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Chengdu Bus Group

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Siobhan M

on 15 April 2014

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Transcript of Chengdu Bus Group

Chengdu Bus Group
Chinese, state-owned enterprise
More than 4000 buses and 14000 employees.
Financial crisis and customer complaints
Dr She Chen appointed as CEO
Three years to reform CBG

Dr Chen implemented 3 Reforms:
1. Fast -paced Managerial Reform
2. Simplifying branch company structure
3. Salaries and Rewards

organizational change
strategies were used
to implement these reforms.
Ethical leadership shapes employees' behaviour

Situational Leadership Theory Model:
- Telling, selling, participating and delegating
- Dr She Chen used telling and delegating to clarify performance goals and provide standards.

A directive style leadership: became successful because employees lacked motivation and rapid change was needed.

The three reforms he implemented were:

1. A Managerial Reform
2. Simplifying the branch company structure
3. Changes to Salaries and Rewards

Two years after the reforms, the Assets Supervision and Administration Commission of Chengdu City awarded CBG for its success.
1. Fast Paced Managerial Reform
1. Fast Paced Managerial Reform
Long-standing relationships among the

Disrupting these relationships might cause resistance to change

3 years to reform: a motivating force

“All change must face resistance, complaint and even rejection. What I have done is not for myself, but for the company.” - Dr She Chen

1. Fast Paced Managerial Reform
Motivation, self-efficacy and perceived clarity of the organisation vision were low

Well-defined goal: created a sense of urgency

Feedback was sought by Dr Chen from the mayor and leaders of the city before implementing his reforms.

Feedback also improved employees’ clarity of the organisation vision and gave them something to work towards.
2. Simplifying Branch Company Structure
Action Research Approach
combines action (changing attitude and behavior) and research (testing theory through data collection and analysis).

(Exhibit 15.4 on pg. 490)

1. Dr She Chen 2. Inefficient branches 3. Uniform structure 4. Success
Simplified organisational structure divided the city into four quadrants

Strategic vision by Dr Chen gave employees a sense of direction

This reduced confusion and competition and minimised the fear of the unknown.

Simplifying the branch company structure provided clarity and motivation for the employees.

1. Fast Paced Managerial Reform
Task force team: multi-skilled, temporary teams

Their assignment: solve a problem, realise an opportunity or design a product or service.

Limited time to transform the organisation

Autocratic leadership style: used managerial skills rather than team building skills to achieve goals
Transactional leader: a leader that is focused on helping an organisation to achieve current objectives efficiently.
- linking job performance to objectives
- ensuring employees have enough resources
- gain compliance by using rewards and penalties

Job dissatisfaction and effecting operations.
- implementation of wage system, 'drivers safe mileage accumulation'

Both a transactional and a transformational leader

Organisational change
Changes to the salaries and rewards system was faced with resistance.

Back-up staff and managers complained that some front-line staff were receiving wage increases and bonuses.

Why employees resist change:
1. Believe the change will fail
2. Inadequate skills or knowledge
3. Lack of role clarity

A future vision that relates to employee’s values and needs is more motivating than a vision that reflects benefits for the organisation.

For this reason, the changes to the salaries and rewards system were so successful.
Chengdu Bus Group (CBG)
Organisational Change
Team Dynamics
2. Simplifying Branch Company Structure
Organisational Change
2. Simplifying Branch Company Structure
2. Simplifying Branch Company Structure
Team dynamics
3. Salaries and Rewards
3. Salaries and Rewards
3. Salaries and Rewards
Team dynamics
Social loafing: the problem that occurs when people exert less effort when working in teams than when working alone.

To avoid social loafing, Dr Chen focused on individual rewards rather than a team-based system.

Team cohesion: the degrees of attraction people feel towards the team and their motivation to remain members

Chengdu Bus Group unified the company by provide individual incentives to reduce the number of accidents

To create a positive public image

The use of teams could have improved the transition to accept these reforms.

Ongoing individual feedback can help to motivate employees.

Shared leadership to provide managers with a sense of control and security over their work.

Strategies for minimising resistance to change:

1. Communication
2. Learning
3. Employee Involvement
4. Stress Management
5. Coercion

3. Salaries and Rewards
Expectancy Theory

(E to P):
Expect that effort will lead to performance.
- Front line staff expected that putting in a greater effort to drive safer would lead to a desired performance.

(P to O):
Performance will lead to desired outcome.
- Safe drivers were rewarded with increased wages and bonuses.

Valance: A
ttraction one has for that outcome.
- Increased pay proved to be an attractive outcome.

Overall, motivation increased.

By unifying the company structure Dr Chen:

Reduced the
process losses,
by removing competition between the company.

pooled interdependency teams

Departmental Teams
by relocating employees who have similar skills into the same unit

Transformational leadership: when leaders change teams by creating, communication and modeling a vision and to help employees strive for that vision.

Dr Chen used transformational leadership to an extent: centralising four sectors, it reduced wastage, over-competition and operation costs.

Limited communication was attributing to the fact that Dr Chen only had 3 years.
By Siobhan Moroney, Julia Torrisi and Ngoc Valerie Nguyen
Full transcript