Organizational structure: Appex Corporation

Prepared By:Tushita GoelDivya JhambAmarendra AmarAmritanshu ShekharPawan Sah

Company Background

Founded in May 1986

Merger of Appex, Inc. & Lunayach Communications Consultants (LCC)

Specialized in:

o Management information systems

o Inter carrier network services

o Design and engineering solutions

1990: Rated as the fastest growing high-technology company in the US

Innovative company

“Everyone did anything”

Challenges faced by Shikhar Ghosh Undefined KRAs (Key Responsibility Areas)

No job description, Very informal and fluid organizational structure

Overwhelming work resulting into work overload

Unstructured financial spending, Only fire fighting approach was in practice

Lack of planning, Undefined priorities, Improper interdepartmental cooperation

Soaring backlog, Un-kept promises to the customers

Individualistic approach, Unclear information flow

Rise of customer detracting mentality, No ownership of the issues, Chaotic environment

Structural changes- Circular structure

Characteristics− Non-hierarchical, Concentric circles

expanding out from executives to customers

Positives− Free flow of information− Theoretically customer-based − Theoretically responsive structure

Negative− Employees “could not relate”− Aimed at response, not planning− Unclear decision hierarchies− Customer became the “enemy”

Structural changes- Horizontal structure

Characteristics− Non-hierarchical, Org-chart turned sideways

Positives− Impression of traditional structure

Negative− Complete failure− Employees gave no response

Structural changes- Functional structure

Characteristics−Separation into functional teams

Positives− Focus on task completion− Increased planning− System for assessing accountability

Negative− Extensive politics− Development of sub-functions− Polarization of teams− Reduction on cooperation− Poor skill/management matches

Structural changes- Product + Functional

Characteristics−Overlay of functional representatives for

each key product

Positives− Improved planning− Application of management vs. skill to

products

Negative− No system of authority− Extensive executive decision support− No system of priorities between products

Structural changes- Product + Functional +Business

Characteristics−Intermediaries between product teams

and corporate management

Positives− Decision making authority− Resource allocation authority

Negative− Too many people in overhead− Too many layers of management− Internal process focus− Loss of customer focus− Loss of P&L accountability

Structural changes-Divisional Structure

Characteristics− Separation into three divisions, ICS, IS, and

Operations

Positives− Improved accountability, budgeting, and planning− Extensive communications within divisions

Negative− Resource allocations squabbles− Cross-divisional antagonism− Second guessing of Sr. Management− No cross-divisional communication or cooperation− Fractal structures− Financial gamesmanship

What would we have done ??

An RCA of the problems

A control on the structure was required

A balance between centralized and decentralized power

A combination of horizontal and vertical structure

Such structure is called Matrix structure

Grouping the employees on the basis of function and product while maintaining the vertical and horizontal integrations between the two.

Address the new challenges Acquired by Electronic Data Systems (EDS)

New Challenges: − EDS has a bureaucratic structure− Appex still does not have clear structure

Solution− Deploy Matrix structure at Appex and use senior

resource from EDS− Integrate the two teams functional areas, so the inter

organization conflict does not arise

Thank You