Organization Design and Structure

PGP-1, Trimester-2
Section -2
Batch 2024-26

Title of Study:
Appex Corporation Case Study

Submitted By - G1
Rounak Khatua (24F242)
Lasnakavya Varatharaju (24F224)
Ruben Joseph Devasia (24F243)
Sannidhi Guruprasad Naik (24F247)
Mrinali Limje (24F230)

1
Q1. What were the challenges Shikhar Ghosh faced when he joined Appex?

Shikhar Ghosh faced several challenges when he joined Apex Corporation:

 Apex was entrepreneur-driven, technology-driven, and loosely structured, despite which it was losing
money rapidly. It has a very informal organizational structure. The company's environment was
changing from entrepreneurial to chaotic, leading to a lack of accountability and responsibilities,
making it difficult for Ghosh to implement effective management practices.
 The company's transition to a structured organization made it difficult for the employees to adapt to a
large organization that previously thrived in a small organization and lacked the skills required for a
larger organization structure. Ghosh faced challenges adapting to the workforce by reshuffling, hiring,
and promoting individuals.
 Apex was spending cash too haphazardly without proper monitoring of its expenses. As a result, Ghosh
had to instill financial discipline and control by implementing significant changes in how the company
operated financially.
 Employees were accustomed to acting unprofessionally with a casual attitude towards customer
service.
 Hence Ghosh has to bring in the structural changes to instill professionalism among its employees
which was resisted by the staff who were used to a more relaxed environment.
 The firm had strategic challenges and was dealing with each day as it came resulting in reduced focus
on product quality and also no new demand could be met making it hard to manage even the basic tasks
of the day.
 Ghosh also faced the challenge of creating a Cohesive team environment as he introduced product
teams along the functional side teams. This led to improper communication flow between the members
of the same team leading to failures and confusion regarding decision-making authorities and
responsibilities.

Q2. Evaluate the importance of the structural changes Shikhar Ghosh implemented?

The structural changes put into effect by Shikhar Ghosh in Appex Corporation became important for the
company to address the growing challenges and fast-paced growth. Earlier, it was a loose structured
entrepreneurial startup with no backbone of hierarchy, little in terms of defined roles or planning. His
interventions allowed necessary control and organization for the sake of efficiency and accountability.

1. Circular Structure:- Encouraged an environment of open communication and sought to provide a levelled
approach towards the organization and free flow of information so as to be able to adapt quickly, and be flexible.
It relieves the burden on the core circle for decision making for less important functions.

2. Horizontal structure :- More efficient in allocating duties to staff members, has clearly defined roles, and
simplifies management.

2
3. Hierarchal, Functional structure: - The structure enables employees to learn efficient techniques from one
another, enhancing skill development. It also allows people with similar skills to supervise and manage each
other's work. Encourages specialisation and work separation, which boosts productivity. Increases the long-term
dedication of team members to their task.

4. Divisional structure :- It creates positions inside the structures with clear responsibilities, thus promoting
responsibility and level of autonomy. It also makes it possible to arrange tasks logically according to the goals of
the product

Q3. What problems did the new structure address?

Circular Structure: -

1. The circular structure led to the free flow of information both within the organization and between the
environment and the organization, thus improving co-ordination, planning and integration.

2. Encouraged viewing the various divisions as a part of the whole single organisation.

Horizontal Structure: -

1. It helped in overcoming the difficulties faced in the circular structure. It was similar to the traditional
organizational structure with clarity of responsibilities and reporting.

Hierarchical & Functional Structure: -

Phase 1:

1. Business functions were organized as teams, which created clarity of responsibilities. There was proper
division of labour.

2. Accountability increased and the company was focused on completing the assigned tasks.

Phase 2:

1. Hiring the external people with broader managerial expertise helped persons with functional skills to focus on
product development, while the managerial role to looked after by the hired experts.

Phase 3 (Product Teams)

1. The product team coexisted with the functional team and these functional teams were informed about the
product happenings on a daily basis.

2. Product managers were able to handle external managerial activities which went out of capabilities of some
persons.

3
Phase 4 ( Business Teams)

1. Managerial expertise improved along with functional expertise got improved and better.

2. Problem of resource allocation was solved.

Divisional Structure:-

1. Employees could relate themselves with the divisions and there was a sense of cooperation.

2. The structure helped in improving accountability, budgeting and planning.

3. Shikhar Ghosh’s role changed. Instead of day to day administering activities he could now focus more on
planning and strategy building.

Q4. What new problems, in turn, did the new structural changes create?

1) Issues of Horizontal Structure:

 Employees were demotivated because of no incentives.

 When middle managers are absent, management loses control and authority.
 A lot of time was wasted by management to meet employees.

2). Issues of Circular Structure:

 Employees were not able to understand the hierarchy, roles, and responsibilities within the
organization.
 Decision-making was difficult due to the confusion among employees.
 Employees did not know how they were evaluated which added to the confusion.
 A mentality that “CUSTOMER IS THE ENEMY” started to emerge.
 Employees could not see a traditional organizational structure.
 They were not aware of the power structure and who made the decisions.

3). Issues of Functional Structure:

 It led to polarization between teams.

 Politics started to arise.
 Employees' evaluation was based on individual personalities rather than organizational standards which
made it inconsistent.
 Became very hard to measure managerial competence.
 Source of authority was based on function and not based on expertise.
 Employees were not aware of the power structure and who made the decisions.

4
4) Issues of Product Team/ Business team Structure:

 Generated resource allocation problems.

 Problems between functional representatives.
 Decision-making authority was not specified.
 New employees were not experienced.
 Infrastructure and training costs were high.
 Diminished customer focus.

5). Issues of Divisional Structure:

 It created walls of communication in divisions.

 Costs started to rise since each division started to duplicate work.
 Resource allocation became difficult.
 Individual divisions started to become complex.
 Led to a smaller number of innovations and product ideas.
 Led to inefficiencies within subdivisions.

Q5. How would you address the challenges faced by Appex Corporation?

The challenges faced by Appex Corporation would need to be addressed with a holistic approach which would
not only focus on immediate and long-term organisational solutions but would also focus on organizing
company’s structure and decision-making ability. With sudden rapid growth and experimentation initially, the
company lacked control and accountability, which resulted in inefficiencies like missing of deadlines and poor
customer service. To overcome these challenges, following ways can be considered:

i. Improved Cross Functional Collaboration:

The organization should try to implement cross – departmental teams for specific project targeting
customer service, marketing, sales and engineering to bridge the communication barrier. In addition to
this, regular communication channels across the company should be regulated, where employees of
different departments can have meetings among each other or along with senior officials.

ii. Efficient Allocation of Resources:

The company can centralize its policy of resource allocation, where a central management committee
could be established to oversee the allocation of resources across the organization. The committee can
evaluate the requests from different departments based on their requirements and allocation of
resources could be made effectively and efficiently. Along with this, Enterprise Resource Planning
(ERP) software, can also be implemented where data on resources – whether human, financial or
materials are being utilized, to forecast the future resource needs.

5
 iii. Long Term Strategic Planning
The absence of long-term strategic planning led to lack of coherent vision for the future. Hence, a
strategic plan related to the company’s goals for the next four to six years, with inclusion of specific
targets, market expansion and customer acquisition could be implemented. Along with the
implementation, it is also necessary to regularly review the progress of the strategy and then adjust with
necessary changes as needed. This would ensure that the common goal of the company would be
prioritised, ensuring long term success over short term goals.

iv. Enhancing Customer Focus with Operational Delivery:

With the growth of Appex, it could be seen that there was an increase in poor customer services with
delays and unresponsiveness. This also led to internal chaos and conflicts within the organisation.
Hence, it is necessary to ensure customer satisfaction for Appex’s future success. The process of
customer relationship management can be enforced, where a well-trained team mainly focusing
exclusively on maintaining customer relationship with key clients could be initiated. Along with this, a
loop of feedback from customers could be systematically collected, analysed and implemented for
improvements, in order to meet customer satisfaction.