Leadership Crisis At Steelworks’ Xiamen Plant 454b1k

UBSE1123-02 ORGANIZATIONAL BEHAVIOR AND DEVELOPMENT

LEADERSHIP CRISIS AT STEELWORKS’ XIAMEN PLANT SESSION 2018/2019 SEMESTER 2

NAME

:

LUKSHMAN RAO (MBS181073) YARTINI (MBS181072) KASTHURI (MBS181071) LOGEESH (MBS181064) DASHINI (MBS181063)

LECTURER :

DR ONG CHOON HE

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Table of Contents Case Study Overview............................................................................................................................... 3 Question 1 ........................................................................................................................................... 4 Question 2 ........................................................................................................................................... 5 Question 3 ........................................................................................................................................... 6 Question 4 ........................................................................................................................................... 7 Summary ............................................................................................................................................. 9

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Case Study Overview Rajesh Kumar, a chief executive officer (CEO) of Singapore’s Steelworks has never failed to respect C.H Chan (GM of Xiamen, China Plant) Chan has been known as an efficient and hardworking man who had faced and overcome a colossal of issues in the China Operations of Steelworks. Kumar did recall the warm and cordial relationship he had shared with Chan during his initial days at Singapore. Kumar was a big irer of Chan’s style of functioning and loved the way how the China Operations has been done. He was more than happy to have Chan run the factory in Xiamen. This shows that Kumar had no issues with Chan during his reign in Xiamen. Chan didn’t agree to Project C3 since from his perspective, Project C3 oversight from the corporate centre would create many redundancies and would slow down the execution of many opportunities. To Chan, building guanxi between local stakeholders was a better idea in the competitive environment than Kumar’s Project C3 which might cause temporary disruption and Kumar did not compare his Project C3 with the existing operational efficiencies that he had spearheaded in China. Chan did voice out his opinion, but it is the CEO’s and other board decision whether to go ahead and proceed with Project C3 or not. And they did. Chan has raised a new issue by refusing to sign the audited financial statements for the Xiamen factory. Chan was the only person to do this among all other operations across the globe. Meanwhile, Kumar realized that there were hidden signs of operations not going very smoothly in Xiamen, China. There were many resignations of key personnel from the finance department in Xiamen within six months of starting work there. The colleagues were seated in in different corners of the office from other functional areas. When Ling proposed a reorganization of the structure, Chan refused to share it with his team in Xiamen. Chan continued his stubborn stance in refusing to sign the documents from the auditors. Since Chan wants to talk to Kumar with no middlemen involved. Kumar decided to rotate Chan back to Singapore and to give him his next position to further his career development. Kumar decided to have a face to face meeting with Chan and he started the meeting by patiently laying out his well-crafted plan for him and in meanwhile, he did congratulate him for another year of stellar performance. When the key issue (not g the audited statements) brought up to Chan, Chan remained calm and raised no objections during the conversation. Chan requested for some time to ponder over what Kumar had shared with him and he was given a couple of days. Kumar and Chan agreed to meet after two days.

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But Chan has gone back to Xiamen the next day and he rejected the offer to be rotate back to Singapore and the position as well. Kumar and his team decided to go to Xiamen to settle this once it for all. Meanwhile at Xiamen, Chan was angry because Ling was in his position in Xiamen. Chan was disrespectful and rude to Ling. Once the Singapore team has arrived, they got to know that when the auditors visited the plant, Chan took them to the employee conference room and told the employees that these auditors were the reason why they were not getting their salaries for this month. Kumar volunteered to meet Chan and Chan remained stony silent. After all the hassles, Kumar decided to relinquish the GM position and hand over the seals and documents to Ling since Chan is not cooperating and he had difficulty getting the long-serving general manager of a plant in China to sign off on the current year's audited financial statements. Chan responded by locking the office and leaving. And he emailed Kumar the next day that he was sick and could not come to office. Kumar ed Steelworks legal counsel in Beijing, and he was advised to break the door to the GM’s office. An eviction notice has been drafted to end Chan’s employment with Steelworks. All the seals retrieved by Kumar and he has changed the signatories to the legal entity in the Xiamen factory and the operational power was handed over to Ling. Then the team left to Singapore.

Question 1 Taking the perspective of C.H. Chan, what are the contributing reasons that make this episode happened? Looking at the scenario of the situation, Chan was in the position where he can make the situation better, but he responded based on his own perspective that lead to his resignation. Chan has spent Steelworks for his entire career and he’s aware this behaviour could jeopardize his position as a GM, and as he could have responded professionally by calling a meeting with the team and explain himself the reason behind, he refuses to sign the audited report. Apart of these, his fiercely possessive of his team and had an autocratic style of personality he opposes his deputy’s proposal to reorganization the management structure of Xiamen Plant. Individuals like Chan as a Singapore origin working China will foresee cultures with interdependent social orientation. Thereby, when engaging in the decision-making process the former is more likely to take into consideration the injunctive norms, guarding stability within the society, while the former is more likely to follow their introjected goals. Hence, his 4

decision to respond at the conference room to the employees that the reason they are not getting the salaries is because of the auditors. He may have said that as a joke, but he did not defend himself by saying that as a joke also, this shows he was serious on his statement in that conference room. As at man who have faced many storms throughout his career, he should have aware this statement is not professional. As a GM he also faces the situation of high turnover rate at the financial department. By this he could be afraid that his leadership might be questionable by the senior management personal. With the vast experience, everyone believes that Chan could develop his successor but in this situation he’s failed. Chan would have expected Kumar would have ed his decision on the not g the financial audited report, but it was overruled by Kumar. This make Chan to feel his position as GM is not having the power to say NO. As conclusion, Chan would have respected if Kumar had approach in a different manner. Since Kumar knew its beyond his control, he should have spoken directly to Chan instead of getting the COO and CFO involved to get any clue behind Chan decision of not g the audited financial report.

Question 2 How would you describe the relationship between Kumar and Chan? To what extend was there trust between them? Respect is a pattern of behaviour that is important in a healthy relationship. Kumar has shown a lot of signs of good respect to Chan. Since the beginning, Kumar was a big irer of Chan’s working style, praised him all the time, and he was happy to have Chan run the factory. As mentioned earlier in the case study, decisions taken as a team were meant to be strongly adhered to and individual deviations after decisions will not be appreciated by the CEO. Even though Chan is unhappy with Project C3, but he must respect the company’s decision to go on with the Project C3 even he voiced out his opinion. To pinpoint in this case, the audited statements and Project C3 seemingly had nothing to do with each other. Nobody knows why there was a such a behaviour from Chan in the first place. Even Kumar has the power to fire Chan under the reason of breach of duty, he did kept calm and investigated further. Because, Kumar understands that Chan is one of the longest working employees of the company and need to be treated with a lot of respect. Kumar still trusted Chan with his 5

work and didn’t suspect him that he has any issues with his financials. Moreover, the auditors did not have any issues with his financials too. Nobody understands why he was creating a big fuss about it. When Chan was given some chances to talk with Kumar, he failed to do that. He disrespected Kumar by not g the audited statements, gone back to Xiamen after agreed to meet him after two days, by remaining silent when Kumar approached to talk to him in Xiamen Plant, refused to hand over the seals to Ling and lock his room and did not show up the next day. Even Chan was a senior staff, he has to respect the CEO and board’s decisions because at the end of the day, Chan is still a staff who still works for them. Kumar trusted him as a good employee of the company and treated him with so much of respect, but Chan’s actions made Kumar to relinquish Chan’s GM post. Chan was fully responsible for all this chaos. Chan was fairly treated in this case by Kumar. Kumar is a teamwork guy and Chan is a guy who do not like communicate much with the other . He always expresses his strong opposing views. Even Kumar respects and ires Chan’s working style previously. It is obvious that Kumar and Chan cannot get along. In a nuThe relationship between Kumar and Chan is nothing personal but it is all about a mutual respect among working colleagues or between a dynamic personality CEO and a best GM among the operations.

Question 3 To what extend did the cultural difference between (a) Kumar and Chan, and (b) Southern Metals and Steelworks play a role in this episode? First of all we can take a peek at Kumar and Chan's experience. It’s obvious that Kumar is an Indian by starting point and Chan on the other is a Singaporean however has been working long in China. Kumar originates from the Southern Metals which is an organization from India with long conventions and Chan began his wore in Steelworks which is initially was a Singaporean organization. Along these lines, in view of all the data above accumulated from the article plainly Kumar practice the cultural structure from the Indian culture and Chan is normally from the Singaporean culture. Currently till what expansion does this social contrasts influence the circumstance of the organisations. In light of the model by Hofstede, there utilize 4 factors which characterize a culture which is individualism, uncertainty, power distance and masculinity (Hofstede, 2009). Based on studies done upon the care study scenario the differences between the cultures in India and Singapore are the first thing that can be identified. The first dimension is power 6

distance which means the extent of inequalities which exists between people. For India possess distance is very high since it is a country based on hierarchy. Inequality has a strong mot in India for countless generations. Meanwhile Singapore is also high on power distance since this is due to the respect for elders which Singapore as well as other Asian countries have in common. In line with this comes the power distance between people in power (management) and employees. Next dimension is individualism; here India has collectivist nature as well as individualistic nature, but more towards collectivism nature which we could see via the strikes and demonstrations in crowds. Meanwhile Singapore is definitely a collectivist nation, it is a "toe" and not a Another dimension is masculinity, which is all about going for success. In of achievements and power, India it is very high is masculinity especially since it is one of the oldest country and has along surviving culture. Meanwhile in Singapore it is not all about success, it has a more feminine side, where values are more important, and people ate modest and humble. Final dimension is on uncertainty avoidance, which is on accepting uncertainties, being flexible. In this dimension is a big contrasting difference between India and Singapore where in India is acceptable to not to know about the future, no strict rules and being feeble. However it is the total opposite in Singapore where everything is planned strictly followed and adhered to by rules.

Question 4 What could Kumar have done differently in his relationship with Chan in the Project C3 change initiative? From the case investigation, the conflict occurred in Steelworks prompted an unsavoury break between the new doled out CEO, Kumar and the GM of the Xiamen's plant Mr. Chan. This is for the most part because of the diverse logic of the new CEO with his practice which can be condense as istration culture contrasts and the approach taken by CEO for the C3 venture change activity. There are not many reasons why Chan have acted in such way towards his CEO and the other supervisory crew. Kumar, as the association could have adopted some unique strategies towards their relationship in the C3 venture activity. Most importantly, from Chan's perspective he saw that the new corporate centralization by the C3 venture is an interruption and it is overabundance of control that pointlessly made. Chan could be directly as his identity as brilliant execution in task and autocratic pioneer would imagine that excess practices will reason for some business openings misfortune. Chan emphatically accept with his capacity in structure solid system with neighbourhood partner 7

and Xiamen industrial facility chiefs he could make aggressive market in China. This has demonstrated with his past records and he been the so far, the ideal match as GM for the Xiamen factor. That is the means by which Chan is contemplating himself in this association. Consequently, there are identities and istration style conflicts, yet Kumar as CEO could have given some breathing space to Chan to express his sentiments. Utilizing the change the board which mean Kumar realizes his drive will without a doubt change the whole association current culture so he ought to have thought about somewhat more about the senior representatives who are likewise in the executives’ level on their takes and genuine belief before he really settling on the quick choice. Since by reporting the C3 venture activity without beginning discussion with the senior representatives could have affronted they or they felt dismissed. For this situation, Kumar keep running his arrangement without tune in to Chan's difference voice when propelling the Project 3C. A decent pioneer ought not to be numbness when there is a varying assessment from your subordinate and should discover the avocation of that difference. A strategic initiative plan will be the structure of good relationship and having a decent listening capacity. Kumar should discover from Chan's sentiment and concerns. On of Kumar never tune in to Chan's feeling, it results despite the fact that Chan present at the greater part of the C3's gatherings however he demonstrates he is no line up with the undertaking and other colleagues. All things considered, amid the declaration made Kumar ought to underscore on what is the qualities and vision focused to accomplish by showing this drive. He had been progressively open in conveying his vision and target consequence of the C3 venture towards Steelwork business improvement which may pull in the enthusiasm of Chan who is more execution arranged. By clarifying on the reason of why Kumar has confidence in an open model and in a typical work culture of the organization may helped entire association having same mentality of the vision and objectives which ready to maintain a strategic distance from clashes. The better correspondence and clear expectation will guarantee every single fit chief and staffs that are characteristic incentive to the organization are adjusted for same intrigue. On a very basic level, we discovered that being a pioneer we ought to have the capacity to impact relationship among different pioneers and devotees who are planned for genuine changes and the results which mirroring the mutual qualities. In any case, here Kumar and Chan has neglected to make shared trust and regard because of one clash that activated due to C3 venture. In term of regard, Kumar send another chief Ling to evacuate Chan without giving authority notice and this had set off the disappointment in Chan where he believed he 8

was disregarded for his position and long periods of istrations. That may me the motivation behind why Chan responded discourteously and erratically towards the evaluators to demonstrate his dissent. Kumar should talk secretly to Chan for the reason of the expulsion/exchange offers and make official declaration after the discourse and keep the dialog as private and classified among him and Chan.

Summary In conclusion, obviously by acting contrastingly Kumar could have been increasingly effective in taking the upsides of Chan's capacity and authorities’ capacity in dealing with the Xiamen plant. Chan would have been a successful er and director if Kumar has putting some exertion in tuning in and clarifying. In this new worldwide period, pioneers ought to figure out how to have the capacity to acknowledge assorted mentality, diverse social measurement, sharing thoughts, trying to create solid relationship, and being the cooperative person in light of the fact that strategic, information, abilities and encounters are pointless without the basic comprehension of human yearnings that associating the pioneers to constituents.

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