Name: Dr Gajendra Singh

Candidate ID: 0000046956

The Question:
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In the case Appex Corporation, analyze the influence of organizational structure (specific elements like hierarchy,
formalization and centralization) on the behavior of people. Please do your analysis specifically for (a)
Hierarchical Structure, and (b) Divisional Structure, as described in the case. Support your answer with
illustrations where necessary.

Response:
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The company was having following problems:
• Entrepreneurial, technology-driven, loosely structured
• Employees had a lot of autonomy and hence lack of control and structure:
• There was no financial planning, which lead to rapid loss of money
• Poor customer service, because it was no one's primary job
• Apex started to fall behind schedule and miss installation dates
• Product development suffered because of poor flow of information
• The atmosphere was changing from entrepreneurial to chaotic as the company grew:
• People did not have a clear job description, so everyone did everything
• There was only “fire-fighting” and no long-term planning
• The company couldn’t handle increasing demand

Circular Structure: Employees were completely unfamiliar with the structure. New recruits expected a more
traditional organizational chart. They also didn’t know how their performance was evaluated
Horizontal Structure: Employees did not respond enthusiastically. No hierarchical organization
Functional Structure: More bureaucracy, more products leading to more employees and resulting in high costs
for training new people. Customer focus diminished. Employees became less concerned with meeting company-
wide financial goals. Shift happened from “everybody was doing everything” to “lot of process and where things
were not getting done". The product teams co-existed with the functional teams. Each team was comprised of a
product team manager and representatives from the functional areas. It has own problems like there was no
system that specified who had the authority to make decisions. Also, product teams did not know where their
authority ended. There was also the issue of resource allocation problems.
Divisional Structure: Few business procedures, formal procedures seemed unnecessary. The company structure
was very informal and fluid. Employees were focused, committed and hardworking. Company was responsive
and effective at getting things done quickly. The company was project-based. The number of projects increased
hence people worked more and the company hired more people and it resulted in high costs.

Innovative Structures: The functions were organized as teams which has helped company to focus on completing
tasks. After being acquired by EDS, Apex had followed their requirements. The company's challenge was to work
out its own divisional structure and structural changes in the context of its role as a division of a larger,
bureaucratic organization. There were two broad divisions: ICS and IS + additional departments: Operations and
Finance & HR. It has improved accountability, budgeting, planning, helped in focusing on meeting financial
targets and ensured great cooperation. The problems were of resource allocation, poor communication between
the two divisions and behavior of divisions like small companies.
As there is natural tendency to create sub-functions within their team, teams became polarized and because of it
organizational politics came into existence. The role of personalities became more pronounced. The source of
authority was functional, not managerial expertise. Some employees could not adapt to the new organizational
culture and structure and it led to failure of innovative structures.

1. Problem with Circular Structure • Employee were completely unfamiliar with the
structure • New recruits expected a more traditional organizational chart • They also
didn't’t know how their performance was evaluated  Horizontal structure • employees
didn't’t responds enthusiastically • No hierarchical organization Problem with
Functional Structure  Natural tendency to create sub-functions within their team 
Teams became polarized  Organizational politics came into existence  The source of
authority was functional, not managerial expertise
2. 5. AVAILABLE OPTIONS Remain in divisional structure  Created 4 different vertical
structure for easy communication.  Improved Accountability, budgeting and planning 
Keeps focus on financial targets  Raise cost as separate division managers were to be
hired Adaptive Structure  Evolve organisation structure overtime  Adjusts to new
demand of the market  Problematic for employees to understand the structure
3. 6. Form a new Matrix Structure  Employees are grouped by both function and product
in a matrix.  Take advantage of best parts of divisional and team based structure 
Division of powers among managers. Recommended Option We recommend that Appex
permanently use the divisional organizational structure. This model is most similar to
the standard vertical business model which has proven itself to be effective. This
model combines the benefits of different organizational structures by creating small
organizational divisions which create a balance between the desired control of upper
management and the desire for more organizational freedom from lower level
management.
http://www.anptech.net/uploads/1/1/4/7/114735539/apex.pdf
https://andrewwalz.files.wordpress.com/2017/11/apex-corporation-case.pdf
https://jamesryg.files.wordpress.com/2016/11/case-2-appex.pdf
http://austinshircliff.com/wp-content/uploads/2017/04/Case-2-Appex-Corp.pdf
https://bradleyerickson.files.wordpress.com/2016/02/appex-case.pdf
https://www.academia.edu/18452038/Appex_Case
http://www.patricktwarren.com/files/Case%20Studies/Case%20Study%20-%20Appex.pdf
https://spencerkerberdotcom.files.wordpress.com/2015/10/case-2.pdf
https://slideplayer.com/slide/4983218/