The Organizational Design Analysis of Apple Inc. and Netflix, Inc.
The organizational design of any company is going to showcase how they are different from everyone else, how they differ in product, strategy, business techniques, administratively as well as the type of employees they hire. Characteristics in companies such as Apple and Netflix showcase just how unique a company can be behind the scenes. Subscribing to the massive video rental and streaming corporation or buying an iPhone in an Apple store doesn’t mean the company’s organizational design is completely apparent to the consumer. The best way to find out more about a company is to talk to their employees. Employees are the true structure and culture of any company.
Apple’s business motto refers to that fact that they strive to be the best and to deliver the best to everyone they come into contact with, “Apple’s success is based on creating innovative, high-quality products and services and on demonstrating integrity in every business interaction” (“Business Conduct”). In Apple’s words, they derive all exchanges with the public, with their vendors and suppliers on four simple principles, “honesty, respect, confidentiality, and compliance” (“Business Conduct”). Apple makes sure to structure all business through a model where they produce highly satisfied consumers by making them feel like they are well taken care of. Since Apple is such a large company, this means that the size of the structure has been increased to mirror the amount of structured relationships this organization needs.
Netflix runs on a combined motto and grew a company from out of copying other video rental companies, but also by exposing “a couple weaknesses in the traditional video rental business model. First is customer convenience” (Noren). Netflix pushed past the home grown video rental stores and modernized the way people could rent and stream movies, all without getting into the car. Netflix focused their sights on the fact that they “didn’t charge late fees” and had “unlimited (monthly) rentals”, all for a low dependable monthly fee (Noren). It’s like they took “all you can eat” buffets, mixed with video rentals and magazine subscriptions, and they turned it into a growing company (Noren). They marketed their specialization to the public and stood out from the rest.
Apple’s corporate structure and employee culture are very distinctive from other companies. For a company that thrives on customer service and satisfaction, the wellbeing of their staff is their number one priority. Each member of Apple’s team has “a distinct role to play” in which the employees understand what is expected of them and “how to deliver the level of service we’ve come to expect from this powerful brand” (Lagunas). Apple lets their employees know exactly what their job entails, how to do that job, and what job they could potentially work toward (Lagunas). Apple “designates” different levels of employees on the floor such as “experts” or “geniuses” to have their customers feel like they are speaking to the right person. Apple’s strong culture is what drives consumers to the store. They make the buying experience fun.
Netflix has an extremely unique “approach to talent and culture” in that they have realized that to be able to “attract” new talent, you must also be able to “retain and manage” that talent (McCord). Patty McCord is Netflix’s former Chief Talent Officer; she states that the “best thing you can do for employeesis hire only “A” players to work alongside them”. McCord also admits that even when you have a great employee, in an evolving company, sometimes those talents that an employee may have once had no longer seem to fit the company anymore and it’s time to let them go, but in order to show your appreciation to a great employee, you need a “great severance package” to go with them. At Netflix, they have no corporate paid time off policy in place, employees are told to choose appropriate time off lengths and to coordinate that time with the employees around them (McCord). They have gotten away from the formalities of a structured organization in order to keep a better corporate employee morale (McCord). Because of this attitude, they expect the best out of their employees, and most importantly, they expect the truth (MCCord). They expect employees to tell the truth about their own or another employee’s behavior and performance as well as expecting employees to always “act in Netflix’s best interest”, regardless of the situation (McCord). By keeping the employees engaged and making them feel valued, they are able to hold on to great employees.
Both Apple and Netflix have clearly stood out as large companies and each with their own separate organizational designs. Apple, being more structured and corporate minded, and Netflix being much more informal when it comes to set structure. Both companies have succeeded greatly in their endeavors despite the differences each company has in running their business. Apple and Netflix have clearly demonstrated how important their employees are to them, making sure to attract the right candidate for the job, and making sure to train, manage and continually keep the employee feeling appreciated with the job they do. While Apple has clearly integrated many administrative roles into their managers and personnel, Netflix has kept them separate and used a function based corporate design to separate all aspects of their informal corporate structure. There are advantages and disadvantages to both design elements, but in this case the profit margin for each company is only growing.
Works Cited
“Business Conduct: The Way We Do Business Worldwide.” Apple Inc, Oct. 2014. Web. 4 Dec. 2014.
Lagunas, Kyle. “HR’s Role in Apple’s Success.” First Reference Talks, 28 Mar. 2012. Web. 4 Dec. 2014.
McCord, Patty. “How Netflix Reinvented HR.” Harvard Business Review, Jan. 2014. Web. 4 Dec. 2014.
Noren, Eric. “Analysis of the Netflix Business Model.” Digital Business Models, Jan. 2013. Web. 4 Dec. 2014.
