Organisational Design & Change

Appex Corporation Case

Submitted by: Group-1

(a) Why Ghosh commented after reflecting on his initial impression, “I knew what had to be done.
Appex needed control and structure”?

Ghosh’s initial expression of Appex was that of a loosely structured company which was not
able to meet the expectations of the stakeholders and thus, was losing money. There was no control
in the organisation as employees did what they felt like and that too at their own time. Also, enough
importance was not given to the customers, they were dealt with an attitude of “we’ll call you back”.
Therefore, Ghosh said that the basic requirement of Appex was to apply some structure so that all
employees work in sync and customers are treated appropriately. Also, a basic level of accountability
and responsibility needs to be ensured among employees by having some control in the organisation
so that the chaotic nature of start-up setup gets reduced and some functional tasks can be achieved
more efficiently.

(b) Why circular structure was introduced in Appex? What purpose did it serve?

Apex was lacking a proper organizational structure and was still working like an
entrepreneurship in its nascent phase. There was no planning and communication between different
verticals was not seamless. So, the circular structure was implemented to create a non-hierarchical
organization in which information flowed continuously and freely within the organisation and
between the organization and its environment. This was implemented so as to bring a structure to the
organization without the traditional hierarchy that Appex was not used to.

(c) Why Horizontal Structure did not work?

Ghosh wanted to try new and innovative structures that achieved success in other firms. So,
he implemented a horizontal structure. But the employees reacted poorly to this.
Appex was a firm in which the organizational structure was entrepreneurial, but was changing to
chaotic. They were not even familiar with the traditional form of hierarchy and structure. So, it was
very tough for them to acclimatise to innovative and storage designs like horizontal structures. The
needed to be under a proper structure to be controlled. Only then this structure could be broken to
bring in innovation.
(d) How do you compare functional structure with initial start-up (entrepreneurial set up)?

S.No. Parameter Entrepreneurial Setup Functional Structure

1. Effectiveness High- everyone worked on Low- as teams became polarised
the task at hand
2. Accountability Low- everyone did High- proper job allocation
everything
3. Efficiency Less- no proper task More- everyone worked on their
allocation allotted tasks
4. Hierarchy None Multi layered and pertinent
5. Organisational Absent Present- people started caring about
politics the titles and seating arrangements
6. Inter employee Good- close interaction Bad- structure inhibited working
relations between employees relationships
7. Employee skills Generalists or multi- Specialists in different functional
specialists areas
8. Delegation of Absent Present- hierarchical structure
Authority
9. Size of Small Large- organisation grew vertically
organisation and horizontally
10. Structure Project based Functional structure
Very informal and fluid Rigid and well defined
11. Information Difficult- because of lack of Easy- everyone reported to Ghosh
flow a defined structure
12. Role of Absent- everyone worked Present- standards were set by
‘personalities’ as a team individuals rather than company
policies
13. Working Quick and cheap Delayed and more transaction costs
involved