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Chengdu Bus Company
Transcript of Chengdu Bus Company
CHENDGU BUS GROUP
Santiago Gnananandarajah Muhunthan
What is the case study about?
The case study is about The Chengdu Bus Group (CBG), a Chiness state-owned enterprise (SOE) located in the city of Chengdu in China’s southwest province of Sichuan.
The Chengdu Bus Group (CBG) has encountered a series of problems over the last few years and was in dire need of a real leader to reform the company over the following three years.
Due to financial crisis Dr Chen was appointed as a CEO in 2008 with the challange of reforming the company into a leading Chinese public Transportation Industry.
What is the case study about?
As for his first task Dr Chen had to research all the bus routes that they were servicing and make more logical and efficient routes to ensure costs and resource waste were reduced.
Dr Chen then implemented rewards schemes to benefit drivers who didn't have accidents which in return increased the safety level of the organisation. The majority of staff were also given a pay rise which reduced staff turnover in the front line.
In just two years Dr Chen has made significant changes within the organisation. The profitability and efficiency has increased dramtically, and employees were also performing better and were significantly happier at work.
What are the main issues Involved?
1. CBG faced significant problem with the company's management systems and disastrous financial crisis which deviated CBG from it's goals and visions.
2. Customer dissatisfaction was increasing with negative brand reputation the consequence.
3. Route inefficiencies and lack of company co-ordination was causing a loss of profit and customers. This resulted in an over competitive environment of high profit routes and left market gaps for the remaining travel routes.
4. Employee dissatisfaction was a concern with high turnovers due to a lack of fair and incorrectly aimed rewards or salaries.
5. A lack of streamlined routes, stations and repair workshops resulted in high expenses and inefficiencies.
The main issues can be addressed through
OB theories and applied to the Chengdu Case
Management Systems and Financial Crisis
These can occur through a lack of goals and clear visions of the company and it's future. It is important for Dr. Cheng to:
Create a sense of collective purpose by giving clear visions to managers and employees to explain what direction they are going in. This will assist in creating motivated, connected and dedicated staff (Mcshane & Von Glinow 2013, p.5).
Job satisfaction and customer satisfaction
To increase customer satisfaction D. Cheng must utilise his knowledge, skills and experience to understand the link between employee and customer satisfaction.
Service profit chain model is one of the theories that argues that job satisfaction has a positive correlation with customer satisfaction. Employee's with high job satisfaction will have increased motivation rates and will provide quality service (Mcshane & Von Glinow 2013, p.110). This will create happy customers and increased brand reputation.
Management perception and opposition to change
Dr. Cheng needs to improve the existing manager's perceptions of the changes required to maintain the company. Without full co-operation the company will not be able to successfully implement the reform.
Dr Cheng Must:
Improve self awareness towards perceptual biases through high level management training (Karthick 2010, p.50).
Be aware of the sources of conflict in the workplace and structure the business to support constructive conflict and reduce relationship conflict.
Use policies and procedures to stop or avoid confict within the team members and the organisation.
Employee dissatisfaction, turnover and reward systems
Dr. Cheng should implement:
Competency based rewards and job status rewards should link performance and reward systems together to increase motivation, performance and job satisfaction (Armstrong 2010, p. 180).
Lack of streamlined work Processes
The lack of co-operation and communication between Chengdu's services has created an excess of service centers and buses on profitable routes, and a dearth in lower profit but high usage areas.
Dr. Cheng needs to focus on employee behaviour, organisational structure and customer satisfaction to increase his profitability, brand reputation and Chengdu's success.
The main Issues Can be Classified in to Two categories
1. Issues of Main Resources
2. Issues of Human Resources
The issue of resource management:
Dr. Chen transformed Chengdu Bus company in three years. It was reformed from a business suffering through defective management systems and financial crisis to a streamlined internally and externally succesful company.
Dr. Chen studied the problems carefully and devised a series of measures for sucessfull reform. The major leaders of Chengdu city and the company were consulted and met with mostly positive support.
The Issue of Human Resources
Dr. Chen identified that salaries and rewards were not handed out in a consistent and fair way.
This resulted in low job satisfaction and high turnover rates.
Dr. Chen reduced the frequent accidents by linking the wage system to driver's safe mileage accumulation program. This policy improved the safety awareness and practice of the drivers.
Dr. Chen abolished more than 50 penalty provisions and encouraged the management to use rewards positively to motivate their employees.
Armstrong, M 2010,
Armstrong's Handbook of reward management practice: improving performance through reward
, Kogan page, EBL Ebook library.
Karthick, K 2010,
Himalaya Publish House, EBL Ebook Library
Mcshane, S & Von Glinow, M 2013,
Organisational behaviour 6th edition
, McGraw-Hill Companies, EBL Ebook library.
Dr. Chen used organisational behaviour tactics and knowledge to devise a plan for company success using employees to an advantage.
Dr. Chen understood relationships in the workforce create both negative and positive attributes. Therefore time management was important when implementing a strategy to stop opposition or conflict complications from employees.