Background Appex Corporation's business is supplying management information systems and intercarrier network services to various cellular phone companies. In 1986, Appex entered this fast-growing market as a very small organization. Between 1986 and 1990, revenues grew 1600%. Similar growth was also seen inside the company as the number of employees rose from 26 to 180 between 1988 and 1990. Due to the relative youth of both cellular phone technology and Appex, the company faced major difficulties in transitioning to the larger landscape. As it became clear that the current internal structure needed change, newly hired COO Shikhar Ghosh brought several ideas to the company in an effort to improve the I feel when a company has grown 50%, it is time to change." The constant change, however, created anxiety amongst workers. Employees often look for stability in their careers, and, every six months, their work environment was subject to massive change. Though financial targets were set in an effort to promote stability, the fact that day-to-day operations could change up to twice a year created a stressful workplace for employees. * Implement a permanent, functional structure. This structure was implemented once before, and the results were mixed. Each functional section of Appex was broken down into teams (sales/marketing, operations, etc..) and structured horizontally amongst each other. * Strengths: Employees were focused on completing tasks. * Drawbacks: * Office politics, such as official job titles and desk location, came about. * Team heads created subfunctions within their team, resulting in more and more layers being added to the horizontal structure. * Teams became polarized and had problems working together. * Authority was chosen based on functional merit, rather than managerial. The managers may have been the best functional worker but did not possess the desired management skills. * Implement a permanent, divisional structure. This structure was also implemented once before, and, like the functional structure, it produced mixed results. Two broad divisions were
