Implementation of Changes in Chinese Organizations. Groping a Way Through the Darkness

238 Pages·2009·1.665 MB·English

by  Ruth Alas (Eds.)

Implementation of Changes
in Chinese Organizations
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Implementation
of Changes in
Chinese Organizations:
Groping A Way
Through the Darkness
E
DITED BY
R A
UTH LAS
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First published in 2009
ISBN:
978 1 84334 352 3
© The contributors, 2009
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The Authors
Professor Ruth Alas is the Vice-Rector for Scientific Affairs and Head
ofManagementDepartmentinEstonianBusinessSchool.Shehaswritten
21 management textbooks and more than 100 articles. Her research is
focusing on employee attitudes, learning abilities, organizational culture,
leadership, crises management, business ethics, and corporate social re-
sponsibilitry. Ruth Alas has given lectures about change management in
Estonia, China, and South African Republic. Ruth Alas has organized
severalinternationalconferencesinEstonia,andisChairofEIASMwork-
shops’ series “Organizational development and change.” Ruth Alas is in
editorial boards of nine journals: European Journal of International
Management, Chinese Management Studies, International Business:
Research,TeachingandPractice,BalticJournalofManagement,Problems
& Perspectives in Management, Journal of Business Economics and
Management,JournalforEastEuropeanManagementStudies,TheOpen
EthicsJournal,andEBSReview.
Doug Davies (Dr.) is a Senior Lecturer at the University of Canberra,
Australia. He is on the editorial panel of 2 international journals and is a
visiting professor at a Malaysian University. His research interests in-
clude comparative and international HR studies between Australia and
Asia, HR devolution, industrial relations, and workforce planning.
Alan B. Eisner is the Graduate Program Chair and Professor of
ManagementatPaceUniversity.HereceivedhisPhDfromtheManagement
Department,SternSchoolofBusiness,NewYorkUniversity.Hisprimary
research interests are organizational learning, business and technology
strategies, and entrepreneurship. He has published in several journals in-
cluding International Journal of Electronic Commerce, Advances in
StrategicManagement,InternationalJournalofTechnologyManagement,
American Business Review, and The Case Journal. Dess, Lumpkin, and
Eisner’s Strategic Management, 4e textbook is published by McGraw-
Hill/Irwin. Eisner is Associate Editor of the Case Association’s electronic
peerreviewedJournal,TheCaseJournal(www.caseweb.org).
vii
Implementation of Changes in Chinese Organizations
Chin Seng Koh is a founder and Practice Leader of The Knowledge
Practice, an organization research and consulting firm co-located in
Melbourne and Singapore. He leads the China and Singapore practice
and advises on organizational change management, competency-based
human resource management, due diligence and risk management in
mergers and acquisition, and joint venture arrangements. Mr Koh was
based in Shanghai and Beijing from 1997 to 2007 as an expatriate and
a HR practitioner, holding the appointment of Director HR for an
environment-based conglomerate and an industrial gas group. In addi-
tion, he led the HR portfolio of Thomson multimedia, ST Aerospace,
and Philips Singapore.
Helaine J. Kornis Associate Professor in the Management Department of
the Zicklin School of Business, Baruch College, CUNY. She received her
PhD from the Stern School of Business, New York University in 1994.
Helaine’s research interests are in the antecedents and consequences of
firms’ strategic moves. Her research has been published in the Academy
of Management Journal, Strategic Management Journal, Journal of
Management, as well as other outlets.
Jie Shen (Dr.) is Associate Professor in International Human Resource
Management, Department of Management, Faculty of Business and
Economics, Monash University, Melbourne, Australia. He is Adjunct
Associate Professor at Univeristy of South Australia, Guest Professor at
Southwest Jiao Tong Univeristy, Shanghai University and Fujian Normal
Univeristy. His main research interests are International Human
Resource Management (IHRM) and HR and industrial relations (IR) in
China. He is the author of International Human Resource Management
in Chinese Multinational Enterprises, Labour Disputes and Their
Resolution in China, and Strategic Human Resource Management – Keys
for Managing People.
Wei Sunis PhD candidate in Estonian Business School. She achieved her
MBA degree and then worked as a business consultant for her own con-
sulting company. Her research interest is mainly change management in
Chinese organizations. Currently she has several papers about change
management published in different international journals and her disser-
tation is focused on behavioral factors of organizational changes in
Chinese companies.
Lucia Vojtkovais a 2007 graduate of Eastern Kentucky University. She is
currently pursuing her MBA from Lubin School of Business at Pace
University.
viii
The Authors
Jinmin Wang is working as Lecturer in international business at
Nottingham Trent University. Currently, he is also a PhD candidate at
School of Business, the University of Northampton. He was a Research
Fellow at Asia Research Centre, London School of Economics and
Political Science in 2003–2004. His research interests include interna-
tional trade governance and development of industrial clusters in develop-
ing countries.
Fangrui Wang is a PhD candidate of management science and engineer-
ing in National Institute for Innovation Management of ZheJiang
University in China. He achieved his master degree of business adminis-
tration from the same university and then worked as R&D director assis-
tant in a firm for one year. Now he is going with his dissertation after
3-years work on indigenous innovation based on case studies.
Gong Wenis teacher of Business School, Beijing Technology & Business
University. He has got PhD from Beijing Normal University, Department
of Psychology in 1997, and majored on Psychometrics. He used to be
human resource management consultant, business trainer, and manager
for about 10 years. He managed and implemented the HR consultation
business and projects, involved projects include: Assessment, Placement,
Evaluation system, Designed position responsibilities, Created HR man-
agement platform, especially on higher level manager’s assessment, selec-
tion, and training. Recently, he published about 10 papers on Leadership
style, Enterprise Lifecycle Theory, and Organization change.
Zhang Xinyan is a Human Resources Manager at Xinjiang Medical
University, China. Her research interests include comparative studies of
staff recruitment, turnover and engagement between China and
Australia, and performance management in China and Australia.
ix
Introduction
This book focuses on two relevant topics: organizational changes and
China. Organizations in both, developed capitalist countries and in tran-
sition and emerging economies, need changes in order to be competitive
in global economy.
To implement organizational change is not an easy task. Kotter (1998)
has watched more than 100 companies trying to make fundamental
changes in order to help cope with new environment. A few of these ef-
forts have been very successful. Porras and Robertson (1983) performed
meta-analyzesofchangestudiesanddiscoveredthatfewerthan40percent
of the change efforts produced positive change.
Thestudyofstrategicbusinessunitsin93medium-andlargesizedfirms
showedsevenimplicationproblemsthatoccuredinatleast60percentof
the responding firms, as follows (Alexander, 1985):
1. Implementation took more time than originally allocated.
2. Major problems surfaced during implementation that had not been
identified before.
3. Coordination of implementation activities was not effective enough.
4. Competing activities and crises distracted attention from implement-
ing the strategic decision.
5. Capabilities of employees were not sufficient.
6. Training and instruction given to lower-level employees were not
adequate.
7. Uncontrolled factors in the external environment had an adverse
impact on implementation.
In order to compete successfully in the information age, the strategic
emphasis has shifted from the effective management of tangible assets to
the effective utilization of human capital (Dess, Picken, 2000). The entire
organizations collectively must create and assimilate new knowledge and
learn to compete in new ways.
x
Introduction
In 1978, China initiated an experiment with private ownership and
opened up to the outside world (Waldman, 2004). Although China is one
of the fastest developing countries in the world, with an 8–10 percent an-
nual growth rate averaged over two decades (Hampden-Turner and
Trompenaars, 2002), and has become the second largest economy in the
world, when measured in terms of purchasing power parity and gross do-
mestic product (Alon, 2003), sustaining this growth is presenting China
with quite a challenge (Fulin, 2000).
The Chinese economy, previously a relatively closed system is on a re-
form path toward an open, market-driven system. After the war and revo-
lution China experienced thirty years of recovery period from 1949 to
1978 (Qin, 2005). In 1978, an ambitious reform program was launched in
China. Rural economy was de-collectivized, private and semi-private
enterprises mushroomed, and the state sector steadily shrank (Zhang,
2004). Reform has been accompanied by decentralization of economic
control. The rigid monopoly of the government over foreign trade and the
policy of autarky were abandoned (Foy and Maddison, 1999), individual
achievement, materialism, economic efficiency, and entrepreneurship were
encouraged (Tian, 1998).
The economic reforms Deng Xiaoping started in 1978 have increas-
ingly introduced market forces into the socialist system. China’s emerging
“network capitalism” represents a unique blend of Western market capi-
talism and collectivist values (Boisot and Child, 1996).
Several major developments have given special momentum to those
changes: China entering the WTO, opening the western regions of China,
building up an information network, transforming new management sys-
tems nationwide, and encouraging innovations and entrepreneurship
(Wang, 2003).
China has also experienced tremendous economic growth as a result
of post-1978 economic and social reforms (Yao, 2006). Currently eco-
nomic reforms in China have come to a stage of reforming and recon-
structing its enterprises (Wei, 2003). This is a key step toward the final
success of the entire economic reform process, which has been made
clear by the Chinese leadership (ibid). The dominance of state enter-
prise is one of the major distinguishing features of Chinese economy
during the period between 1952 and 1975 (Bian, 2005). Even today,
under the context of entry into WTO, the reform of unprofitable state-
ownedenterpriseisstilloneofthekeystothefateofChina'seconomic
reform in the twenty-first century (ibid). All these provide a national,
cultural, and institutional context of understanding the organizational
changes in China.
xi
Implementation of Changes in Chinese Organizations
Through changes in the macro environment, the challenge has been to
internalize a new type of organizational behavior in order to operate suc-
cessfully under unfamiliar conditions. Therefore, the focus of the change
process has shifted from product innovation and technological change to
behavioral aspects of change and to attitudes about change (Bergquist,
1993). The organizations’ ability to adapt to change depends on individ-
ual employees and how they react to changes, since organizational
change has been seen as an individual-level phenomenon, because it oc-
curs only when the majority of individuals change their behavior or atti-
tudes (Whelan-Berry et al., 2003).
Research about managing organizational changes have been mostly
done in well established capitalist countries. There are only few studies
done in Eastern Europe and other countries in rapid change process.
The success of changes depends on several factor: on planning, scope
of changes, but critical resource in change management is human factor:
the people who plan the changes and people who should implement the
changes, and also people affected by changes. People’s attitudes are
shaped by their previous experiences, their historical experience. Also
cultural accounts have impact on ways how changes are planned and on
employee reactions to changes.
To implement changes in transforming economies according to rules and
plans, which have worked in established capitalist countries, may not give
desired result: people are different. At the same time there are certainly
elements, which work in all countries or could be adjusted to different con-
ditions. There is triangular model for change worked out on bases of
Western theories for using in analyzing changes in Eastern- European or-
ganizations (Alas, 2007). These countries have similarities with China:
both have tried to build communism and lived in totalitarian rezhime,
which did not allow different thinking. Therefore people of China and East
Europe may have some similarities. This assumption is confirmed by Ruth
Alas’ experience, gotten by teaching Chinese students. It makes for
Eastern-European researchers to understand Chinese people than it is to
Western researchers.
The book consists of three parts. Book starts with theoretical model
for analyzing changes in organizations followed by description of
Chinese institutional context. There are separate chapters for analyzing
types of changes, process of change, and readiness to change. The first
part is written by Ruth Alas and Wei Sun.
The second part includes case studies from Chinese companies from
different authors.
xii