I understand what you mean by exploded deployment, running the files in place inside a Workspace.
First, I'm reasonably sure you must be using RAD in order to accomplish this and the deployment must be fully automated. I know of no manual way to run in exploded mode although that does not mean it is not possible.
Second, exploded mode is ok for developers using the WAS
Test Server, but production environments should not be in exploded mode at all.
Anyway, if you are using RAD, you have to make sure the server is available in the RAD server window (add it as an entry if it is not) then double click on this in RAD (DO NOT USE THE WAS ADMIN CONSOLE FOR THIS) and there are options for changing the deployment mode.