Apple’s Structure and Control Systems
Prior to 1997, Apple was facing structural and control system problems the most evidenced ones being ineffective product stocking, poor reward system, inappropriate corporate link, leadership and organizational change challenges (Lashinsky, 2011). To overcome these challenges the company came up with structural and control plans which comprised of recalling of Steve Jobs who would act as the new CEO, horizontal and vertical integration, outlet and sales force, innovative products and research and development. Through these action plans, Apple strived to enhance its value innovation, expand its differentiation strategy, implement the direct-selling model as employed by Dell Computers and commit itself to innovation.
Based on the challenges facing Apple before 1997, the company new strategic plans were mainly innovation based on the aim of remaining the market leader in the industry. Upon reviewing the case study, it is evident that the company used the traditional organizational structure. This is because the poor performance by the company influenced the board to recall Steve Jobs who had been fired in 1985. According to the company Board, Steve Jobs was the right person to return the company on its right track.
As per the above discussion, initially, Apple used traditional organizational structure and thus it was not appropriate for the implementation of its control systems plans. However, with the re-entry of Steve Jobs, the company partially shifted to innovation and differentiation strategies that were in line with product-based, function-based and spoke-and-wheel hierarchies on its existing organizational structure. For example, in 2008 the company had made sales of $32 billion and netted the profit of $4.7 billion. Alternatively, the company stock price had escalated from $6 to $170. Apple outstanding performance was an indication that the company was using the right control systems that could be aligned with its organizational structure.
Ghobadian, A., O’Regan, N., & Nandakumar, M. K. (2012). Business-level strategy and performance: The moderating effects of environment and structure. Management Decision, 48(6), 907-939.
Lashinsky, A. (2011, May 9). How Apple Works: Inside the World’s Biggest Startup. Retrieved from Fortune: http://fortune.com/2011/05/09/inside-apple/