Apple is organised by function, not by product: senior leaders run hardware, software, services, operations, marketing, retail and finance across every product, and the CEO is the only seat where all of them meet. The design dates to 1997, when Steve Jobs removed the business-unit general managers and put the whole company under one P&L. Since 1 September 2026 the CEO is John Ternus, with Tim Cook as executive chairman.
Senior vice presidents are in charge of functions, not products. Apart from the CEO, Apple runs without conventional general managers who control a product from development to sales (Podolny and Hansen, 2020).
02
One P&L since 1997
In his first year back as CEO, Jobs laid off the general managers of all business units, put the company under one P&L and merged their functional departments into one functional organisation.
03
Experts leading experts
Managers at every level are expected to have deep expertise in their function, immersion in its details, and a willingness to debate other functions collaboratively.
04
Insulated from short-term targets
Bonuses of senior R&D executives are based on company-wide performance, not on the costs or revenue of particular products, so product bets are judged on value to users.
What changed in 2025-26
A hardware engineer becomes CEO
On 20 April 2026 Apple announced that John Ternus, then senior vice president of Hardware Engineering, would become CEO on 1 September 2026, with Tim Cook becoming executive chairman and Arthur Levinson lead independent director.
Hardware under one chief
The same day Johny Srouji was named chief hardware officer, adding Hardware Engineering, which Ternus had led, to the hardware technologies organisation behind Apple silicon. Two hardware functions now report through one leader.
AI folded into the functions
In December 2025 Apple said John Giannandrea would step down as head of Machine Learning and AI Strategy. AI research went to a new vice president of AI, Amar Subramanya, reporting to Craig Federighi, and the rest of the group moved to Sabih Khan and Eddy Cue. As we read it, AI became part of existing functions rather than a separate unit.
New operating and legal leaders
Sabih Khan became chief operating officer in July 2025. In December 2025 Apple said Jennifer Newstead would become general counsel in March 2026, with Government Affairs combined into her role.
Who leads what (Apple leadership page, October 2026)
John Ternus
RoleChief Executive Officer
What it coversIntegrates every function; CEO since 1 September 2026
Johny Srouji
RoleChief Hardware Officer
What it coversHardware Engineering plus hardware technologies such as Apple silicon
Craig Federighi
RoleSVP Software Engineering
What it coversApple's software platforms; the vice president of AI reports to him
Sabih Khan
RoleChief Operating Officer
What it coversOperations and supply chain; environment and social initiatives
Eddy Cue
RoleSVP Services and Health
What it coversApple's services business, plus Health; took part of the former AI group
What it means for you
If your product depends on deep technical bets, give decision rights to the people with the most expertise in each domain.
Pay senior builders on company results, not on one product's P&L, when you want them to share work across products.
Expect a functional structure to need strong integration at the top: decide who settles disputes between functions.
When you add a capability such as AI, ask whether it should be its own unit or part of every function's job.
Investors: read leadership changes as structure changes. Who reports to whom shows where Apple is placing its bets.
The Business Engineer lens
A functional organisation concentrates expertise but makes the CEO the integrator, which is why Apple’s 2026 succession matters beyond one person. In the AI economy, the question is whether AI is a separate function or part of every function; Apple’s 2025-26 moves point to the second.
A functional structure: leaders run functions such as hardware, software, services, operations and retail across all products, and the CEO is the only role where they all meet.
Who is Apple's CEO?
John Ternus has been CEO since 1 September 2026. Tim Cook, CEO from 2011, became executive chairman of the board.
Why did Apple choose a functional structure?
Steve Jobs believed business units with their own P&Ls had stifled innovation, so in 1997 he put the company under one P&L and one functional organisation.
How many employees does Apple have?
About 166,000 full-time equivalent employees as of 27 September 2025, according to its annual report for fiscal 2025.
Correction (11 Oct 2026): an earlier section on this page, “Apple Org Structure in the AI Era”, made unsourced claims and predictions; it has been removed.
Apple's organizational structure is a functional organization model where departments are organized by expertise rather than product lines.
Corporate Leadership
Type of StructureHierarchy
Structure DetailsApple’s corporate leadership operates within a hierarchical structure. It includes the CEO, senior executives, and various departments such as hardware engineering, software development, design, marketing, retail, and finance.
Advantages– Clear lines of authority and accountability. – Efficient decision-making process. – Well-defined roles and responsibilities.
DrawbacksPotential slow decision-making due to multiple levels of approval. Limited flexibility in responding to rapid changes in the technology industry.
Hardware Engineering
Type of StructureFunctional Structure
Structure DetailsApple’s hardware engineering functions follow a functional structure, with specialized teams responsible for hardware development in areas like iPhone, Mac, iPad, and wearables.
Advantages– Specialized expertise in hardware development. – Efficient management of hardware-related activities.
DrawbacksPotential challenges in cross-functional collaboration between hardware and software teams.
Software Development
Type of StructureFunctional Structure
Structure DetailsApple’s software development functions, including iOS, macOS, and other software platforms, also follow a functional structure. Teams focus on developing and maintaining software for Apple’s products.
Advantages– Specialized expertise in software development. – Efficient management of software-related activities.
DrawbacksPotential challenges in cross-functional collaboration between software and hardware teams.
Design
Type of StructureFunctional Structure
Structure DetailsApple’s design department follows a functional structure, with design teams responsible for product design, user interface (UI), and user experience (UX) design across various product lines.
Advantages– Specialized expertise in product design and user experience. – Consistency in design philosophy across products.
DrawbacksPotential challenges in integrating design considerations across different product categories.
Marketing and Sales
Type of StructureFunctional and Matrix Structure
Structure DetailsApple’s marketing and sales operations have elements of both functional and matrix structures. While there are specialized marketing teams, cross-functional collaboration is essential to coordinate product launches and marketing campaigns.
Advantages– Specialized marketing expertise. – Collaboration between functions for effective product launches.
DrawbacksPotential complexity in reporting relationships and decision-making in a matrix structure.
Retail
Type of StructureDivisional Structure
Structure DetailsApple’s retail operations are organized with a divisional structure, with Apple Stores grouped by regions and markets. Each division has its own leadership team responsible for retail strategy, store operations, and customer experience.
Advantages– Tailored approach to different markets and regions. – Quick adaptation to local market conditions. – Specialization in retail operations.
DrawbacksCoordination challenges between regional retail divisions. May result in variations in store strategies and customer experiences across regions.
Research and Development
Type of StructureFunctional Structure
Structure DetailsApple’s research and development activities follow a functional structure, with specialized teams focused on research in areas like artificial intelligence, machine learning, and hardware innovations.
Advantages– Specialized expertise in research and technology development. – Efficient management of R&D activities.
DrawbacksPotential challenges in aligning R&D efforts with the broader business strategy.
Human Resources
Type of StructureFunctional Structure
Structure DetailsThe Human Resources function at Apple operates with a functional structure, focusing on HR-related functions such as talent acquisition, training, and employee relations. HR teams handle HR matters across the organization.
Advantages– Efficient management of human resources and talent-related activities. – Specialized expertise in HR functions.
DrawbacksPotential challenges in cross-functional collaboration with business units. May not align with specific business divisions.
History of Apple
Apple Business Model
Understanding the Apple organizational structure
Former CEO Steve Jobs is credited with transforming Apple from a struggling company to one dominating the world with its innovative products.
How exactly was this accomplished?
When Jobs returned to Apple in 1997, the company had a typical product-based structure divided into business units with their own P&L responsibilities. However, Jobs noted that this approach hampered innovation.
He laid off each business unit general manager and put the entire company under one P&L, effectively combining unrelated units into one functional organization. Under this new arrangement, product managers could work insulated from short-term market pressures. They were also encouraged to share their work with other divisions to ensure innovations were not duplicated.
Jobs argued that the function-based structure required two crucial elements. First, product managers had to be product experts and not rely on others for decision-making expertise. Second, senior research and development personnel should receive a bonus based on the performance of the entire company โ not simply on their own products.
Today, the company combines the functional and hierarchical structure instituted by Jobs with the somewhat more collaborative approach implemented by successor Tim Cook.
But there are also some other important characteristics to consider. Following is a look in general terms at the Apple corporate structure.
Hierarchical mixed with functional
Apple is a predominantly hierarchical organization. In the past, every strategic decision would have to go through Jobs. When Cook took the helm, however, he introduced a more collaborative approach between managers and employees.
To address business needs in the context of functional units, Apple employs several senior vice presidents. For instance, there are senior vice presidents for worldwide marketing, design, finance, and retail, among others. This level of management has to report to the CEO but is given more autonomy than they were under Jobs.
There are currently 10 SVPs in Appleโs executive leadership team
Katherine Adams โ SVP and General Counsel.
Eddy Cue โ SVP Services.
Craig Federighi โ SVP Software Engineering.
John Giannandrea โ SVP Machine Learning and AI Strategy.
Greg Joswiak โ SVP Worldwide Marketing.
Sabih Khan โ SVP Operations.
Luca Maestri โ SVP and CFO.
Deirdre OโBrien โ SVP Retail + People.
Johny Srouji โ SVP Hardware Technologies.
John Ternus โ SVP Hardware Engineering.
A functional structure is more suited to the holistic culture of a compact start-up and is uncommon in a company the size of Apple. But this approach ensures there is no competition for resources between product division heads. Furthermore, it allows Apple to neglect short-term financial targets when developing resource-intensive products.
Product-based grouping
Apple also incorporates a product-based leadership model embodying the divisional approach.
Ultimately, this helps the company address specific product components before releasing them to the market. It also helps Apple evaluate marketing or manufacturing requirements.
Group and division collaboration
Under Jobs, hardware and software teams would have to run their ideas by the CEO with little interaction between the teams themselves.
The development of each Apple product now involves an intensive collaborative effort between various groups and divisions. In other words, some degree of functional rigidity has been sacrificed to enable creative and efficient innovation.
Comparison with Top Related Companies
Samsung: Samsung utilizes a more complex structure, combining elements of a hierarchical corporate structure with diversified business units that operate like separate companies under the broader corporate umbrella. Unlike Apple, which centralizes decision-making and maintains a unified brand across all product lines, Samsung’s divisions like electronics, heavy industries, and life insurance operate more independently, which can lead to greater agility but also potential inconsistencies in brand and strategy.
Microsoft: Microsoft also employs a hierarchical structure but with a strong emphasis on both function-based and product-based groups. This matrix structure facilitates better integration and cooperation between different functions and product teams, enhancing Microsoftโs ability to innovate across its software, hardware, and cloud platforms. In contrast, Apple’s structure, while also integrating product-based groups, tends to maintain stricter divisional boundaries to focus deeply on product quality and design coherence.
Google (Alphabet Inc.): Google operates under a hybrid structure since its reorganization into Alphabet Inc., where it separates its various ventures into different entities under a corporate umbrella. This allows high levels of innovation and flexibility within each entity, such as Google, Waymo, and Verily, while maintaining overall strategic alignment at the Alphabet level. Apple’s structure is more centralized compared to Googleโs, focusing on integration and control across its product lines to ensure consistency and efficiency.
Similarities and Differences
Similarities: All these companies employ hierarchical elements within their structures to ensure clear lines of command and control. Each company also recognizes the importance of integrating various functions to promote efficiency and innovation.
Differences: Apple maintains a more centralized control with strong product-based divisions compared to Samsungโs conglomerate model with independent business units. Compared to Microsoft and Google, Apple employs less flexibility in cross-functional collaborations, focusing more on maintaining control and consistency across its product lines.
Implications
Innovation and Control: Apple’s structure supports strong control over its product development processes, ensuring consistency and high-quality output, which is crucial for its brand reputation. However, this may limit its ability to innovate rapidly compared to a more flexible structure like Googleโs or Microsoftโs.
Responsiveness to Market Changes: Appleโs centralized and somewhat rigid structure may slow its responsiveness to market changes compared to Samsung or Google, whose more diversified and flexible structures allow for quicker pivoting and adaptation.
Efficiency and Specialization: Apple’s focus on product specialization and a streamlined hierarchical structure allows for efficient execution and strong specialization within product lines. This contrasts with the potential for inefficiencies or dilution of focus in more complex or diversified structures like those of Samsung or Google.
Key takeaways
Former CEO Tim Cook relaxed the highly rigid hierarchy present under Jobs. Instead of routing every decision through the CEO, divisional senior vice presidents and product managers are now given more autonomy.
Collaboration between divisions and teams is now a non-negotiable part of every Apple product. This creates an environment where creative innovation has a chance to thrive.
Key Highlights
History and Transformation: Former CEO Steve Jobs played a pivotal role in transforming Apple from a struggling company to an innovative industry leader.
Product-Based Structure Transformation: When Jobs returned to Apple in 1997, he restructured the company from a product-based approach into a functional organization under a single P&L. This allowed for more innovation and reduced duplication of efforts.
Key Elements of New Structure:
Product managers became experts in their domains.
Senior R&D personnel received bonuses based on overall company performance, encouraging innovation beyond iPhones.
Hierarchical and Functional Mix: Apple’s structure combines a hierarchical approach with functional roles. While Jobs previously made most strategic decisions, Tim Cook introduced a more collaborative approach between managers and employees.
Senior Vice Presidents (SVPs): Apple has several SVPs who lead functional areas such as marketing, design, finance, and operations. These SVPs have more autonomy than before but still report to the CEO.
Product-Based Leadership Model: Apple’s structure also incorporates a product-based leadership model. Product managers report to SVPs and lead divisions responsible for specific product components, facilitating focused development and evaluation.
Vice Presidents (VPs): Around 100 VPs are chosen from Apple’s extensive employee pool. VPs have been appointed for various areas, including Maps, Silicon group, and engineering under Services.
Group and Division Collaboration: Apple’s approach has evolved from limited interaction between hardware and software teams under Jobs to intensive collaboration between divisions and groups. This flexibility fosters creative and efficient innovation.
Autonomy and Innovation: Tim Cook’s changes brought more autonomy to divisional SVPs and managers, fostering an environment where creative innovation can thrive.
Balancing Hierarchy and Innovation: Apple’s structure combines traditional hierarchical elements with a focus on innovation through collaboration and functional specialization.
In a functional organizational structure, groups and teams are organized based on function. Therefore, this organization follows a top-down structure, where most decision flows from top management to bottom. Thus, the bottom of the organization mostly follows the strategy detailed by the top of the organization.
In a flat organizational structure, there is little to no middle management between employees and executives. Therefore it reduces the space between employees and executives to enable an effective communication flow within the organization, thus being faster and leaner.
Facebook is characterized by a multi-faceted matrix organizational structure. The company utilizes a flat organizational structure in combination with corporate function-based teams and product-based or geographic divisions. The flat organization structure is organized around the leadership of Mark Zuckerberg, and the key executives around him. On the other hand, the function-based teams are based on the main corporate functions (like HR, product management, investor relations, and so on).
Goldman Sachs has a hierarchical structure with a clear chain of command and defined career advancement process. The structure is also underpinned by business-type divisions and function-based groups.
Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.
IBM has an organizational structure characterized by product-based divisions, enabling its strategy to develop innovative and competitive products in multiple markets. IBM is also characterized by function-based segments that support product development and innovation for each product-based division, which include Global Markets, Integrated Supply Chain, Research, Development, and Intellectual Property.
McDonaldโs has a divisional organizational structure where each division โ based on geographical location โ is assigned operational responsibilities and strategic objectives. The main geographical divisions are the US, internationally operated markets, and international developmental licensed markets. And on the other hand, the hierarchical leadership structure is organized around regional and functional divisions.
McKinsey & Company has a decentralized organizational structure with mostly self-managing offices, committees, and employees. There are also functional groups and geographic divisions with proprietary names.
Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time it also became more hierarchical, however still keeping its hybrid approach between functions, engineering groups, and management.
Nestlรฉ has a geographical divisional structure with operations segmented into five key regions. For many years, Swiss multinational food and drink company Nestlรฉ had a complex and decentralized matrix organizational structure where its numerous brands and subsidiaries were free to operate autonomously.
Nike has a matrix organizational structure incorporating geographic divisions. Nike’s matrix structure is also present at the regional and sub-regional levels. Managerial responsibility is segmented according to business unit (apparel, footwear, and equipment) and function (human resources, finance, marketing, sales, and operations).
Patagonia has a particular organizational structure, where its founder, Chouinard, disposed of the company’s ownership in the hands of two non-profits. The Patagonia Purpose Trust, holding 100% of the voting stocks, is in charge of defining the company’s strategic direction. And the Holdfast Collective, a non-profit, holds 100% of non-voting stocks, aiming to re-invest the brand’s dividends into environmental causes.
Samsung has a product-type divisional organizational structure where products determine how resources and business operations are categorized. The main resources around which Samsung’s corporate structure is organized are consumer electronics, IT, and device solutions. In addition, Samsung leadership functions are organized around a few career levels grades, based on experience (assistant, professional, senior professional, and principal professional).
Sony has a matrix organizational structure primarily based on function-based groups and product/business divisions. The structure also incorporates geographical divisions. In 2021, Sony announced the overhauling of its organizational structure, changing its name from Sony Corporation to Sony Group Corporation to better identify itself as the headquarters of the Sony group of companies skewing the company toward product divisions.
Starbucks follows a matrix organizational structure with a combination of vertical and horizontal structures. It is characterized by multiple, overlapping chains of command and divisions.
Tesla is characterized by a functional organizational structure with aspects of a hierarchical structure. Tesla does employ functional centers that cover all business activities, including finance, sales, marketing, technology, engineering, design, and the offices of the CEO and chairperson. Tesla’s headquarters in Austin, Texas, decide the strategic direction of the company, with international operations given little autonomy.
Toyota has a divisional organizational structure where business operations are centered around the market, product, and geographic groups. Therefore, Toyota organizes its corporate structure around global hierarchies (most strategic decisions come from Japan’s headquarter), product-based divisions (where the organization is broken down, based on each product line), and geographical divisions (according to the geographical areas under management).
Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the current CEO Doug McMillon is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
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