Question 1 APEX - case study PDF

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Question 1 What were the challenges that Shikhar Ghosh faced when he joined Appex?

Answer 

From the beginning the company started with organic structures. It promoted the flexibility required for any entrepreneurial organization at the nascent stage, so people initiated change as per market demand & adapted quickly to changing conditions. “As Appex’s CEO, Boyle instituted few business procedures; formal procedures seemed unnecessary, given the relatively small size of the company. The key executives made all decisions, and all other employees were involved in developing and selling products”. This looseness and chaos is the first and foremost challenge Ghosh had to face immediately after joining.

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“Atmosphere at Appex was changing from “entrepreneurial” to chaotic. People arrived at work and would react to whatever crisis the company happened to face that day. There was only “fire-fighting” and no development of an underlying planning structure. Anything a week away had no priority” Employees coordinated with each other on mutual Adjustment, with extensive use is made of face-to-face contact to coordinate tasks, and work process was relatively unpredictable. So people resorted to firefighting and only concentrated around the task at hand.

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“As Boyle stated: “People had particular expertise, but everybody did anything.” This is a classic example of Joint Specialization, where employees work together and coordinate their actions to find the best way of performing a task.

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“Ted Baker, presently Vice-President of Operations and Service Management, described the culture ‘If you were interested in something, you just did it. Nobody had any sense of what their job description was.” Organic structures were decentralized so that decision-making authority was distributed throughout the hierarchy; people assume the authority to make decisions as organizational needs dictate. Roles are loosely defined and people continually develop new kinds of job skills to perform continually changing tasks.

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“The company’s ability to bring products to the market quickly and Boyle’s innovative technical solutions enabled the company to compete against established firms” The core competence of initial days was the flexibility, and mutual adjustment. “While ACT was busy planning how to address the need, Boyle created a solution and installed it in the market”

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“Appex was spending cash quickly and not monitoring its expenses.” “There was no financial planning, and all planning seemed useless”. Absence of vertical differentiation and clear authority, top management was involved in the day to day business, just like any other employees. Hence the key top management role of strategic planning and long term orientation was lost to mundane affairs.

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“The company was project-based, meaning work was organized around projects.” Task forces and teams are the major integrating mechanisms.

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Each person performs all tasks, performing all 5 five basic functions e.g. support, production, managerial, adaptive and maintenance functions. The result is joint specialization and increased productivity. Employees from different functions work together to solve problems; they become involved in one another’s activities.

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“One developer would not know what another developer was doing. So, developers, working on the same system, would develop software codes that clashed, causing the system to crash”. When the size of company was small, limited employees made it possible for communicating and controlling g each other’s activity. However, with growth of company and inducement of increasing employees, the face to face integration was becoming obsolete. Newer employees were unable to fit in the norms, and resultantly employees preferred to work in groups. SO the flexible project team’s setup turned out to be rigid sub-unit. Ass there was no central integrating authority, in any form, so there were problems caused by differences in sub-unit orientation. This was because the different product groups’ activities were often incompatible and at cross-purposes

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In an organic structure specific norms and values develop that emphasize personal Competence, expertise, and the freedom to act in innovative ways. The organic structure, which encouraged the kinds of innovative behaviors that are considered desirable: teamwork and self-management to improve quality, customer service, and reduce the time needed to get new products to market.

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There was absolute lack of differentiation, both vertical and horizontal. Vertical differentiation establishes the distribution of authority between levels to give the organization more control over its activities and increase its ability to create value. Horizontal differentiation refers to the way an organization groups organizational tasks into roles and roles into subunits (functions and divisions). Horizontal differentiation establishes the division of labor that enables people in an organization to become more specialized and productive and increases its ability to create value.

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Standardization is conformity to specific models or examples—defined by wellestablished sets of rules and norms—that are considered proper in a given situation. Standardized decision-making and coordination through rules and procedures make people’s actions routine and predictable. “Customers began to complain too. One customer claimed to have called 150 times before he received a response. Appex could not address all the technical assistance requests of customers”

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Norms are standards or styles of behavior that are considered typical or representative of a certain group of people and which also regulate and govern their

behavior. Members of the group follow a norm because it is a generally agreed-upon standard for behavior. Many norms arise informally as people work together over time. “The chief financial officer of one of our customers told me of an incident he experienced at Appex. He arrived at 8:00 a.m. to find few employees present. He waited for two hours. The Appex group was playing basketball at a court nearby, and showed up at 10:00 a.m. Sweaty, and in their athletic clothes, they greeted him. Needless to say, we lost that account.

1. When he joined it was a small organization with 25 employees and 2 million in revenue 2. The company was entrepreneurial, technology-driven structured and loosing cash rapidly

but loosely

3. The organization was not poised well to take advantage of the impending boom in the sector for lack of an effective organizational structure. 4. Customer service was quickly deteriorating and clients leaving. 5. Project wise approach to problem solving. 6.Chaotic environment with no planning and monitoring, job responsibilities were not well defined leading to no accountability....