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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}

    2

    Case context

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    3

    Year Emp. Rev. Structure + Effects - Effects

    86-87

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    4

    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

    6

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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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    9

    Q2: What would we have done?

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    2

    WHAT

    WOULDWEHAVE

    DONE?

    10

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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

    11

    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

    12

    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

    13

    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

    14

    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.

    21

    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?

    22

    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.

    24

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    Thank You

    any Questions ?


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