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The subject company (the “Company ”)is incorporated in Hong Kong in 2011 which the major
shareholder is aShanghai listed ...
The subject company (the “Company ”)is incorporated in Hong Kong in 2011 which the major
shareholder is aShanghai listed company (the “Listed Company ”)and the Listed Company ’smajor
shareholder has been aPRC state-owned enterprise.
mission and vision
Mission: The Company promotes global investors participating in capital market in mainland China,
established the financial bridge between market in the mainland China and Hong Kong, promotes
the mutual development of financial industry in two places and makes due contributions to the
internationalization and enhancement of competitiveness of securities industry in mainland China.
Vision: The Company is providing high-quality and comprehensive overseas investment and
financing integrated financial services with application of international management concept,
financial innovation and services standards to global investors and corporations and becomes
trustworthy and recognized international financial institution for clients and the industry.
The organization change includes organization design change, structure change and culture change:
A. Change in organization design:
- Change in chain of command, as more and more new leaders were appointed in different
departments and senior management. Staff are required to report to more than one or two
supervisors with non-unity of command.
-Increase in degree of formalization: the flexibility of way to the completion of work is lower and
more newly added administrative procedure, work and document requirement for monitoring
employees such as individual weekly working report, monthly working report, annual working
report and fall year working plan.
B. Change in structure:
-There is a change in structural types, before the change, the Company mainly adopted the
functional structure which divides responsibilities according to the organization ’sprimary specialist
roles such as Corporate Management, Financial and Accounts, Legal, Human Resources,
Investment and Administration and so on. After the change, not only the composition of department
is changed but also partial of the structural style change as well. Some departments has been formed
as Matrix Structure, I.e. some members of Corporate Management department and Investment
Departments have been assigned to shift from their original department and formed two matrix team,
called Investment Projects Team I& Team II base on geographical areas that projects located. And
as the shareholdings change and more control by the controlling shareholder, more and more new
leaders were appointed in different departments and management. The composition of functional
department structure and management changed as well.
-There is change in control system which is required to abandon the existing system used and to
change, to adopt and to merge with the system that the controlling shareholder company using
including PC (ie.: Accounting) system, Documentation/ corporate update system, work flow system,
appraisal evaluation system, remuneration system.
- For the recruitment system, there is more and more nepotism adopted for new job positions even
if there is no needs or rooms for new head counts with absence of asound and formal recruitment
procedure. There is an ignorance of importance of Corporate Governance practice; and
-For remuneration system, a new performance-link remuneration policy is proposed to all back
office departments together with the new performance target of the Company.
C. Change in culture
-Besides, the Company is required to follow the culture system adopted by the controlling
shareholder company that deliver more and more PRC nepotism culture to the Company especially
the Senior Management; and bring into so-called anti-corruption culture that means budget and
benefit cut for each department.
In view point of strategic change, the type of change for the Company is revolution as there are
fundamental changes in both of the Company ’sstrategy and culture.
Driving force of the changes
The driving force of the organizational changes are mainly divided into two categories of external
forces and internal forces as follows:
For external forces, political environment change, it is likely attributable to the frequent and
determined anti-corruption activities in PRC since Mr. Xi Jinping has taken office as chairman of
committee party of PRC.
For internal forces, (1) firstly, is attributable to the firm ’sperformance. The under-performance of
the Group and failure of achieving Group ’sannual performance target index in 2014, in respect of
amount of fund-financing, average stock price for the year, projects acquired, profits and revenue
generated. (2) Secondly, the change of shareholdings control. (3) Thirdly, the change of leadership,
that deliver astrict and autocratic culture. It pushes HK office to follow the PRC working culture.
Feeling about the change process:
a. Before the change, the degree to jobs are offered with more discretion over what is to be done.
Lower formalization is required for work or job to be done and fewer constrains on the way
employees do their work. Also, more localization polices were adopted, i.e: the remuneration
review and adjustment were based on the local market ’slabour market situation and inflation.
b. During the time of change, multiple workload was being put on employees includes me. A party
of additional administrative work were added and document is required to submit in avery short
period of time together with higher manipulation and monitor by some leaders via submission
of time-consuming documents such as individual weekly report, monthly report, yearly report
and fall year prospect and plan.
c. After the change unfolded, some existing problems of the Company have been identified and
solutions are resolved and improvement is shown. The corporate culture and strategy become
more clear and consistent. However, after the change process, power has been acquired by
ambitious later; more constrains on employees with new rules; and some new problems come
To consider how the change might have been better managed
It is suggested that apart from the core corporate strategy, in case by case, the Company shall also
adopt some localization policies based on geographical markets. There are differences in many
aspects among different regions including but not limited to economic condition, labour market,
employment law, living standard and cost of living. It is not appropriate to adopt aunity policy and
identical ratio of growth objective (appraisal) for employees of all grading, functional departments
and different regional offices for whole group of the Company.
The key performance indicators of appraisal system and remuneration system shall be differentiate
for different grading and departments or job nature. For example, the remuneration package for
Investment projects team and for back office staff such as Accounts department must not be
identical. A reward incentive plus performance link package is appropriate for Investment projects
team as of the revenue centre of the Company so that encouraging staff to acquire projects for more
revenue while basic salary scheme is appropriate for back office staff. It is not rational to change
and to impose a new performance-link package (base on existing salary figures) on back office
departments for the reason of failure of achieving the Group ’sobjective as those are not revenue
generator of the Company.
And the change in remuneration system implies to asalary reduction for back office staff. It not
only fail to motivate employee but even demotivate the employee morale. On the other hand, if
basic salary scheme applies to Investment projects team, the obvious results would be low incentive
to acquire projects and bring no revenue to the Group.
Moreover, reasonable and sufficient time with clear and guidelines must be given to employees to
adopt the new practices, procedures and requirement. Transition process should be split into few
stages and should avoid one-off big change or change in rush.
It there is aneed to require employees to provide with quite alarge amount of information and
documentation held on hand for the transition or transformation of system, very clear purpose and
requirements in details must be given as well as sufficient time and buffer.
Attention shall be paid carefully and more buffer shall be provided if changes are necessary to be
made in some “peak season ”for specific departments such as January and February for Financial
and Accounts department for annual accounts closing and audit and March and April for company
secretarial department for preparing annual results announcement and annual report.
It is better to avoid significant changes in that mentioned peak season as itdouble the workload and
pressure of employees and the resistance to change may also be more. And the outcome of changes
may be ineffective, or even more time is required for completion.
Advice for others who might be faced with this kind of change in the future
As there might be some restraining forces of changes during or after the process of change and in
order to mitigate the restraining forces it is advised who might be faced with this kind of change in
the future as follows:
1. Restraining forces due to Lack of trust:
a. Lack of trust between the representative person or authority initiating the change and the
employees due to unclear purpose; and
b. Resistance reflect resentment that changes were proposed by leaders who are not viewed as
having legitimate authority to make them, or who are seen as using the changes to further
personal ambitions and desire for more power.
In fact, in some cases, it cannot be denied that those desire for more power would take
chances in the process of change to fulfill their personal ambitions that cause unnecessary
workload or procedures and ineffective result of change.
Suggestion: to frankly communicate with supervisor or department head the difficulties
countered and raise out the strong intention to corporate with the Company target and
strategy, to know more about the behind reason for the change to establish trust, and
formulate a better way to adopt the change. It is encouraged to ask for more time or
assistance if necessary.
2. If there is a case that the proposed change is inconsistent with personal value, naturally the
resistance to change become more. For example, the proposed change is for diminishing the
benefit and remuneration of general grading but only benefiting the Management; or the
adoption of nepotism that allows new joiner who is not qualifying the job position or with bad
Suggestion: if possible, to know more and ask more about the value and culture of the
Company before entering aCompany. It may be possible to quit the Company after taking
any necessary action as the change that you cannot control ore resist.
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