Appx

Evaluate the importance of each of the structural changes Shikhar Ghosh implemented. How important were they? What problems did each new structure address? What problems, in turn, did it create?

1. Circular Structure: It’s a structure of concentric functionality circles with the innermost circle consisting of senior executives followed by functional managers and employees respectively and finally surrounded by customers (environment).

Importance: It’s a non-hierarchical structure meant to create a continuous and free flow of information within the organisation and its environment.

Address Problem: It tried to create a synergy among different functional teams and improve coordination such that the communication of information was quick and hence decision making was smooth.

Problems Created: Employees were unable to relate to this unfamiliar structure. New recruits were not accustomed to such structure and could not fit it. They could not understand the power structure as who had the authority to make decisions and do performance evaluation. The whole system was just designed towards responsiveness and not planning.

1. Divisional Structure: Ghosh implemented a divisional structure in August 1990, establishing two broad businesses: Intercarrier Services (ICS) and Cellular Management Information Systems (IS), along with Operations division which serviced the two businesses.
   Importance: The divisional structure improved accountability, budgeting, planning and inter-divisional cooperation. It reduced the time spent by the top management in divisional works, and helped them focus more on the overall strategic planning.
   Problems Addressed: There was a lack of accountability earlier on, and people adopted a laid back attitude, leading to a decline in efficiency and profitability, which was addressed in the divisional structure as they developed a sense of cooperation within the division.
   Problems Created: Divisions felt that there was a bias with respect to resource allocation, which led to antagonism between the divisions. The divisions did not want to share their resources, leading to over-spending. There was also little communication flow across divisions and ideas were not inter-changed. Divisions started subdividing, and each division tweaked with the numbers, making it difficult for the management to assess true financial status.

1. Product Teams: This structure was made product centric, with each team having a product team manager and representatives from functional areas.
   Importance: Product teams co-existed with the functional teams, with the product manager responsible for writing business plans for product and integrate the functions.
   Problems Addressed: Due to co-existence with functional team, there was no need to have specialised knowledge of each other’s responsibilities. The functional team was now informed about the product happenings on a daily basis.
   Problems Created: There was no clear authority in the product team with respect to decisions. Conflict between product manager and operations manager became acute.