Apex Corporation Study

Apex Case Write Up

Shikhar Ghosh joined Appex Corporation in May 1988 as the Chief Operating Officer. When he joined the company the company was relatively small with only 25 employees and $ 2 million in revenues.  The company was loosely structured and it was losing money fast and thus Shikhar Ghosh has a mounting task ahead to turn around the company. Thus Shikhar Ghosh was planning a large scale expansion and organizational level changes to handle the increasing customer demands and planning for the future strategies.

Following were the key challenges which Ghosh faced when he joined Appex:

1. The organization was relatively small in the beginning and thus the decision making was centralized among the key executives and all employees were involved in creation and selling of the products.
2. Different employees have expertise in different sectors but everybody did whatever comes to their mind or is the need of the hour.
3. There were no proper roles and job responsibilities defined and thus a lot of ambiguity prevails in terms of the functional responsibilities.
4. Since the business was expanding big projects were coming and more and more people were working on the same project at once at times leading to duplication of the work.
5. As the organization expanded the environment was changing from entrepreneurial to chaotic and cash was being spent quickly because of lack of proper financial planning.
6. Fire-fighting with respect to operations amongst the employees became the norm and thus there was no further development and planning structure.
7. Growing customer demand was not being handled well by the organization and thus customer complaints were also started increasing.
8. Company started witnessing a lot of failures in product development, missing installation dates and felling behind schedules.
9. Lot of clashed started taking place in the product development process and integration started splitting.
10. Though a small company which was in the growing phase still politics came into existence.

In order to run the business effectively and being faced with lot challenges Ghosh decided to changes the organization structure of the company in the following manner but faced a lot of problems:

1. Circular structure

1. Description: Concurrent circles with the innermost circle containing senior executives and moving outwards to include managers, employees and customers. 
2. Importance: Non-hierarchical organization in which the Information flowed continuously and freely within the organization and between organization and its environment.
3. Problems:

1. Employees could not relate to the structure
2. Employees didn’t know the power structure and who had authority to make decisions
3. Ambiguity with regards to performance evaluation in the system
4. Mentality developed that customer is enemy
5. Completely geared toward responsiveness and not any forms of planning

1. Horizontal structure

1. Description: traditional vertical organization turned on its side
2. Importance: Non-hierarchical and team oriented
3. Problems: Employees didn’t respond enthusiastically; lost sense of responsibility and authority

Issues solved (by Circular and Horizontal structures):

Organizational structure changed from informal and chaotic to formal.

From his experience of innovative structures, Ghosh realized there is a strong need of control and bureaucracy. Therefore, he moved towards a traditional hierarchal structure.