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7/27/2019 Group10 Appex Final Final
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Appex
Corporation
By Group 10:
1112005 Anjan Kumar Dash1112011 Arvind Raman
1112018 Chandrashekhar S
1112030 Manoj Kumar
1112058 Shamik B
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Timeframe : 1988 (Mobile telephony still in infancy!)
Company : Start up, 25 employees, $2M revenue &loosing money
Player : Shikar Ghosh COO; {Consultant @ BCG (Managing managers) Business Manager}
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Case context
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Year Emp. Rev. Structure + Effects - Effects
86-87
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Year Emp. Rev. Structure + Effects - Effects
Feb-89 ~ 40
$6.8M
Hierarchical/Functional Focus on taskcompletion Extensive politics
Separation into functionalteams (e.g. Sales, Service,Operations) Increased planning Development of sub-functions
System for assessingaccountability Polarization of teams
Reduction on cooperationPoor skill/managementmatches
Aug-89 ~ 80Addition of Product Teams Improved planning No system of authority
Overlay of functionalrepresentatives for each keyproduct
Application ofmanagement vs. skill toproducts
Extensive executive decisionsupportNo system of prioritiesbetween products
Nov-89 ~ 100
Addition of Business Teams Decision makingauthority More tail than tooth toomany people in overheadIntermediaries between productteams and corporatemanagement
Resource allocationauthority Too many layers ofmanagement
Internal process focusLoss of customer focusLoss of P&L accountability
Structural Evolution @ APPEX
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5
Year Emp. Rev. Structure + Effects - Effects
Aug-90 ~ 150 $16.6M
DivisionalImprovedaccountability,budgeting, andplanning
Resource allocationssquabbles
Separation into three divisions,ICS, IS, and Operations
Extensivecommunications withindivisions Cross-divisional antagonism
Second guessing of Sr.
ManagementNo cross-divisionalcommunication orcooperationFinancial gamesmanship
Oct-90 EDS Acquires Appex Corporation
Structural changes did address- organizational and- environmental concerns (to
an extent)
However the number and frequency ofthe changes resulted in environment- fiefdoms- employee anxiety and
- power struggles.
Structural Evolution @ APPEX
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Q1 : Challenges in front of Shikhar Ghosh
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Q1 : Challenges in front of Shikhar Ghosh
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People People not empowered. Key executives made all decisions
Peoples expertise not properly utilized. Everybody did everything
ProductsandServices
No product plan. People did what they were interested in. Lack of
coordination would result non-interoperable code. Missed deadlines.
Customer service was crumbling. Could not address all technicalassistance requests of customers
Processes Few business processes
No financial planning. Spending cash quickly and haphazardly and notmonitoring its expenses
Environment changing from entrepreneurial to chaotic
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Q1 : Challenges through the STARS lens
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Turnaround
Sustaining Success Reenergizingdemoralized employees Going deep enough w/
painful cuts
Everyone sees thatchange is necessary
Little success goes along way Affected constituencies
offer external support Systems & structure
that permit scaling Integrating many
new employees
Potential for growthmotivates people
People inclined tostretch
Strategy, structure w/oboundaries & resources
Recruiting high performingteam
Do things right from start People energized by
possibilities
Strategy, structure w/o boundaries
Limited resources Recruiting high performing team
Strong team may already be there People are motivated Foundation for success may be
there
Convincing employeesthat change is essential
Restructuring the topteam & refocusing org
Significant growthpockets exists in org
People want to
continue the successtrend
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Q2: What would we have done?
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2
WHAT
WOULDWEHAVE
DONE?
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Questions Principles What we would have done
To what extent do we have
leadership throughout theorganization?
1. External leadership: ability to translate external needs tointernal vision
Establish a sense of urgency - to
change and seize the opportunity.Examine the realities and identify
bottlenecks tofulfilling the market
opportunity.
2. Internal leadership: ability to translate vision to
employee action
To what extent do we have the
capacity for change?
1. Symbiosis: ability to remove boundaries between
external threat and Internal action
Will created a guiding team:
comprising of Brain Boyle (CEO),
Jim Driscoll Paul Gudonis & Paul
Senn to implement the accelerated
growth challenge
2. Reflexiveness: ability to learn from previous actions
3. Alignment: ability to integrate tasks, structures,
processes, and systems at the technical, political, and
cultural levels
4. Self-renewal: ability to change over time
To what extent do we use all
management practices to build
shared mindset?
1. Integration: ability to integrate all the management
practices
Craft a vision : To help direct the
organization to achieve the
accelerated growth objectives.
Develop strategies to support the
objectives.
2. Unity: ability of management practices to build internal
and external unity
To what extent do we have a
shared mindset inside and outside
the organization?
1. Internalize customer values: ability to make customer
values employee values
Communicate the vision The
purpose is to focus the
organization on the opportunities
and the behaviors that would be
needed to achieve the vision. 10X
2. Mindset dispersion: ability to have the mindset shared
within and outside the organization
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Q2: What would we have done?
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Questions Principles What we would have done
To what extent does my business have world
class performance in each source of
uniqueness and have the ability to integrate
across the four sources of uniqueness?
1. Paradox: ability to deal with competing
demands
Will empower other to act on the
vision. To build uniqueness by
integrating the four paradoxes. Tell
Appex employees all management
action will be guided by the vision
statement
To what extent do we understand and meet
customer needs?
1. Customer intelligence: ability to
continuously scan and learn from customers
Create short term wins: Celebrate
new product release, a customeracquisition or a competitive win.
This will create momentum for the
vision and belief
2. Competitor intelligence: ability to
continuously examine and learn from
competitors
To what extent do we understand economic
and social conditions affecting our business?
1. Continuous Learning: ability to constantly
learn about business conditions which affect
the business
Institutionalize the new approach;
communicate againlinking new
behavior and success . Plan for
leadership development at Appex
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Our position : Functional Structure (to gain execution efficiency)1. Align incentives such that it rewards Business Goals achievement
2. Arrive at a core set of values that need to be exhibited while achieving business goals
Q2: What would we have done?
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Q3 : Address challenges at the end of case
Fitting Appex in divisional structure of EDS
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EDS Division1
EDS Division1
EDS Division1
EDS CEO
AppexCorporation
ICSDivision
ISDivision
OperationsFinance &
HR
Downsizing of
this division
Downsizing of
this division
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Q3 : Address challenges at the end of case
Challenges
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Downsizing: Many functional groups such as Finance and HR will need to be downsized Operations team will need to be realigned.
Change of corporate culture:
Appex would need to align with the culture of EDS. Live with reduced autonomy
Aligning reward mechanism along the lines of EDS Fight for Resource Allocation:
Appex now have to compete with other EDS divisions for resources Appex as a division needs to learn how to get work done using shared
resources. Foster cooperation within divisions of EDS
Reverse Leadership Passage for top Management: Sikhar has been CEO for some time. He have to now work as a business
manager Preparing for new growth:
Matrix structure
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Q3 : Address challenges at the end of case
Deal with downsizing
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Managing change : Change management will be carried out using 4Rs. Those areRestructuring, Revitalizing, Reframing and Reskilling.
Managing Transition : Process of managing transition can be done in 3 ways
Deal with End ings :After using 4Rs framework if some people have to moveout of organization, the endings should be managed properly using a closingceremony
Neutral Zone:4Ps framework should be used. Purpose is clear as Appexhave been taken over for better growth due to synergies. Picture the scenarioshould be made to make people understand the purpose. Plan about futureshould be communicated to all employees. Part: Every employee should knowhow they are playing part in the new process.
Beginning change process:Change process should be taken up with focus
on internalizing culture of EDS in Appex.
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Q3: Address challenges at the end of case
Deal with downsizing : When reorganization work ? framework
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Powerful Idea Right Timing Reluctance of
managers
EDS Merger hasbeen done based on
analysis & goodreasoning. This idea
needs todisseminated
through all means
In time of M&A,everyone expectschange. This is the
right time forShikhar to announce
reorganization
changes
Shikhar haveto deal with thereluctance of
managers who havewent through many
reorganizational
changes in past
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Q3 : Address challenges at the end of case
Deal with corporate culture change
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Consolidatechange
Plan for shortterm wins
Empower othersto act on vision
Communicatethe visionCreate a visionForm a powerful
guiding coalitionEstablish sense
of urgency
Institutio
nalizingt
he
ap
proach
Follow 8 steps to transform organization
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Q3 : Address challenges at the end of case
Follow eight steps to transform the organization
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Sense of urgency: Sense of urgency can be created by putting a deadline on themerger completion.
Forming a powerful guiding coalition:A coalition consisting of Paul Gudonis,Bob Lentz, Ted Baker etc. should be formed
Creating a Vision:A vision of making Appex the most successful division of EDSshould be shared among employees
Communicating Vision:This vision needs to be communicated to all theemployees of Appex
Empowering others to act on vision: Encourage risk taking and non-traditionalideas, activities and action
Plan for short team wins:Creating short term goals and revenue targets will helpachieve this goal
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Q3 : Address challenges at the end of case
Follow eight steps to transform the organization
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Consolidating improvements and processing still more change:More changecan be realized by promoting people who can implement the vision
Institutionalizing New approaches:Articulate the how new behavior is linked tosuccess in corporate ladder
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Q3 : Address challenges at the end of case
Deal with Fight for resource allocation
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Fight for Resource Allocation:As a part of small part of a large organization,Appex now have to compete with other divisions of EDS for resources. Clear valueproposition of the projects and alignment to the EDS corporate strategy is mostimportant to get resources.
Deal with Reverse leadership passage
Reverse leadership passage:As Shikhar and other top management team workedin start-up and high growth mode adjusting to large bureaucratic organization. EDStop management can decide whether to work with Shikhar or find another leader for
the new division.
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Q3 : Address challenges at the end of case
According to Greiner model of organizational
growth Appex needed a transition to the fifth
phase of collaboration.
Key aspects to overcome the red-tape crisis and
foster collaboration are identified which will be
essential in integrating with EDS Phase 5 focuses on management actions
through teams and alleviation of interpersonal
differences. Social controls are to be used to
replace the formal control mechanisms used in
phase 4.
Teams are to be combined across functions to
handle specific tasks.
Key managers are to meet regularly to focus on
the major problems.
Educational programs are to be used to train
managers in behavioral skills for achieving better
team work and conflict resolution.
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Source: Evolution and Revolution as Organizations Grow - Larry E. Greiner
Deal with Prepare for new growth
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Q3 : Address challenges at the end of case
Create the organizational design & check it using the checklist
Will the new design Fit?
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Business Unit strategies: Does design direct sufficientattention to intended sources of competitive advantage
Corporate Strategy: Does design allow corporateparents to add value
People: Can key people implement design &functioning well within it
Resources: Is design feasible given available resources
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Q3 : Address challenges at the end of case
Create the organizational design & check it using the checklist
Are there potential problems with the new design?
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Coordination: coordination between different business units that Appex will now bepart of must be fostered.
Specialist Culture The specialist cultures must be retained and be protectedfrom influence of the dominant culture of EDS.
Redundant Hierarchy As identified above, redundancies must be identifiedand avoided while integrating into EDS.
Accountability Appex as a division will need to be accountable and have
clear performance measures.
Flexibility The design must be flexible enough to cope with the uncertaintiesand new challenges.
Excessive Complexity The design must be sufficiently straightforward forcustomers, employees, partners, regulators and suppliers.
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Q3 : Address challenges at the end of case
MATRIX Structure:
Based on Greiners model of transitioning into phase 5 oforganizational growth and the checklist for organizational design amatrix structure is recommended for Appex for enabling innovation,performance, and growth after integrating to EDS.
The matrix facilitates communication and information sharing whichlead to improved multi-functional coordination. The matrix alsoprovides a mechanism for Appex to leverage aspects of EDSsinfrastructure and competencies.
The matrix organization is also suited to deliver results in the fastpaced and technologically driven industry where Appex is playing byremaining customer focused while providing importance to thefunctions.
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Thank You
any Questions ?