top”. So here we can say that the decision-making authority is a
centralized structure rather than a decentralized and a collaborative approach making
it individualistic and specialized work approach rather than an inclusive team
approach which means that the authority is in the hand of the CEO and managers that
report everything to him. Although apple has a flat structure but all the important
decisions come from only the CEO and his close managers.

Apple’s core is design and the organization develops high tech software, hardware
products with emerging electronic technologies (engineering production). This task
involves high task variability and low task analyzability. Hence, according to Charles
Perrow’s classification of technology, Apple’s uses the most complex and least
routine and non-routine research technology to come up with its products.

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 3- James D. Thompson:

 He argues that the technology determines the degree of task interdependence in

which two or more positions in an org. depends on each other to do their work.
He defines three modes of task interdependence:

1. Mediating (Pooled tasks)

2. Long-linked (Sequential tasks)
3. Intensive (Reciprocal tasks)

1. Mediating (Pooled tasks):

Pooled interdependence within the manufacturing sector involves groups of employees

working independently to produce a certain product.

As an example, workers of Apple company may use the same machines to cut
extra parts from the phone or welding and polishing metal parts with only one
machine. and also the company package the devices that were produced by many
employees into one box and ship those finished one to the same store. Also there
is machines that can produce only one item or one piece of the device like glass,
frames and even screws and nuts without the assistance of a second machine this
means that it doesn’t adopt a sequential production, but a manufactured item
from raw materials.

2. Long-linked (Sequential tasks):

Assembly lines are an example of the interdependence of serial or sequential tasks in a

manufacturing company. In an Apple production lines and we speak here on Mac Pro.
One of the employees can build the iron frame of the device before passing it to a second
worker where he puts the motherboard, then to third worker adding buttons and screws
then finally to the fourth worker that makes sure that the device works efficiently and in
high quality. The production process must follow a logical sequence since you cannot
add the screws until you actually add the motherboard and all the small details.

3. Intensive (Reciprocal tasks)

In a reciprocal relationship, no one person or business unit can manufacture an item

without the involvement of another person or unit. But in apple this type of tasks can’t be
obtained because everyone in this company has its own specified work.

For example, iPhones, iPads, or even Apple Macs, when they leave the area
that is designated for installing glass screens, this means that this step is
finished and cannot be reversed, but must move to a new step and a new
worker.
About how Apple phones are made (mediating and long linked)
https://www.youtube.com/watch?v=OdjX2RUni0M

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 Targets of change:
1. Human Resources:

The distribution of power is less among employees and also between managers and
stakeholders because the power and authority is given to those individuals who the CEO
believes and trust in. also Former employees in apple reveal that there is high tension
working culture with paranoid management and long working hours in apple.

 Change: Their has to be equality among the employees with no discrimination

between employee and another, also the employees should be given opportunities
and chances to express their opinion and the intensity of working hours should be
mitigated so that clashes wouldn’t occur between workers and managers.

2. Functional resources:

Recently, specifically last year, when Apple started manufacturing IPhone XR but a days
later the device didn’t get the attention of people and especially the fans of Apple, which
led the company to stop the work lines that result in exclusion of employees.

 Change: the company must next time when manufacturing a new phone to take
the evaluations of its fans about this device, so it can see how much they like this
device before releasing it on the market, so that the company won’t lose lots of
money and the workers won’t lose their work.

3. Technological capabilities:

On the technological level, I don’t recommend replacing or modifying it since Apple uses
the latest programs, technologies and high-tech and modern products to reach and invent
its latest and most competitive devices on the market.

4. Organizational capabilities:

Before the invasion of Corona virus or Covid-19, the number of customers thirsting for
Apple phones and devices a day exceeded the expectation, but now all Apple stores and
showrooms are closed in the whole world, resulting in a decrease in the number of buyers
and the loyal people of Apple products.

 Change: Apple should set a new foundations regarding this issue by starting to
put its devices on a global platform controlled by her, which ought to give any
small detail regarding internal and external phone details via the 3D technology to
the anybody. Also this technology enables him to see all the corners and mysteries
of the phone, which leads to get higher number of fans and increases the
competition with its competitor (Samsung).

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 Forces for change:
-As an example of forces of change:

Apple faces the strong force of competitive rivalry or competition, especially

from its new competitor Huawei, in terms of phones. This new brand has
weakened the power of Apple phones on the competitive scene where people,
including Apple fans, have started to change or replace their Apple phones with
Huawei phones due to several factors, the most important of them: aggression in
rapid innovation, aggressive advertising, imitation and low or moderate cost of
Huawei phones compared to Apple phones, which led to a decline in the
purchasing power of people with respect to Apple phones and the replacement of
their Apple phones Huawei one of what they have stronger, faster and less
expensive feature.

From this standpoint, Apple must go towards a policy of lowering the prices of its
devices and intensifying advertisements on all social platforms to entice the buyer, which
subsequently leads to the expansion of the company’s scope and innovation for efficient
and high quality devices, so it overcomes its competitors in the technology market.

Resistance to change (cause):

In terms of resistance, the level and functional strength of some Apple board members is
seen as an obstacle between its prosperity and its weakness or decline. Among these
managers who cling to power and struggle to survive and not step down due to their
unwillingness to stop their projects and plans, which leads to the deterioration of the
company and lower production, which in turn leads to lower sales, increasing losses and
losing Apple's position as the largest competitor in the market.

Types of change:
We can apply evolutionary change to it, by setting new foundations and rules without any
major change in the nature of the company or its activity so that we can apply an
incremental change with slowly progressing that can serve the workforce as well as
managers in the company by motivating employees, providing training courses for them,
reducing working hours and giving them time they need to adapt to new practices so that
employees can be assured. Where global studies have shown that the sympathy and
reassurance -that Apple lacks for its employees- works to improve mood, leading to
increase productivity and efficiency of employees and their constant desire to work. This
change can include advanced devices that continuously improve the quality management
process and increase efficiency so that Apple step-by-step reaches levels that its
competitors in the world lack to reach.

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 Product life cycle (PLC):
Every good and service that enters the market goes through a product life cycle. The
stages in the product life cycle are introduction, growth, maturity and decline.

 Recently, Apple has introduced an iPhone 11. Because this is a new product, it is
in the introduction stage. This stage is characterized by few sales and slow
growth.

 Apple watches and AirPods on the other hand are in the growth stage of the
product life cycle. This stage is characterized by many sales and increasing
market share growth.

 Apple iPhones however are in the maturity stage of the product life cycle. This
part of the life cycle involves a slowing of total industry sales and revenue.

 Finally, Apple has some products that are in the decline stage. Apple’s iPods and
IPhone (4,5,6) are definitely in this stage. The decline stage occurs when sales
drop because of the great competitiveness in the market, for example, Samsung
today, when it produces about five types of phones (S10, 10 +, Galaxy Folder,
A20 and A20 +), it is likely that Apple will compete with the same diversity,
which gradually leads year after year to a decrease in the price of older models
and a rise of the new ones.

Current and desired state of Apple Inc.:

Today Apple is considered as the most successful and high-tech companies in the United
states and around the world specializing in electronic equipment with its best-known

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products including Apple and Macintosh computers, iPod, iTunes, IPhone, IPad, Airbods
and IWatches. Apple nowadays enjoys a reputable and unmatched brand image around the
globe where it was valued at $263.795 billion in 2019, making it the highest valued brand
in the world and also it has more than 98,000 employees around the world in 15 different
countries.

-Differences of Apple profits in second quarter of year (2018 and 2019)

As for the future of Apple, the profits it earns indicate the duration of its ability to survive
and continue, but with the tragic situation that we live in light of the spread of Covid-19
virus, the company's profits will decrease due to the general closure that the countries are
exposed to, and as we see now that Apple has postponed the launch of its new phone
because of the deteriorating conditions And the closure of its factories, which can lead later
to lower fans and increase losses.

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 Conclusion:
Apple is a Multi-National Corporation that affects and can be affected by the market
environment. As you can see from this project, initially, if we wanted to know Apple
closely, through the principles and policies that were developed and created by each
doctor, it can be said that Apple is, according to Dr. Woodward, one of the companies
with small and large batch that specialize in mass production such as iPhones, and small
amount rare devices to unique people. Regarding Perrow’s theory, Apple has not only an
organic structure but also it has some mechanistic characteristics with centralization regarding
retail, operation and sales departments. And for Thompson, Apple apply 2 types of tasks;
mediating (pooled tasks) and long-linked tasks (sequential).

As for the changes that must occur, including what is at the level of employees and their
lives threatened with destruction and new devices that were not popular and finally
decreasing of buyer’s number due to the spread of Covid-19 virus. Therefore, an
evolutionary change must be made gradually and in incremental step-up without affecting
the activity of the company, but it can’t be done with the presence of managers who cling
to power and struggle to survive and not step down due to their unwillingness to stop
their projects and plans.

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