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8/12/2019 MGTO650n Appex Consolidate
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Appex CorporationManaging Change at Organization Level
Fong Kit Ling, Catherine
Lee, King
Ng Lai Wah, Kanas
Sin Wai Yu, Cortina
Wong Kit Lee, Tammy
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MGTO 650n Corporation
Team 2 Organizational Structure
King
Catherine
Kanas
Cortina
Tammy
Pros
Free flow of
knowledge
Everybody
do everything
High
flexibility
Nohierarchical
problems
Cons
No clear
individual
responsibility
Depends on
natural
leaders
Depends onself
discipline
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Agenda1. Background of Appex
2. Diagnosisneeds Structure and Control
3. Appex Structural Development
4. Shikhars Philosophy & Comments
5. Suggestions on Structural Change
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Background of Appex
Provided management information systems andintercarrier 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
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Background of Appex
Provided management information systems andintercarrier 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.
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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
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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
OrganizationAdministrative
Financial
Front Office
Level of Responsibility
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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
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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
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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
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Horizontal
Pros Cons
Impression of traditional
structure
Complete failure
Employees gave noresponse
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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
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Business Teams
Pros Cons
Decision making authority
Resource allocationauthority
More tail than tooth
too many people inoverhead
Too many layers of
management
Internal process focus
Loss of customer focus
Loss of P&L
accountability
GM
BT
BT
PT
PT
PT
PT
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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 orcooperation
Financial gamesmanship
CEO
Div Div
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Shikhars Philosophy & Comments
When a company has grown 50%, it is time tochange.
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 newstructure.
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Cultural:
artifacts
values
assumptions
Political:
interestscoalitions
resources/power
Strategic:
leadership
timing
linking
process
Three Lenses for Organizational Change
Shikhars 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?
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Suggestions on Structural Change
Beforedetermining 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
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Suggestions on Structural Change
Afterdetermining 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 thestructural change
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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
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Question & Answer