The future looked bleak and, so proved to be the case for many companies in a similar state in the early 1990s in China, the most likely outcome was that they would be out of business. However, he was determined that this would not happen. He believed that the company have a prosperous future, but only if it could be transformed into a modern, competitive manufacturing organization. In order to make that organizational change process running, he got rid of surplus managers, and created a new organizational term responsible to him, which was combined one layer and 5 senior managers. In contrast, the previous director had a 15-senior-managers term. To bring the management term co-operatively together and to tackle the underlying problems, he organized some regular off-site management seminars. This was led by outside organization specialists and some officers in Development Department.
In 1994 there were 130 employees, for that small film it is visible to see inefficient and superfluous labor. He made an alliance with other factories, which was also facing making surplus employees redundancy. An employee in state-owned enterprise shifting into the non-state-owned enterprise could experience a drop in income and security. However employees still wanted to keep their privileges rather than risk the transition to the non-state-owned enterprise. With undeveloped welfare, unemployment means cutting that family’s financial support, so how to make unemployment became the focus of organizational change.
Implementing the strategy
It is unavoidable to make unemployment in order to survive in a fiercer competitive environment. Firstly, he set up a good relationship with local government, for local government they wanted to keep low redundancy rate, but he had to reduce workforce that would make 50 employees unemployment, so how and what was the equilibrium. After two weeks discussion, he agreed to reduce that number to 30.
By contrast, the local government would explain the reason for diminishing workforce, and both the factory and government would give those unemployed staffs extra welfare. Secondly, according there was insufficient skilled employees and surplus employees, the management term adopted the local statute for business, which is restricting ordinary employees’ age. For male the restricted age was 50 years old and for female was 45 years old. Alternatively, It was believed that are less vulnerable when it comes to redundancies, having investing a lifetime of service in return for job security. Therefore, the management term organized retirement pension, social security-type pensions and unemployment pension. Now the factory succeed in getting rid of superfluous labor and employed some skilled staffs who had qualifications.
After setting the new management term the form of organization at Shuguang went hand in hand with its move away from corporate bureaucracy to more efficient management. Furthermore without a clear direction which everyone understood and believed in, the factory would fragment and collapse into a disorientated mass of individuals. To avoid that, the management and staff openly discussed and debated the new strategy for the factory. In order to enhance the competitiveness, the factory would make those challenges: developing a distinctive product and industry focus, reducing its cost, improving quality and investing in new equipments and processes.
Having established where they wanted to go, the factory now needed to win orders from its target market and establish a long-term relationship with customers. With their hard work and valid organizational change, the factory set itself two objectives: first, to develop distinctive products and new processes by making a business relationship with the Department Of Chemistry of Shanghai University; and second, to exceed the performance of other suppliers. The factory reputation as a reliable and innovative supplier was growing and they were attracting additional work from both existing and new customers.
The new equipment was then installed in 1995,which was imported from Germany. With that efficient machine, in that year the yield increased dramatically. Furthermore, the factory dismissed 15 unskilled employees, alternatively employed 3 engineers. The outcome Now the factory produced distinctive products including diphenolic acid water-solubility colophony, plasticizer, dyeing accessory ingredients and the natural flavor. It becomes the professional manufacturer of sulfate, food, and medicine series chemical products. And products sell to all the area in China, and also to the U.S.A, Japan, Korea, Singapore, Russia and Iran.
Our natural reaction to change, even in the best circumstances, is to resist. How could Shuguang make the political organizational change go along? From that case some tactics were used in the whole process. Firstly, learning form outside change agent. Outside organizational specialists, who have worked in the similar organization for a long year, tend to do what they have always done, that is all that they know. That is where learning from companies outside the organization can have a power effect in getting managers to adopt a whole new outlook. The effective change agent is thus someone with what Minzberg (1983) call the ‘will and skill’ to engage in the political processes if the organization. The change agent joins problems solving and collaborates action planning among the organization (Buchanan&Badham, 1999).
Shuguang organized many regular off-site management seminars, talking about the steps of factory’s organizational change, analyzing the organizational gap that was existed in management term even in workshops. Secondly, making networks and strategic alliances. Sometimes, the term inside an organization is generally just not up to getting the tasks at hand done. That’s when the powerful turn to networks and strategic alliances to leverage their power (Dilenschneider, 1994). To be able to create multiple networks, Shuguang set up management network, products design network, and then established strategic alliances with other suppliers, even make a tactical network with local government.
To sum up, Knowing what you need, building your networks one by one based on what you can contribute as opposed to who you want to use. Subsequently, getting employees involved in problem solving. Having a simple problem-solving process gives staff a common language, a routine to follow. Employees in a company could feel part of the factory when they recognize the problem solving in business (Drennan, 1992). In Shuguang the managers and staffs openly discussed and debated the new strategy for the factory. By that encouraged all employees to regard theirselves as parts of factory. Finally, leadership is another function to make organizational change.
Change will always cause discomfort and dislocation and staff involved will look to their immediate manager or leader for recognition, guidance, and support – that’s why the ability of these frontline leaders will make or break a change initiative (Illingworth, 2001,p30). From that successful political organizational change, it demonstrated that the director of Shuguang have already established a good leadership.
Leadership must be seen to be present through the alignment of managers’ actions with the leader’s vision. What leaders say must, in the end, result in actions that drive an organization forward (Gautier, 1999,p10). With that leadership the factory has been bringing about significant organizational changes in management term. The creation of that process was not just an attempt to create a more efficient method of distributing products. It was also seen as a key element in creating a more entrepreneurial culture in Shuguang.
The most effective way to make political organization change is to put people in a new organizational context that imposes new roles, responsibilities and relationships on them. Organizational change needs to focus on the political incentive and behaviour, rather than abstractions such as particular strategies and tactics. Mann (1986) separated organization with political organization, ideological organization, economic organization and military organization. Each of them implies distinctive forms of sociospatial organization by which humans can attain a very broad, but not exhaustive, package of their myriad goals. However, Buchanan;Badham have systematically laid out a paradigm for the political analysis of organizational structure and processes. They have attempted to integrate power, politics and organizational change. Change Management is a political turf game.
Buchanan and Badham clearly defined the relationship between power, politics and organizational change. They also not only deeply illuminated the political behaviour, which is the natural consequence of ambition, organizational recruitment, appraisal, training and promotion policies, even of retribution and revenge, but also explained the individual, decisional and structural roots of political behaviour.
Furthermore, they regarded change agent as political entrepreneur, who is willing to attend the organizational change with power and influence. Change agent has the ability to figure out how and what organization should change, and then use their skill to get things done in their fancy way. From their splendid and honest theory, it is seemed that political power plays a principal role in organizational change.