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Appex Corporation: Organizational Behaviour - II Case Submission 1
Appex Corporation: Organizational Behaviour - II Case Submission 1
Appex Corporation
Group 11
0086/56 | Adil Reza
0095/56 | Anupama K. A.
0107/56 | Hamdan M. Ridwan
0123/56 | Meghna Pandey
0147/56 | Siddhant Pramod Choudhary
0148/56 | Siddhartha Barua
1
Problems Addressed
1. Employees may narrow their field of focus and become specialists
2. Increased loyalty towards departments and system of accountability
Problems Created
1. Importance to ‘titles’ and ‘desk locations’ showing political influence
2. Standards being set by individuals rather than company policy
3. Polarization of teams that inhibited the working relationships among them
4. Functional source of authority was functional instead of managerial or expert
5. Lack of assessment metrics for each functional group
This stage saw two major modifications in the structure as a response to the problems that were rising in
the previous structures.
Mitigation
New business teams were established as an intermediary between these two teams to oversee and facilitate
exchange of information and reduce conflicts among different product teams.
Product Team Business Team
d) Divisional Structure
Ghosh divided products into two broad divisions:
Intercarrier Services (ICS) and Cellular management
Information System (IS) and created an Operations
division to eliminate office politics and make the
heads of all major divisions to report to him.
Problems Addressed
1. Vertical differentiation: Improved accountability,budgeting and planning
2. Motivated and determined employees
3. Integration: Mutual cooperation between the various divisions
4. Horizontal differentiation: Less operational load for Ghosh, more time for strategy
5. Centralized product development team to solve the problem of lack of new ideas.
Problems Created
1. Resource allocation perceived unequitable and politically motivated
2. Emergence of subunit orientation in sharing and coordination of resources
3. Financial tampering by divisions leading to inaccuracies
4. Poor communication flow across divisions and little cross pollination of ideas
5. Stagnation of new product development ideas hampering Appex's core competency
6. Divisions began facing structural problems akin to Appex.
4
Part B
What could Ghosh have done better?
Pre Acquisition Challenges
Were all the changes in structure necessary? Could some problems have been solved better?
Ghosh’s rationale for the structural changes was that whenever a company had grown by 50% then it was
due for a structural change. He received feedback from employees and the changes reflected employees’
solutions. However there were certain problems that could have been solved better.
Ghosh’s Action
Ghosh mitigated the uncertainty caused by structural changes by communicating financial targets which he
thought established stability.
Our Suggestion
1. Increase the time and growth threshold after structural change for better adaptation
2. Analysis of employee sentiments pre-changes rather than post introducing sudden changes
3. Raise the psychological safety by defining individual pay structures, employee career path and
role-responsibility matching
Ghosh’s Action
Implemented a divisional structure to increase the level of accountability, planning and budgeting.
Our Suggestion
Switch to a matrix organisation instead of a divisional one, institute a central support division for similar
product divisions
Our Suggestion
Different integration methods can be exercised to resolve the inter-unit conflicts, authority can be allocated
in such a way that promotes coordination between teams. Direct contact between employees of different
teams is an effective integration mechanism.
We do not see any evidence of focus on coaching people about roles, even though new people are being
hired and people in the firm are being rotated across roles after facing reorganisation. These
reorganisations also increased their bureaucratic costs as the organisation became large and more
complex.
Ghosh’s Action
Ghosh realised he first needed control and the way to get it was through traditional hierarchical structures,
but with minimal control for the bureaucracy. However the bureaucratic costs must have risen as there are
evidences where each product team wanted to include a higher up influential executive who could influence
the resource allocation for their team.
Our Suggestion
Instill trainings to coach employees on how to adapt to a change in the structure of the organisation and
their reporting relationships. The company could reduce the scope of management responsibilities, and hire
product managers from the outside.
Post Acquisition Challenges
In our opinion, EDS might
want to operate in a
multidivisional structure as
it is a large and complex
organization and will benefit
from several advantages like:
1. Organizational
effectiveness by
tailoring divisional
activities to the needs
of customers
2. Better control b y
holding all employees
accountable for their
actions
3. Profitable growth as
each division is its
own profit centre i.e. when its individual profitability can be clearly evaluated.
This is in line with Appex working as a self-contained unit as a part of EDS’ larger bureaucratic structure and
working out its own divisional structure.
6
Advantages
1. Flexibility and quick responsiveness to change due to reduced functional barriers
2. Increased interaction of functional specialists results in greater technological progress
3. Skills of employees can be utilised as team membership is based on the product needs
4. Balance between quality and cost due to participation of both functional specialists and product
managers
Anticipated Problems
1. The absence of a control structure might create role ambiguity
2. Product and functional teams might get into power struggle over resource allocation
3. Top managers might create a centralized structure in an attempt to increase their control
References
1. https://spencerkerberdotcom.files.wordpress.com/2015/10/case-2.pdf
2. Multidivisional structure infographic: Organizational Theory, Design and Change - Jones & Matthew