How Apple is Organised for Innovation – A Literature Critique

Introduction

            The article “How Apple is Organised for Innovation”, authored by Joel M. Podolny and Morten T. Hansen, explores the organizational structure of Apple and its effects on innovation. (Podolny & Hansen, 2020) share valuable insights into Apple’s unique method of organisation structure which is distinctive to the conventional methods adopted by a company as big as Apple, challenging the prevailing assumptions regarding effective organizational structure. This literature critique aims to investigate the reason behind choosing an unconventional organizational structure and analyse the arguments put forth in the article critically evaluate the evidence and present an impartial assessment.

Summary

            The article begins by highlighting Apple’s extraordinary growth and success following Steve Jobs’ return to the organisation in 1997. It focuses on the lesser-known aspects of Apple’s organizational structure design that have contributed to its distinguished innovation achievements. Podolny and Hansen assert that Apple’s commitment to a functional organisation structure, where, senior Vice Presidents (VPs) oversee functions rather than products (Tasnim, 2018), has been an important factor in its innovation success. This unconventional approach challenges the prevailing assumptions regarding the effectiveness of a multidivisional structure for a company as big and complex as Apple.

            The authors support the rationale behind Apple’s functional structure by emphasizing two primary considerations. Firstly, the necessity of deep expertise in a rapidly evolving industry. Apple ensures that decision-making is entrusted to individuals with technical proficiency and in-depth knowledge of their respective areas, as a means to enhance the prospects of successful innovation.

            Secondly. This article sheds light on the importance of striking a balance between long-term innovation goals and short-term financial considerations. Within a functional structure, Apple can foster a culture that prioritises, innovation while managing financial imperatives. This is achieved by aligning individuals and teams with expertise in specific domains, to effectively collaborate and drive innovation in their expertise.  

            (Podolny & Hansen, 2020) support their case using the example of the iPhone 7 and the process that went behind achieving Apple’s first dual-lens camera with high focus on its Portrait mode which revolves around the Japanese concept of ‘bukeh´ or blurring the background in a picture, and how it was an innovation leap while also considering the marketing aspect of increasing its price and the prospect of endangering the well-established industry reputation.

Critical Evaluation

            By showcasing Apple’s groundbreaking features and innovations with the launch of every new product, the authors demonstrate the efficiency of the organizational model which emphasizes deep expertise and collaborative-decision making and that innovation thrives where people of different expertise work together. However, it can also hold back progress if the company grows to a point where the founder or CEO no longer has enough time to make all the decisions (Mind Tools, n.d.). Also, the focus on user-centric design resonates with the core principles of design management and ensures that user needs are the primary concern of all decision-making processes while also highlighting the importance of design leadership in driving innovation.

            The article’s arguments are supported by analyzing Apple’s historical organizational changes and drawing insights from their leadership practices. The authors gave a brief example of companies shifting from functional to multifunctional organisation to support their point, however, a more in-depth analysis could have been beneficial to deduce potential advantages or disadvantages of the companies’ approach.  While Apple’s approach is meritorious, it is important to consider the contextual factors unique to the company and its industry. Despite having some evidence and expert opinions, this article lacks empirical evidence to substantiate its claims fully. A comparative analysis of Apple’s organizational structure with other companies employing similar or different organizational models would have provided us with a more in-depth understanding of the innovation outcomes.

            Having a functional organizational structure puts a lot of pressure on the senior employees, to address, this, Apple has limited the number of senior positions to maximize effective collaboration.  The thing which sets Apple apart from its contemporaries is its expertise in decision-making policy, Since, all the departments are answerable through a P&L statement, the organisation tends to develop an inter-departmental lack of coordination. (Indeed Career Guide, 2023). However, the article could’ve benefitted by providing specific examples to support their claims which would additionally help us analyse the potential drawbacks or limitations of their approach.

Implications and Recommendations

            There are significant implications of the articles in the field of Design Management as the organisations can learn from Apple’s distinct functional structure and if possible adopt a similar approach to design integration, user-centric design and design leadership. Furthermore, encouraging cross-functional collaboration, empowering domain experts and fostering a culture of innovation can enhance the organization’s design and functional capabilities.

            Organisations should reassess their organizational structures to ensure the integration of design expertise and follow a user-centric approach which empowers experts in their field to make informed decisions by keeping the needs of the user as the primary factor which in turn works for the better of the organisation thereby cultivating design leadership skills within their companies. Additionally, organisations should create and promote an innovation-driven culture that values continuous improvement and encourages collaboration.            However, it is crucial to recognize that Apple’s approach may not be universally applicable. The efficiency of a functional structure model highly depends on the nature of the industry, the size of the company and how it operates. Organisations must assess their circumstances before reforming their traditional organizational models.

Conclusion

            The article “How Apple is Organised for Innovation” provides an insightful perspective on Apple’s organizational structure and its impact on fostering innovation. The authors put a compelling argument on the effectiveness of Apple’s functional organizational structure, highlighting the role of three factors – deep expertise, collaboration, and long-term innovation focus. While the article offers valuable insights for organisations trying to adapt to a fast-paced industry, it lacks empirical evidence and fails to address potential limitations. Although, it serves as a starting point for further research on alternative organizational models and their impact on innovation-centric organisations.