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Copy of Copy of Chendgu Bus Group Case Study

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Tara Ashwell

on 1 February 2015

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Transcript of Copy of Copy of Chendgu Bus Group Case Study

Organisational Behaviour Assessment 2A
Issues that needed to be considered through the change management process included:
Large scale reform with 14000 staff and 533 managers some of whom would be disadvantaged by reform
Structure of CBG and external investors
Time constraint of 3 years for the reform
Rapid change
Resistance from stakeholders and employees
Complicated working relationships and politics


The overall result from the changes implemented by Dr She Chen to the Chengdu Bus Group has transformed the company from receiving customer complaints and negative results to winning awards in just two years. These changes were implemented swiftly due to the short time frame of three years, not always met with a positive response from employees due to the previous inequitable polices and structure of the company.
Faced with may challenges, Dr Chen addressed them individually and approached each issue differently. From the ambitious managerial reform which was extremely sensitive, addressing managers and their positions, to the structure of CGB and external investors which simplified the company and its branches. Then questioned and changed the salaries and rewards for staff, bringing greater job satisfaction and incentive for them to perform at a higher standard.
With all these issues within the company as well as unsatisfied staff both before and during the process, CGB has been transformed into a positive business under the direction of Dr Chen.
Issues of Chengdu Bus Group
There were many issues that needed to be addressed by Dr Chen in the reform including:
Management Issues
Floored Management Systems
Financial Crisis
Complaints, Customer dis-satisfaction
Direct Competition from other owned subsidiaries
Different profit rates for different routes creating high competition in some areas
Inefficient and inequitable Salary System
Lack of safety measures leading to frequent accidents

Resistance from stakeholders and employees
The theory that relates to this issue is the social cognitive theory. Behavior is defined as the way one acts towards themselves and others around them. This theory is all about learning from watching what others do, and then replicating their behavior. It is common everywhere in the world. In regards to the Chengdu bus group we may find that stakeholders and employees are likely to face resistance and this may be because of the fact that the part of Chengdu bus group has not yet shown themselves as a whole corporation to be promising and a guaranteed success. As in the past it was evident that the bus group had poor management, financial issues and a number of complaints and unhappy customers this would lead to stakeholders and customers becoming terribly resistant and likely to hold back with this company.
The Chengdu Bus Group (CBG) is a Chinese, state-owned enterprise with more than 4,000 buses and 14,000 employees. CBG previously had serious issues in which Dr She Chen was appointed to address.

Dr Chen was given a short time frame of 3 years to transform the organisation in which he succeeded through implementing strategies and change management to turn the Chengdu Bus company around from an inefficient, poor performing organisation with poor safety measures, dissatisfied customers and disengaged staff to a successful performing, profitable, efficient operating organisation with happy customers, engaged staff and a decrease in bus accidents.

Despite the fast paced reform, internal politics and resistance CBG successfully transformed in 2 years and received an award for it's successful reform.

Aysen Altiparmak
Tara Ashwell
Lyndall Boskovic
Matthew Grech
Daniel Grozdan

Group 3 Contributors:
How the issues can be addressed considering Organisational Behaviour theories
Complicated working relationships and politics
Maslow’s hierarchy of needs ties in well with the issue of complicated working relationships and politics. If we investigate this theory it is evident that needs of any individual are important and need to be fulfilled in order to create harmony and positive working relationships and politics. Physiological, Safety, Love and Belonging, Esteem needs, and actualization needs are all part of this theory and tie greatly in with working relationships and politics. These needs need to be met in order for individuals to function sufficiently .This theory of needs was created to try and show what people need satisfying so that they can fulfill themselves at work.
Large scale reform with 1400 staff and 533 managers some of whom would be disadvantaged by reform.
With this issue it is important to consider employees emotions. Over a quarter of employees being disadvantaged by the reform, emotions and stress of all employees will be high. Even for staff not directly affected by the reform they will still attach emotional marks to the sensory information, be it positive or negative. Leaders need to activate their emotional intelligence; have awareness of their own emotions and manage it and also awareness of other's emotions and manage it, to minimise the impact on employees. (Clercq et al, 2014)
Chendgu Bus Group Case Study

Rapid change: According to the expectancy theory linking in with the concept of rapid change with regards to Chengdu bus group we know that, individual motivation depends on what the outcome would be like, and in this case change will be welcomed only if the result of change will be likely to motivate further or to bring about positive change. This can be things such as a better performing organization with adequate safety measures in place, satisfied customers, engaged staff and an efficiently operating business. It is evident that as a motive. Therefore if the outcome is more desirable for the stakeholder, more motivation is obtained resulting in the desire to achieve it.
Structure of CGB and external investors
The team dynamics and structure of CGB along with external investors created inefficiencies and costly losses to the organisation. With Dr Chen's amalgamation of the branches, repair work shops and bus stations is changing the dynamics for these 'separate' businesses. With Workload divided across the areas, workshops amalgamated and employees working together will effectively accomplish tasks, satisfy their needs and maintain operations. This is achieved with the use of the Five Cs that depict most effective teams; Cooperation, Coordination, Communicating, Comforting and conflict resolution.
Time Constraints of three years for the reform
The issue of time constraints relates to theories of leadership, in particular Path-Goal Leadership Styles. Which comes from expectancy theory as leaders select a track for their employees. Leaders then are able to adapt the style needed. There are four styles; Directive, Supportive, Participative and Achievement- oriented. With CGB leaders using these method generate efficient work and well preforming employees.(Dixon ML et al, 2010
McShane SL, Von Gilow MA, 2013, Organisational Behaviour, Emerging Knowledge, Global Realty, 6th edition, McGraw Hill.

Clercq DD, Bouckenooghe D, Raja U And Matsyborka, 2014, Unpacking the Goal Congruence - Organisational Deviance Relationship: the role of work engagment and Emotional Intelligence, J B Ethics, Springer Science+Business Media Dordrecht.

Dixon LM, Hart LK, 2010, The Path-Goal Leadership Styles on work group effectiveness and Turnover Intention, Journal of Managerial Issue Vol XXII number 1 Spring, Pg 59-69.

Change is inevitable in all forms of business, weather it be a change of salary job description or even consolidation. The following presentation highlights and discusses the case of The Chengdu Bus Group and the challenges that were faced by managers, front line and back up staff.
The Changes weren't an easy thing to accept in this case however, with a growing list of customer complaints, the changes were unavoidable for a business to evolve, grow and even survive. The newly appointed Director of The Chengdu Bus Group used many standards and formats as well as changing techniques that weren't working. Rewarding staff rather than punishing them, offering better working conditions and fair pay structure to employees.
The changes were swift, calculated and deliberately executed with stunning results putting the business in a healthy state for moving forward. The changes included a new management reform simplifying the four existing branch companies and offering financial rewards for performing employees.
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