BTS is a 60 year old company founded by George Bessington in the early 1950s following the independence of Indonesia. With its principal business in manufacturing and selling wholesale
cotton and wool fabric products to local retailers and buyers (including designers) in Indonesia, George had established a highly successful local company that was also well respected. Before migrating to Indonesia, George was a successful cotton grower from Moree in New South Wales and saw the opportunity to manufacture very high quality garments principally sourced from Australia by building on his grower connections. The belief and vision to create a high quality garment manufacturing business but with low cost meant that George quickly earned the respect of local Indonesian retailers and designers. While being able to take advantage of Indonesian’s relative low cost wages, Bessington paid all his staff better than local wage regulations. The local West Java workers loved working for George as he created many reward systems that were ahead of his time such as sick leave and holiday pay, rostered days off from the factory and child minding facilities for his workers who were mainly from the working poor and common local families. Tradition and tales about the company were perpetuated over the years to the extent that Bessington became larger-than-life and everyone knew about those early beginnings. Newspaper clippings were common. The BTS factory in West Java had a workforce up until the time of George’s death in
1970 of over 1000 workers which in recent years had been reduced substantially yet remained at around 700 workers. Also, Bessington had trained his son Modjo in all aspects of the business such that it was commonly known that Modjo was a protégé of his Father. It was not surprising that Modjo since the 1970s employed the same business practices and like Bessington senior, had the total respect of the industry and his workers. Overall, the common business characteristics that defined the first two generation of Bessington’s was built on high quality manufactured fabrics, unique fabric processes in manufacturing, imported high quality cotton grades from Australia, local industry sales to local retailer and designers, employee and customer loyalty and relatively slow but consistent growth. However, in recent times this had been challenged by increasing low-cost suppliers in other countries, low-cost imports into Indonesia, perceptions of quality, manufacturing safety and employee standards across the industry generally.
More recently, Modjo’s son Tommy and sister Khadija had joined the business. While both siblings had been educated in Jakarta, Modjo insisted they both complete an MBA in Australia. Khadija had also followed this up with an undergraduate degree in fashion design. Tommy in recent times had been more vocal for change and Khadija had supported a move to increase the value-added component of design, customer reach and product depth from essentially large-batch production of cloth to making designer clothing for larger offshore markets. This meant forward integration by not only manufacturing the textile cloth but also moving to a new manufacturing stage of making and supplying retail firms. Tommy had introduced to the Board the idea of exporting to Malaysia, China and Japan the large-batch production output while simultaneously supplying designer and retail outlets across the world. This conflicted somewhat with the view that cheap imports would hold sway and that customers wanted low-cost products from China and Bangladesh with the Board often pointing to low-cost retailers such as Cotton-On in Australia and JC Penny in the U.S. Tommy and his sister nonetheless saw an opportunity from Manufacturer to customer via the web and business to business (B2B) opportunities with quality-seeking buyers.
Khadija had also pointed to the increasing need for more visibility at Indonesian Fashion week attracting up to 100,000 customers. Increasingly, Tommy had identified problems with manufacturing safety and control in countries like Bangladesh with major brands such as Benetton, H&M from Sweden, Nike, JC Penny and Wal Mart in the US, David Jones and Myers in Australia seeking alternative suppliers. According to Tommy, BTS could take advantage of their name by building new relationships with retailers and designers since many were looking for long-term relationships and the reliability that comes with large volume garment production. Basically, Tommy and his sister’s drive for growth led to disagreement and contradictions in the Board. At stake was BTS traditional approach to manufacturing positioned around large-batch production in cotton and wool textiles to making designer and retail fabrics. This prompted many Board members to comment privately that Tommy and Khadija were trying to be too smart to soon and the company would not cope. Similarly, product and manufacturing change needed to be supported by dramatic staff decreases and management restructuring to streamline cost and efficiency, two-way product stretches between the old and the new production while tackling competition from other suppliers. While Modjo was immensely proud of his son and daughter, in a short time they had created mayhem in the management ranks prompting local analysts to downgrade the value of company stock and medium to long-term outlook. © Peter A. Murray, USQ Business School
1. Develop at least six (6) realistic assumptions that you can add to the issues and problems expressed. These might typically be related to management, change processes, managerial information systems, technology, competitors, Customers and so on. Use at least two (2) sentences to describe each assumption (150-200 words).
2. In reference to the classic article by Larry Greiner (Reading 10), explain what is happening between growth and change in BTS. Compare this with what Malhotra and Hinings indicate about continuity and change (Reading 9) (500-600 words).
3. How does the problem statement for BTS resemble what Gersick indicates about a systems deep structure (Reading 6; see also Chapter 3 Hayes)? What consistencies exist between the facts in BTS and the descriptions of deep structure by Gersick (500-600 words)?
4. In reference to the article by Dailey and Browning (Reading 4; see also Module 1), explain how and why narratives and storytelling was useful to the company (300 words).
5. Refer to Chapter 6 of Hayes (2014) under the heading ‘Collaborative Modes of Intervening’.
Discuss which modes might change agents in BTS use and why? Who are the change agents in
BTS if change occurs? (300 words)
6. Given the Typology of Organisational Change (see Hayes, Chapter 3), which typology may best describe the approach that BTS might adopt and why? (300-400 words).