Appex Corporation

Structure Change

Point of View by: Ajit Bhura, IIMA, SMP Batch 10

 Case Background and Facts

❖ Appex corporation , founded in May 1986 a fast growing high – technology

company which provided management information systems & intercarrier
network services to cellular telephone companies.

❖ Shikhar Ghosh who joined the company as COO during May 1988 had envisioned
a company with key focus on improved control and structure
 Challenges / Problems / Situation @
Shikhar Ghosh joining

❖ Entrepreneurial, Technology Driven and Loosely structured company.

❖ Absence of proper Org structure and Job profiling / Job clarity.
❖ Inadequate and non-monitoring financial transactions (cash and expenses mgt.)
❖ Indisciplined time and unprofessional attire while reporting at work leading to
Chaotic work environment.
❖ Insensitive to customer support and unable to resolve technical issues.
❖ Unable to manage increased volumes and demands.
❖ Failure in meeting product development timelines, missing installation dates due
to duplication and communication gap within employees.
 Structural Changes implemented and
its effects
Circular Structure Horizontal Structure
(Implementation : Aug, 1988) (Implementation : Nov, 1988)

⮚ Positive Effects on Company ⮚ Positive Effects on Company

❖ Non-hierarchical organisation
❖ Free and Continuous flow of information within
and outside the organisation.

⮚ Negative Effects on Company ⮚ Negative Effects on Company

❖ Unfamiliarity amongst employees to new ❖ Non acceptance / supportive by existing

structure employees and hence discontinued
❖ Absence of clarity on authority in decision
making
❖ Non-customer centric mind-set
❖ Response driven reactive approach
 Structural Changes implemented and
its effects (contd/--)
Divisional Structure Hierarchical - Functional Structure
(Implementation – Aug, 1990) (Implementation – Feb, 1989)

⮚ Positive Effects on Company ⮚ Positive Effects on Company

❖ Improved accountability for budgeting and ❖ Clearly defining roles and responsibilities as per
planning BU / Functions.
❖ Enabled employees to meet financial target ❖ Dedicated Product team for more focused
❖ Enhanced employee co-operation approach towards business
❖ Non – Involvement of CEO for routine and
BAU activities to release CEO for more
important and strategic tasks.

⮚ Negative Effects on Company ⮚ Negative Effects on Company

❖ Improper Resource Allocation issues amongst
Senior Management.
❖ Lack of proper communication within teams and
departments.
❖ Siloes working style crop-in resulting into
Separate Entity working within the Company.
❖ Reservation on Job Title amongst employees
❖ Concerned with desk location
❖ Ego and Politics coming into play
❖ Expecting for skip level of reporting
 Proposed Structure : Pyramid Structure

Rational :

❖ Clear definition of designations and level / stage in the L1

organisation.
L2
❖ Career path planning for employees clearly defined – moving
from One Level to Another and also within levels. L3
❖ Lean structure for cost efficiency on the organisation.
❖ Clear definition of authorities and decision-making process.
L4
❖ Developing sense of accountability and loyalty in L5
teams/departments.
❖ Transparent outlining of KPI, KRAs, Employee benefits and CTC L6
+ Incentives structure.
❖ Efficient Evaluation & Supervision of Performance L7
 Proposed Structure : Layer wise Break Up
Level Grade Generic Position / Role Designation
A1 Chairman & Managing Director (CMD)
L1 Directors/Top Management
A2 Director (family members)
A3 Executive Director
       
B1 CEO/CFO/COO
L2 B2 Business Executives President
B3 Vice President
       
C1 Associate Vice President
General Manager
C2 Operations Head/Functional
L3
Heads Deputy General Manager
C3
C4 Assistant General Manager
       
D1 Senior Manager
D2 Manager
L4 Section In- charges
D3 Deputy Manager
D4 Assistant Manager
       
E1 Sr. Executive / Sr. Engineer / Sr. Operator / Sr. Technician
L5 Executives
E2 Executive / Engineer
       

Junior Executive / Officer/ Jr. Engineer / Machine Operator / GET /

F1
Chemist / Management Trainee / Technician

F2 Support Staff -Technical & Senior Assistant (Electrician / Fitter / Welder etc)
L6
Commercial
F3 Assistant (Fitter/ Elect/ Welder / Operator etc)

F4 Junior Assistant / Trainee / Jr. Engineer Trainee

       
Apex Corporation - Structure Change
Proposed Structure : Sample Organogram