Q1. What were the challenges that Appex CEO Shikhar Ghosh faced when he joined Appex? Why were “structure and control” deemed necessary?
The industry of Cellular Telephones was rapidly growing, and the demand of Appex was continually expanding with increasing projects and added employee strength. Although Appex Corporation started as a small startup, it had transformed into a company that required a well-defined control and structure. The following are some of the challenges faced by Ghosh at the time when he joined the company: Firstly, the company was initially quite small prompting decision making to be centralized and limited to only the key members of the executive. The rest of the staff were only tasked with the development and sales of company products. Secondly, all staff possessed expertise in specific sectors, but everyone was doing whatever came across in their minds. Thirdly, there was no any implemented functional structure, thus creating a situation of lack of job descriptions and roles being undefined among employees (Nohria, 1992). Fourth, with the rapid market growth, more projects came into the market forcing employees to work on these pouring projects at the same time. Fifth, the environmental situation at the company, started being chaotic as the organization spent cash at a faster rate without expense monitoring systems. Sixth, complaints from customers were increasing, and the company was not able to handle and manage the growing volume and demand of request from clients (Nohria, 1992). Seventh, the company was missing key dates such as those for installations and therefore fell short of its schedules. Again, there were elements of failures as far as product development was concerned. Eighth, the flow of information started being impossible as clashes envisioned the process of developing products and the falling apart of integration and coordination functions. Finally, the absence of financial planning made operations unproductive and as such, the looseness of the company projects never succeeded.
Q2. Evaluate each of the following structural changes Ghosh implemented with respect to importance, problems resolved, and problems created:
(1) Start-up structure
Importance: This structure was non-hierarchical and as such employees were able to fit themselves into the organization.
Problems created: Lack of control and authority since employees were never responsive.
(2) Circular structure
Importance: It led to the creation of a non-hierarchical company that allows for free and continuous flow of data and information not only within the company but also with the clients.
Problems addressed: Firstly, this structure addressed the emergence of a flat structure by enabling role definitions and reduction of the ambiguous atmosphere. Secondly, it brought about improvement in the coordination, planning and integration over the previous structures (Nohria, 1992).
Problems created: Employees struggled relating to the circular structure as it appeared unfamiliar. More so, new recruits did not easily understand their organizational fits and often went to other staff to do certain things for them. This structure did not define how the evaluation of staff performance was done, power structure and where the authority was based in particular decision makings. Also, this structure had full gear towards responsiveness and not accountability as far as planning was concerned, thus making tasks that needed planning not to be done in real time.
(3) Functional structure
Importance: Functional structure had a more largely classified structure with well-defined roles and team division that had a much-improved hierarchy and proper authority flow.
Problems addressed: Firstly, it gave clarity as far as responsibilities and authorities were concerned across various organizational functions. Secondly, it succeeded in having the company focus on completing projects and other tasks. Finally, this structure offered accountability, especially on control (Nohria, 1992).
Problems created: This structure led to confusions especially when it came to the definition of assignments and functions of emerging management roles. The emergence of politics polarized the teams. Team leaders began creating smaller sub-functions which led to minor organizational charts growing both vertically and horizontally thus making managerial functions consistently increase within such sub-functions.
(4) Teams
Importance: Teams included representatives drawn from senior management and as such possessed the authority in decision making including those that relate to products and resource allocation.
Problems addressed: Firstly, teams primarily business teams resolved the conflict of authority and resource allocation. Secondly, this structure reduced the burden of decision making particularly on final decisions which were initially done at the corporate management level.
Problems created: There were too many individuals for planning and accounting instead of having them for revenue generation. There was also a considerable cost increase at managerial levels including infrastructure, hiring, and training. Again, this structure led to diminishing the focus on customers as employees shifted their attention to internal processes and not financial goals of the company.
(5) Divisional structure
Importance: This structure enabled the company product to be divided into separate operations section or division which could be tasked with servicing both business units with utility functions.
Problems addressed: Firstly, it improved planning, budgeting, and accountability across the entire business. Secondly, employees were able to relate themselves to their divisions offering some sense of internal cooperation. As such, they could now focus on meeting divisional financial targets (Nohria, 1992). Thirdly, Ghosh himself had his role changed from being involved in virtually everything to dedicating more time on strategic planning.
Problems created: There was an unequal perception on resource allocation among these divisions. Again, politics crept in allowing for lots of second-guessing taking place within the divisions. Also, the need for divisions in full control of their resources and their reluctance in resource sharing led to increased input costs. Some divisions began functioning like different organizations with barriers being created between them resulting in a reduced flow of information and ideas.
Q3. What would you have done differently? Why?
I could have kept a particular structure for a substantial period and not always changing structures at such a rapid rate as seen in Ghosh’s management style. By doing so, I would be able to gather enough feedback from the staff in preparation for the upcoming changes. Again, I would have started with a divisional structure and assigning control and authority to respective senior executives and managers first and not keeping such a flat structure as Ghosh did.
Q4. Would all the changes Ghosh made make sense if Appex were an engineering organization? Why and why not?
Some of the changes that Ghosh made would not make sense suppose Appex was an engineering company since the need and value of details is essential in every engineering step. A slight alteration in the negative direction (such as lack of schedules, installation dates, and unclear production process) does not allow for recovery time to correct the wrongs and as such, the company stands a chance of struggling and even eminent collapse in the long run.
Q5. What are the lessons to be learned in this case?
This case offers us an insight into management roles and responsibilities in efforts of transforming a start-up organization into a large corporate. It further highlights the dos and don’ts that a CEO should consider during the transformations phases. As seen from the case, the key to successful management is structures that are put in place.
References
Nohria, N. (1992). Appex Corporation. Harvard Business School, 1-18.
