Apple’s ‘Functional’ Organization Structure: The Reason It May Not Do Well In Services



Apple’s products  cut across the organization in a way that enforces coordination among the various functional teams. This functional org structure has been a key driver behind its ability to create integrated products that deliver a superior user experience.

“We think we have the right architecture not just in silicon, but in our organization, to build these kinds of products.”

– Steve Jobs

But, now as Apple strives to get into Services, the problem is that Apple simply isn’t set up organizationally to excel there (e.g. because the integration of different teams is required more for Products than for Services).

Key Insight

A Products business and a Services business each require completely different business structures and incentives. So, one org. structure will not work for both!