To enable changes in a company it would need the necessity of skilled managers. Mangers would have to obligate themselves to allow delegate authority flowing through the organization. Many small and multinationals companies have been facing the same issue when it comes to organizational structure. As the organization starts to grow, structure needs to change within the organization. Due to changes in a growing organization, two major issues will be affected resulting in differentiation and integration. That is why it is very important to specify positions and roles and also task of integration.
In the time of evolution technology, Dell has reclaimed its name as one of the most known company of change. Change has helped Dell form its organization and its current structure of the business. The company is rapidly growing and continues to grow. The biggest problem that Dell is facing is competition. Dell aims to focus on pleasing its customers and to increase its services. But now Dell is mostly focusing on improving its communication in the organization itself. Their goal was not to concentrate to find short term solutions but rather to alter long term goals and objectives and to remain; Dell the most known, well respected and trusted technology partner in the technology industry.
Apple's keen administrative strategy has become a benchmark on its own in regards to its innovation and creativity. This has forced the company to adapt a very tight, secretive hierarchy structure, to insure its strength in the market against its main competitors. This obsession with secrecy became a double-edged sword however; it gives Apple a vital element of surprise in the marketplace, but puts the company in a never-ending cycle of internal "spy vs. spy".
Dell uses different combinations and acquisitions to expand their global reach and to increase their numbers of products that Dell offers, but also to acquire previous outsourced parts of the their business model. By facilitating different factors such as: using the internet as a direct sales medium and also to use the internet as a tool to manage their procurement and JIT manufacturing, Dell can easily reach the global market.
The most important business drivers are the internet and technology, consumer demand for innovation of new products and global presence and growth. The key success factors for Dells business drivers are: direct marketing, supply chain management, build-to-order and low-cost-leader. When it comes to Apple corporate strategy, they are more focused on international expansion, single business such as focus on mobile phone market and but also diversification which means trying to enter the music market and the online market.
As many multinational companies Dell has been facing problems and has come up with some diagnosis to these problems. Unclear accountabilities, lack of understanding of consumer behavior, strategy changing structure that have not been changed for years and also its reactive state of change, had made Dell suffer and seek for solutions.
We are going to focus on the organizational structure, how it is structured now and the advantages and disadvantages of different structures; matrix, front - back and geographic/market hybrid and give our recommendation based on the best alternative for Dell and compare it with Apple.
Both Dell and Apple follow the functional structure with the great advantages of coordination, communication, skill improvement, motivation and controlling. The disadvantages to this structure is that Dell has been facing are the limited growth under the existing structure, the limits to the number of products and the services and in addition to that, the coordination difficulties with its large size. Similar disadvantages to Dell as well as the internal problems that Apple been facing have put Apple to restructure its organisation.
Now we are going to look at the different alternatives and give recommendations of the best structure that will fit Dell and Apple. To begin with the advantages of the matrix structure are facilitator's transition, it balances the market and the local demands and finally it has a strong customer focus. But on the other hand the disadvantages are that the matrix structure is complex, costly, has a numerous reporting relationships, it would need multiple accountability - decision making and communications protocols and in the end the matrix structure would need more efforts in terms of efficient collaboration and coordination.
Secondly we look at the front/back structure. The advantages of the front/back structure are as follows: the front end is focused on specific customers and geography, it increases customer responsiveness and customisability, has a simplified reporting relationships, it offers inter-departmental communication fluid, it will benefit the products and the market structure, it will also have an opportunity for bundling products and finally it would have one face to its large customers. On the contrary the disadvantages on the front/back structure are rather few and involve conflict between front and back departments, leniency to duplicate marketing efforts and it has a large cost to set up. The processes that link the front and back units are important features of the front-back structure.
The third alternative of organizational structure is the geographic/market hybrid. The pros in this structure are maintaining a good geographic scope, it has a strong customer focus and the R&D is consistent and similar to the current structure it's easy to implement compare to the other structures. The drawbacks for this structure are the duplication of efforts, silo effect and the accountabilities.
The principles we have considered when evaluating each and one of the structures are: flexibility (deliver model), customer service focused, accountability, communications, cost and ease/speed of the implementation of the structure. The structured that scored the highest and which we recommend to Dell is the front/back organizational structure. How to address each principle is of course different but for example if we would have to take the flexibility criterion Dell would have to focus on the customer and the region. When it comes to the cost, Dell has already some of the positions in place but the development of the teams might be costly.
When it comes to Apple the new structure will lead to reduced breakeven point in the organisation, which Apple has been suffering from. It would in addition simplify the internal communication of Apples goals and objectives and indeed it would also allow Apple for greater consistency in their implementation. Furthermore Apple itself has created solutions to further contain the reoccurrences of problems which may tarnish the companies' public image. This was accomplished by minimizing the risk of leaks by taking secretive extreme measures. According to theNew York Times,"Some Apple workers in the most critical product-testing rooms must cover up devices with black cloaks when they are working on them, and turn on a red warning light when devices are unmasked so that everyone knows to be extra-careful, [former employee] said." This goes on to show the precautions that Apple has undertaken to further increase awareness amongst its employees of the sensitivity of information that travels within the organizational structure of the Apple hierarchy.
The strategic implications would lead to greater alignment with the emerging strategic direction customer driven and also the customer's needs would dictate the organisational direction and structure. All this will create a business environment that will allow for tailored work groups that will develop stronger customer relationships.