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

Appex corporation was spending cash quickly and too haphazardly without
monitoring its expenses. The atmosphere was changing from entrepreneurial to
chaotic. The employees came when they felt like coming. For instance, the customer
service people turned up at 10:00 am while they were supposed to be present by
8:00 am. There was no development or future planning. There was only “fire-
fighting” with employees reacting to only the crisis that happened on a day to day
basis. Appex had started to fall behind schedule and to miss installation dates. The
company also experienced failures in product development. There was no financial
planning and all planning seemed useless. Many customers had complained of not
receiving technical assistance. Now the major challenge was to create control and
structure that would help resolve the above challenges. The key problem facing
Ghosh upon arriving at Appex is the chaotic condition of the company’s current
organizational structure. Appex started out with a tight knit group of employees that
could easily adjust to changes and solve problems rapidly. As Appex grew and new
employees were hired, the former business structure began to fail. New employees
did not have clear cut job responsibilities and the overall company had no formal
communication structure.

2. Evaluate the importance of each of the structural changes Shikhar Ghosh

implemented. How important were they?

Structure Circular Horizontal Hierarchical, Divisional

type Structure Structure Functional Structure
Structure
Importance A non- An A level of The previous
of hierarchical organization control was structure
structural organization which was needed to increased the
change in which still flat but add bureaucratic
information with a accountability costs without
flowed freely structure and a sense increasing the
and that of order. bottom line of
continuously focused on the company
with the planning for As the
organization the future. company was
and also in a growth
between the phase a sense
organization of hierarchy
and is required.
environment.
 Problems The issue of A non- The company Improved
addressed information hierarchical focused on accountability,
flow was team completing budgeting and
addressed oriented tasks. planning.
while structure
allowing the with focus The Increased
organisation on long company’s cooperation
to retain its term basic within
flexibility. planning. capabilities divisions.
improved.

3. What were the advantages and disadvantages of each new structure

implemented by Shikhar Ghosh?

1. CIRCULAR STRUCTURE
ADVANTAGE - Fast and Free flow of information within the org and btw
the org and its environment.
DISADVANTAGES-
 Employees could not relate to this structure
 New hire was unfamiliar with this structure they did not know the
power structure of the organisation
 Too customer centric
 Lack the guidelines regarding evaluating the performances and
making plans for the task accomplishment.
2. FUNCTIONAL STRUCTURE
ADVANTAGE-
 Dividing the entire work of the organisation into different
functions and teams
 Better co-ordination between the teams
 Proper distribution of work within the organization.

DISADVANTAGE-

 By creating sub-functional team within a functional team, the

team became polarized. for example- the distinction between
engineering and operation, that is building a system and
operating it did not exist. The operation team restricted the
involvement of the engineering team in their functions which
 earlier was done jointly, thus more money was spend on
development and operation than before.
 Ego clashes, standards were set according to individuals rather
than the company policies.
 Lack of well-defined source of authority, & resource allocation.
 Difficulty in measuring the managerial competences.
 Lacked customer focus.

DIVISONAL STRUCTURE-
ADVANTAGES-
 Well defined structure of work within all the departments.
 Better communication between the divisions of the organisation.
 Fast and effective flow of information.

DISADVANTAGE-

 Inappropriate decision regarding resource allocation.

 Lack of control over all the resources.
 Poor flow of information.
 Lack of standardization of work.

4. What would you have done in Shikhar’s place? Were all the changes in structure
necessary? How would you address the challenges Shikhar is facing towards the
end of the case?

The divisional structure has presented some advantages to Appex, for instance this structure
improved accountability, budgeting, and planning. However, Shikhar should go for Matrix
structure. Implement a matrix structure: Similar in some ways to the divisional structure, a
matrix structure can benefit from the functional divisions formed in the divisional structure
but also supplement these divisions with divisions based on products as well. Employees are
grouped by both function and product in a matrix and frequently teams of employees will be
assigned to a project to accomplish a specific goal. This form of a matrix structure is one in
which a project manager is assigned to oversee projects and these project managers must
share power with the functional managers who are the normal chain of command.
Institutional environment should be implemented in the organization that govern the
behaviour of the employees of organization.

Since Ghosh had followed regular periodic changes in the structure of Appex Corporation
(Greiner’s model as it passed through several stages of growth strategies) to suit the need of
a growing entrepreneurial organization, but now once acquired by EDS, Appex must realign
its structure. This is so because it was no longer an independent company but was rather a
division of a huge hierarchical bureaucratic organization. So the challenges faced by Appex
can be addressed by: Clarity of Direction and Delegation: Appex employees may clearly
understand what is line of hierarchy and what are their roles and responsibilities under the
new takeover. Coordination and Synergy Achievement: Appex needs time to reshuffle its
vision and structure slowly and steadily in a way that it can adapt the best practices of EDS
but retain its core competencies. Representation of EDS in divisions of Appex: Executive
senior management of EDS should become a part of the divisional teams of Appex so that
they can understand the working of Appex and accordingly mould Appex towards the
practices of EDS. Morale Boosting by Increased Compensation: As so far, Appex employees
have enjoyed independence in decision making (to certain extent). Hence to sustain
innovation and product development capability of the employees of Appex, Ghosh must
negotiate with EDS to increase compensation for Appex employees and organize regular
interactive meetings to build an effective communication pathway between EDS and Appex.
Subsidiary to Integration: Ghosh must consider every division’s operation once again to
ensure that Appex as a whole continues its growth rate and does not just remain a
subsidiary but becomes an integral part of EDS.