MGTO650n Appex Consolidate

8/12/2019 MGTO650n Appex Consolidate

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Appex CorporationManaging Change at Organization Level

Fong Kit Ling, Catherine

Lee, King

Ng Lai Wah, Kanas

Sin Wai Yu, Cortina

Wong Kit Lee, Tammy


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MGTO 650n Corporation

Team 2 Organizational Structure

King

Catherine

Kanas

Cortina

Tammy

Pros

Free flow of

knowledge

Everybody

do everything

High

flexibility

Nohierarchical

problems

Cons

No clear

individual

responsibility

Depends on

natural

leaders

Depends onself

discipline


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Agenda1. Background of Appex

2. Diagnosisneeds Structure and Control

3. Appex Structural Development

4. Shikhars Philosophy & Comments

5. Suggestions on Structural Change


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Background of Appex

Provided management information systems andintercarrier network services to cellular telephone

companies.

the fastest growing high-technology company in

the United States 1990 Business Week

Early 1988, expanded fast, hired more

people, spent cash quickly and not

monitored expense

May 1988, Shikhar Ghosh was recruited

as COO and shortly afterwards CEO to

reform Appex Harvard MBA


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Background of Appex

Provided management information systems andintercarrier network services to cellular telephone

companies.

the fastest growing high-technology company in

the United States 1990 Business Week

Early 1988, expanded fast, hired more

people, spent cash quickly and not

monitored expense May 1988, Shikhar Ghosh was recruited

as COO and shortly afterwards CEO to

reform Appex Harvard MBA

Appex needed

structure and control.


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Diagnosis - Structure and Control

No formal procedures

No job description

Spending cash quickly w/o monitoring

expenses

No longer term plan: fire fighting, no

planning structure, no priority for anything a

week away

No body had time to plan schedule or

meetings , difficult to accomplish basic tasks

Could not handle the increased demand of

customer request

Problem on information flow, e.g. one

developer would not know what another

developer was doing.

Problems from lack of Structure

Organizational

Departmental

Individual

Level of Responsibility


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Diagnosis - Structure and Control

No control in office hour

Everybody did things on their own time

Everybody just did what they felt like

Not putting customers as first priority.

Received complaints from customers, e.g. one

customer called 150 times before he received a

response

Playing basketball in office hour

No financial planning.

All planning seemed useless, e.g. 103

employees in 1989 but the latest forecast was

79

Problems from lack of Control

Entire

OrganizationAdministrative

Financial

Front Office

Level of Responsibility


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Appex Structural Development

Time Staff Structure

86-87 < 26 Informal - Start-Up

Summer 88 < 26 Circular

Late 88 ~ 26 Horizontal

Feb 89 ~ 40 Hierarchical/Functional

Aug 89 ~ 80 Addition of Product Teams

Nov 89 ~ 100 Addition of Business Teams

Aug 90 ~ 150 Divisions


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Informal - Start-Up

Pros Cons

Innovative, committed

workforce High-bandwidth

communication

Fast, extensive idea

generation

Quick market response

No underlying planning

structure No product accountability

Unclear reporting structure

Fire-fighting mentality

Lack of customer service

focus


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Circular

Pros Cons

Free flow of information

Theoretically customer-based

Theoretically responsive

structure

Employees could not

relate Aimed at response, not

planning

Unclear decision

hierarchies Customer became the

enemy

CEO


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Horizontal

Pros Cons

Impression of traditional

structure

Complete failure

Employees gave noresponse


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Hierarchical/Functional

Pros Cons

Focus on task completion

Increased planning System for assessing

accountability

Development of sub-

functions Polarization of teams

Reduction on cooperation

Poor skill/management

matches

CEO

Sales

FIN

IT

HR


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Business Teams

Pros Cons

Decision making authority

Resource allocationauthority

More tail than tooth

too many people inoverhead

Too many layers of

management

Internal process focus

Loss of customer focus

Loss of P&L

accountability

GM

BT

BT

PT

PT

PT

PT


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Divisions

Pros Cons

Improved accountability,

budgeting, and planning

Extensive communications

within divisions

Resource allocations

squabbles

Cross-divisional

antagonism

Second guessing of Sr.

Management

No cross-divisional

communication orcooperation

Financial gamesmanship

CEO

Div Div


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Shikhars Philosophy & Comments

When a company has grown 50%, it is time tochange.

Many structural changes reflected employees

suggestions Change the structure to match the people and the

business with the structure

Incentive scheme, resource allocation system, and

other systems had to reinforce the change of newstructure.


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Cultural:

artifacts

values

assumptions

Political:

interestscoalitions

resources/power

Strategic:

leadership

timing

linking

process

Three Lenses for Organizational Change

Shikhars Philosophy & Comments

Power struggle?Any hidden

agenda for the

changes?

Sudden &

immediate

changes? Business

alignment? What

to achieve? Well-

thought process?

Company culture

matches with new

structure? Staff

adaptation and

behavioral change?


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Suggestions on Structural Change

Beforedetermining a structure,

Ghosh needs to communicate his vision to the

entire company to create buy-in

Anticipate the advantages & disadvantages of new

structure

Set a detailed plan with a specific timetable to

manage the expectation of employees Establish the measurable goals, e.g. financial

target, Balance Score Card to maintain focus


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Afterdetermining a structure,

Ghosh needs to communicate the progress to all

employees so that they can understand the status

of the change

Review the result after the change i.e. financial

result, resource allocation

Get feedback from employees to fine tune thestructural change


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Structure changes gradually with Culture

No specific structure for any organization,

changes in different stages

Organization evolves, not changes suddenly

Change to achieve specific goals or align with

business development, not due to the "time

set" (every 6 months) Each change of structure needed to be

complemented by cultural changes


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Question & Answer

MGTO650n Appex Consolidate

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