appex corporation – managing change at organization level
DESCRIPTION
Appex Corporation – Managing Change at Organization Level. Fong Kit Ling, Catherine Lee, King Ng Lai Wah, Kanas Sin Wai Yu, Cortina Wong Kit Lee, Tammy. MGTO 650n Corporation – Team 2 Organizational Structure. King. Catherine. Cortina. Kanas. Tammy. Agenda. - PowerPoint PPT PresentationTRANSCRIPT
Appex Corporation –Managing Change at Organization Level
Fong Kit Ling, Catherine
Lee, King
Ng Lai Wah, Kanas
Sin Wai Yu, Cortina
Wong Kit Lee, Tammy
MGTO 650n Corporation – Team 2 Organizational
StructureKing
Catherine
Kanas
Cortina
Tammy
Pros Free flow of
knowledge Everybody
do everything High
flexibility No
hierarchical problems
Cons No clear
individual responsibility
Depends on natural leaders
Depends on self discipline
Agenda1. Background of Appex
2. Diagnosis – needs Structure and Control
3. Appex Structural Development
4. Shikhar’s Philosophy & Comments
5. Suggestions on Structural Change
Background of Appex• Provided management information systems and
intercarrier network services to cellular telephone companies.
• “the fastest growing high-technology company in the United States” 1990 Business Week
• Early 1988, expanded fast, hired more people, spent cash quickly and not monitored expense
• May 1988, Shikhar Ghosh was recruited as COO and shortly afterwards CEO to reform Appex
Harvard MBA
Background of Appex• Provided management information systems and
intercarrier network services to cellular telephone companies.
• “the fastest growing high-technology company in the United States” 1990 Business Week
• Early 1988, expanded fast, hired more people, spent cash quickly and not monitored expense
• May 1988, Shikhar Ghosh was recruited as COO and shortly afterwards CEO to reform Appex
Harvard MBA
Appex needed structure and control.
Diagnosis - Structure and Control
No formal procedures
No job description
Spending cash quickly w/o monitoring expenses
No longer term plan: “fire fighting”, no planning structure, no priority for anything a week away
No body had time to plan schedule or meetings , difficult to accomplish basic tasks
Could not handle the increased demand of customer request
Problem on information flow, e.g. one developer would not know what another developer was doing.
Problems from lack of Structure
Organizational
Departmental
Individual
Level of Responsibility
Diagnosis - Structure and Control
No control in office hour
Everybody did things on their own time
Everybody just did what they felt like
Not putting customers as first priority. Received complaints from customers, e.g. one customer called 150 times before he received a response
Playing basketball in office hour
No financial planning.
All planning seemed useless, e.g. 103 employees in 1989 but the latest forecast was 79
Problems from lack of Control
Entire Organization
Administrative
Financial
Front Office
Level of Responsibility
Appex Structural Development
Time Staff Structure
86-87 < 26 Informal - Start-Up
Summer 88 < 26 Circular
Late 88 ~ 26 Horizontal
Feb 89 ~ 40 Hierarchical/Functional
Aug 89 ~ 80 Addition of Product Teams
Nov 89 ~ 100 Addition of Business Teams
Aug 90 ~ 150 Divisions
Informal - Start-Up
Pros Cons
Innovative, committed workforce
High-bandwidth communication
Fast, extensive idea generation
Quick market response
No underlying planning structure
No product accountability Unclear reporting structure “Fire-fighting” mentality Lack of customer service
focus
No structure
Circular
Pros Cons
Free flow of information Theoretically customer-
based Theoretically responsive
structure
Employees “could not relate”
Aimed at response, not planning
Unclear decision hierarchies
Customer became the “enemy”
CEO
Horizontal
Pros Cons
Impression of traditional structure
Complete failure Employees gave no
response
Hierarchical/Functional
Pros Cons
Focus on task completion Increased planning System for assessing
accountability
Development of sub-functions
Polarization of teams Reduction on cooperation Poor skill/management
matches
CEO
Sales
FIN
IT
HR
Product Teams
Pros Cons
Improved planning Application of
management vs. skill to products
No system of authority Extensive executive
decision support No system of priorities
between products
Product Manager
Product Manager
Business Teams
Pros Cons
Decision making authority Resource allocation
authority
“More tail than tooth” – too many people in overhead
Too many layers of management
Internal process focus Loss of customer focus Loss of P&L
accountability
GM
BT
BT
PT
PT
PT
PT
Divisions
Pros Cons
Improved accountability, budgeting, and planning
Extensive communications within divisions
Resource allocations squabbles
Cross-divisional antagonism
Second guessing of Sr. Management
No cross-divisional communication or cooperation
Financial gamesmanship
CEO
Div Div
Shikhar’s Philosophy & Comments
• “When a company has grown 50%, it is time to change.”
• Many structural changes reflected employees’ suggestions
• Change the structure to match the people and the business with the structure
• Incentive scheme, resource allocation system, and other systems had to reinforce the change of new structure.
Cultural:
artifacts values assumptions
Political:
interests coalitions resources/power
Strategic:
leadership timing linking process
Three Lenses for Organizational Change
Shikhar’s Philosophy & Comments
Power struggle? Any hidden
agenda for the changes?
Sudden & immediate
changes? Business alignment? What to achieve? Well-thought process?
Company culture matches with new
structure? Staff adaptation and
behavioral change?
Suggestions on Structural Change
Before determining a structure,• Ghosh needs to communicate his vision to the
entire company to create buy-in• Anticipate the advantages & disadvantages of new
structure• Set a detailed plan with a specific timetable to
manage the expectation of employees• Establish the measurable goals, e.g. financial
target, Balance Score Card to maintain focus
Suggestions on Structural Change
After determining a structure,• Ghosh needs to communicate the progress to all
employees so that they can understand the status of the change
• Review the result after the change i.e. financial result, resource allocation
• Get feedback from employees to fine tune the structural change
Suggestions on Structural Change
Structure changes gradually with Culture• No specific structure for any organization,
changes in different stages • Organization evolves, not changes
suddenly • Change to achieve specific goals or align
with business development, not due to the "time set" (every 6 months)
• Each change of structure needed to be complemented by cultural changes
Question & Answer