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Appex Corporation Case Study

Autor:   •  October 12, 2015  •  Case Study  •  1,626 Words (7 Pages)  •  4,755 Views

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Appex Corporation Case Write Up

What were the challenges Shikhar Ghosh faced when he joined Appex?

Appex Corporation was a rapidly growing business, with increasing employee strength and added project work. It had initially begun as a startup and transformed into an organization which needed a proper well-defined organizational structure. Shikhar Ghosh was recruited by Appex’s investors to provide the crucially needed control and structure to the organization. Major early issues recognized by Ghosh were

  • Ghosh realized that the atmosphere at Appex had changed from “entrepreneurial” to chaotic because of structural issues due to quick expansion of Appex.
  • Long term goals were not addressed and there was lack of financial planning. Many tasks were addressed on daily basis when they became critical.
  • Customers were dissatisfied due to lack of technical assistance when required.
  • Information flow among team members had become difficult, for e.g. two developers were unaware about the work each was doing.
  • There was lack of project orientation and looseness. Further, unclear responsibility and accountability had made the functioning of Appex unproductive.
  • To provide a well organizational structure to Appex, Ghosh applied innovative organizational structures he had been exposed to at BCG. However, most of these innovative structures did not sustain practically and had to be altered.
  • The initial iteration of structures, namely circular and horizontal, was not able to achieve the desired results, as most of the employees could not relate to them or were not willing to accept.

Evaluate the importance of each of the structural changes Shikhar Ghosh implemented. How important were they? What problems did each new structure address? What problems, in turn, did it create?

Organizational Structure

Importance

Problems Addressed

Problems Created

Circular Structure

To create non-hierarchical organization where there is continuous & free flow of information within the organization & with the customers.

  • Introduction of flat structure with defined roles & less ambiguous atmosphere
  • Improvement in coordination, integration & planning over the earlier

  • Employees could not relate to the unfamiliar circular structure, new hires couldn’t understand their fit in organization, go to person to get things done, how the performance was evaluated, what was the power structure & who had authority to make which decisions.
  • It was completely geared toward responsiveness but had no accountability for planning & the tasks that required planning were not get done

Horizontal Structure

It was a non-hierarchical structure in which employees could fit themselves

  • Employees could now relate themselves with the new structure.
  • It was similar to traditional organization structure with clarity of responsibilities & reporting structure
  • Employees didn’t respond to the new structure enthusiastically.
  • There was a lack of authority & control because of which employees were not responsive

Functional teams

It was a more broadly classified structure with clearly defined functions & division of teams which had better hierarchy & flow of authority.

  • It provided clarity of responsibilities & authority across different functions.
  • The structure succeeded in focusing the company on completing tasks.
  • It accounted for a greater degree of control
  • Confusion in defining the functions and assignment of new management roles
  • Politics came into existence and teams started becoming polarized
  • Heads of the teams started creating sub -functions within their team - Organizational chart grew vertically & horizontally & managerial roles kept on increasing within sub -functions.

Product Teams

The structure was made more product centric with product team managers assigned with the role of writing business plans for the products & integrating the functions.

  • The product teams co-existed with functional teams & there was no need of having the knowledge of each other’s responsibilities.
  • Functional teams were informed about the product happenings on a daily basis.
  • Business & operational plans were put in-place for multitude of projects & thus product managers’ extended managerial activities went out of capabilities of some personnel.
  • No system to specify about the authority to make the decisions within the multi-functional product teams
  • The conflicts between the product managers & the operations personnel became acute.
  • Product teams didn’t know the limits of their authority - decisions related to sales price, allocation of resources & prioritization of activities

Business Teams

Business teams included representatives from senior management & had the authority to make decisions including those related to resource allocation & products.

  • The conflict of authority & resource allocation was resolved.
  • The burden of final decision making at the corporate management level reduced
  • A lot of people for planning & counting rather than for revenue-producing.
  • Lot of managerial levels & the infrastructure, hiring & training costs increased considerably.
  • Customer focus diminished & people became concerned regarding internal processes rather than company-wide financial goals.

Divisional Structure

Appex’s product could be divided into one of these two businesses. A separate Operations division could service both the businesses with utility functions.

  • Accountability, budgeting & planning were improved across the businesses.
  • Employees could relate themselves to the divisions & there was a sense of cooperation. They now focused on meeting the financial targets.
  • The role of Ghosh changed – He could now dedicate more time on planning & strategy building rather than involved in everything.
  • Resource allocation between divisions was not perceived as equitable now.
  • Politics again came into existence & a lot of second guessing started happening in the divisions.
  • Divisions wanted to control all their resources & didn’t want to share resources, increasing input costs.
  • Divisions started functioning as different companies with barriers between them & there was a little flow of communication & ideas.

What would you have done in Shikhar’s place?

The most pertinent issue in the implementation of multiple structures over a course of 3 years was that Shikhar kept on changing the structure of the organization at such a rapid pace that he did not provide enough time to observe the long-term effects of the changes. Change is always welcomed with resistance. The same happened in the case of Appex Corp as well. However, Shikhar could have done better by keeping a particular structure in place for a substantial amount of time to understand if the employees were finally getting to accept it bit by bit. Rather than keeping a very flat structure, which invited complacency or a very hierarchical structure, which polarized the teams, he should have assigned authority and control to respective managers and senior executives first. A divisional structure would have been a better starting point. After having implemented the changes, he should have kept maintained the structure for a substantial amount of time to gather feedback from the employees for the next wave of change. He could then have discussed job rotation, incentives and funding requests for projects with the division heads while communicating the implications of the same to the employees and registering their responses.

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