Appex Corporation

As the number of employee increases, a structure can be modified but changing it too often (after every 6
months) is too radical in nature – Ghosh didn’t focus on financial implications and frequent resource
allocations caused by the structural changes as every structure has its advantages and drawbacks. Instead of
focusing on company’s strategic objectives and external environment (competition) he was totally consumed
with the internal environment of the company thus ignoring the bigger picture.

Circular Structure was one of the innovative structures implemented by Ghosh. The purpose of circular
structure is to promote the senior level executives. One of the advantages of this structure is that it allows the
CEO free access over a staff, which means that this structure provides assistance to the CEO in order to assign
the tasks and project to the staff. Functional Structure implementation by Ghosh facilitated teams in the
organization, which helped to organize the positive relationship among different teams such as sales and
marketing, operation, finance, human resource, administrative, technology, software development and service
team. Divisional Structure also had various advantages like it enhanced accountability; budgeting and planning
can be done efficiently.

All of these structures have various drawbacks. Circular structure did not favour the company due to several
problems. One of the major problems was that employees could not participate in decision making process.
They were completely unaware about the structure, particularly new employees. The new employees were not
able to understand the company’s culture. Functional structure also possessed some issues like it was unable
to identify the number of functional teams. For example, how to develop marketing and sales team, should
they be separated or considered as a single team? Similarly, the case occurs in finance and accounting.
Another problem of the functional structure was the source of authority; Ghosh also realized that it was very
difficult to determine managerial competence. In divisional structure, there were also certain problems. One
of the problems was regarding resource allocation. Employees thought that management is violating the rules
and regulation in terms of financial resources. Another problem was that the flow of communication across
different divisions was affected negatively.

Hewlett-Packard: Culture in Changing Times

The culture of the organization, the ‘HP Way’ is the image created for the employees and market. HP’s culture
gives importance to people by giving the sense of belonging and reward for collective performance. When
Carly Fiorina took over, she bypassed the HP way. By being oblivious to the core issues that made the
organizational architecture of HP, she undertook change steps that contradicted with the existing setup and
conflicted with the thinking held by workers of the company. Fiorina’s approach to the organization and its
vision reflected towards individualism, and left the workers stranded to understand their role especially during
the changes being made.

There appear to be two important lessons that illuminate why employee trust turned into employee distrust at
HP. First, organizational leaders need to be aware that, in addition to signals of respect and fairness, signals of
satisfaction with and pride in employees are important to creating organizational trust among employees.
Such satisfaction is distinct from respect or benevolence, because it signals a positive performance evaluation
of employees by an organization and its leaders.

Second, leaders should know that such signals are not only important to building and maintaining trust by
employees, but that signals of their opposites (i.e, disrespect, unfairness, and dissatisfaction) may engender
employee distrust. The behaviours identified as producing distrust among HP employees include: dismantling
and replacing traditions and symbolic practices that embodied company culture (e.g., moving from
independent business units to centralized control, and eliminating the position of “open-source software
guru”), reneging on promises (e.g., laying off workers after they took pay cuts to prevent layoffs), appearing to
play “unfairly” (e.g., seeming to use unfair enticements to get board votes for the merger with Compaq), and
un-privileging insiders (e.g., taking away perks and preferential hiring from long-time employees). Together,
these actions appeared to signal disrespect and unfairness (that ultimately led to employee distrust) for long-
standing traditions and for employees in general.
Southwest Airlines

Organization of Southwest Airlines is described as an upside-down pyramid. The upper management is at the
bottom and supports the front line employees (~35000), who are the experts. This is Herb Kelleher's
unorthodox leadership style, in which management decisions are made by everyone in the organization, not
just the head executives. The company is described to not have much emphasis on structure; instead
employees are encouraged to think freely without constraints such as titles. Kelleher, for example, is said to
know the names of virtually all his employees.

Services are variable, inseparable, intangible and perishable. These unique characteristics impose challenges
for service firms to overcome. There are different strategies to beat these characteristics. Services are variable
by nature as different people of same designation deliver services of different types and same person provide
different types of services at different times. This problem can be overcome by training of employees and
customers. Inseparability of production and consumption makes consumer part of service process so their
active participation, employees’ enthusiasm, easy techniques make effective and efficient process. Providing
physical evidence through website, brand name, colour, logo, uniform etc. help a service firm to overcome the
problem of intangibility. It is evident from analysis of Southwest airlines that effective strategies related to
people, process and physical evidence help a company to overcome some of its characteristics and thus
achieve success.

Southwest Airlines has developed a great low cost model for the past thirty year that fits today's economy the
best. It has expanded from a tiny company with merely three aircrafts to one of today's major airliners that
flies between 58 cities carrying over 60 million customers each year. As everyone can see, Southwest Airline
has been a big success. Now, it is given an opportunity to grow even bigger at this extremely hard and critical
time for the airline industry. After the incident of September 11, Southwest Airline is one of the few airliners
that remained profitable; other airline companies are losing millions of dollars due to the insurance raise, the
security cost and lack of customers. They should take this opportunity to expand to greater regions by using its
low price tickets to drive its competitors out of business and take over their market. Giving up some of the
profit by cutting the ticket price even lower and upgrading hardware can open Southwest Airline to a much
larger market that will bring more profit in future. Implementations of cost saving technology such as internet
is needed to lower the operation cost to give customers better deals.

Campbell and Bailyn’s Boston Office

C&B current market situation – adapting to new products; meltdown in the mortgage-backed securities
market; internal structural change – Key Account Team (KAT), specializing
the generalist

Customer Reaction to KAT – KAT covers top 60 accounts of C&B; Generalist converted to Specialists; 5 person
KAT per key account of C&B; 50% customer approval; 50% customer uncertainty

Evaluation of Pre-Existing Structure – Customer relationship; Proven success company-wide; Employee

satisfaction | Lack of in depth product expertise; Lack of specialization in managing key accounts; Limited
amount of generalist's exposure to other key accounts

Evaluation of KAT – Potential to increase sales due to individual specialization of team; More valuable technical
advice; Overall increase in company success | Decreased commission for generalists; Limits career prospects

Evaluation of Winston – Had the best intentions for company advancement | Struggled to manage his
employees during structural change; Lack of transparency; Did not listen to their ideas