Organizational Behavior: A Case Study of PCCW Company
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Published: Mon, 5 Dec 2016
With the numerous changes brought about by the surroundings, machinery, financial system, political affairs, and the general public, changes in the organization must be taken note of in order to deal with the varying demands of the workforce and the clients. In this output-oriented society and generation, every organization must have the skills, capabilities, endurance, and the strategies to be able to meet the demands and the needs of their market. As such, the continuous changes that organizations must undergo may be considered as their only edge in order to cope with the overall changes observed in the society. Thus, appropriate change management must be done in a company to effectively and efficiently facilitate and govern the changes needed by organizations.
In the objective of PCCW for market extension, protect its position, and create strategic agreements with other Asian companies, it has borrowed greatly to finance the $38 billion bid for Hong Kong Telecom, which resulted to its debt of US$4 billion. Further decline of its performance is brought about by its lack of confidence in the debt repayment plans among stockholders (Darlington and Cooke, 2000), which contributed to its standing as the worst performing blue-chip company on the list of the Hong Kong Stock Exchange in 2002 and 2003 (“PCCW”, 2007). In addition to its debt and change in ownership and management are the increasing pressures of competition among the industry. It has been reported that in August 2000, there were 165 external telecommunications services operators and 187 Internet market service providers. The increase in competition led to another cause of the company’s problems, which is the existence of monopoly for domestic fixed telephony. This became a major blow for the company, as many telephone operators no longer need the gateways and local networks provided by PCCW (Darlington and Cooke, 2000).
Furthermore, another basis of its problems is the decrease of its staffs and labor force, which donate to the decline of its operations. An additional cause is the failure of the bid between the company and China, for at the time, China resisted to make consultation with a company that is allied to the Singapore government, which also became the basis of the problems of the Sing Tel’s bid in the past (Greenlees, 2006).
Additionally, the problem for the company is the generally failing revenues in Hong Kong, with its failure to make considerable advancement to the China mainland. With this, heavy investment in communications all through East Asia must be required before the full potential of PCCW can be appreciated (Darlington and Cooke, 2000).
External Change Driver
The PEST Analysis sets up an efficient exploration of the peripheral impacts on a precise company by infringement of the components into indispensable and perceptible elements or factors. The obvious essentials under this type of analysis include Political, Economic, Sociological, and Technological elements. Political factors include the limitations in the policies of the Chinese government with regards to company consultations and mergers; the government’s choice of companies outside the country, with which it would make discussions with; distinctive pre-eminence in China’s legal system; influence of British legal system in Hong Kong’s international financial transactions.
Economic elements comprise the progress and underdevelopment of infrastructures in East Asia; telecommunications monopoly; debt of PCCW; dollar inflation and deflation rates; financial crises; crumple of asset prices; rate of economic growth. Sociological factors include PCCW’s variance with customers that are major stockholders; unemployment; changes in communication, marketing and management; retaining separate superiority over human capital, language, rivalry and challenge. Effects of e-commerce to PCCW; improvement and enhancement of its website; operation and maximization of the Internet; faster negotiations, development of new ultra-modern tools, enhancement of R&D through the Internet
Internal Change Driver
One of the inner alteration drivers of PCCW is the change in its possession, along with the adjustment in its supervision and its executive culture. The culture was then distorted with the amendment in the personnel. Subsequent to the acquirement, most of the staffs working in C&W HKT are now employees in PCCW. This led to the change in the customs of the company, from a conventional, seniority-based, and non-market driven, it twisted to a powerfully spirited, performance-based, and customer-focused company. Another internal driver is the modification in the company’s main concern. The quality of service is now the company’s primary alarm, and the company has been investing millions of dollars in excellence and customer service training. The third internal driver is the change in internal processes (Hatch, 2006).
Such changes in internal processes include implementing diverse quality programs, including quality improvement teams and six sigma programs. These changes in the culture of the company brought about the company’s reorganization procedure, for instance changing the divisions from a cost-center to a profit-center, thus, making all employees aggravated to make negotiations and business dealings (“Cable and Wireless: Jobs Surveys, 2003).
In line with the company’s agenda for change, several aspects in the organization can be taken note of, namely, its strategy, structure, processes, and people. In relation to its strategy, PCCW provides solutions for port management, security and CCTV systems, audio and visual solutions, and technical support and maintenance services to various sectors in the industry, such as governments, public services, aviation, and broadcast engineering operations. In addition, it re-entered the mobile market, collaborated with real estate and broadband companies, and improved its telephone directories. In terms of structure, the contribution of its large team of professionals, experiences and knowledge in the IT industry provide excellent ICT solutions that would help customers develop innovative and challenging business opportunities.
In terms of processes, the company facilitates outstanding innovation, especially in terms of IP-based business services, New Generation Fixed Line services, broadband pay-TV, Internet access, media content, large-scale IT solutions, mobility, and wireless innovations. In terms of people, it has approximately 17,000 employees, located in different parts of the globe, including mainland China, South America, Japan, Korea, Thailand, Malaysia, Singapore, Taiwan, Europe, the United States, India, and the Middle East (“Company Profile”, 2008).
Assessment on the Style of Leadership/Management
As mentioned earlier, the management of PCCW was transformed from a conservative, seniority-based, and non-market driven, to a strongly competitive, performance-based, and customer-focused company. From this transformation alone, it can be stated that the style of leadership in PCCW is a Proactive style of leadership. This is because a proactive leader focuses on achieving performance outcomes of his or her team and shares a vision, which compels the team to move towards that vision or goal (Holmes, 2008). However, the presence of conflicts and resistance on the part of the employees may indicate that the type of leadership or management they experience from the company might not be sufficient to fulfill or satisfy their needs.
If PCCW Limited did not take any action regarding their problems, a domino effect of negative events would happen. Its debts would further increase, which would afford the company to sell their assets and resources in order to make up for the debts it have in other companies. Resignation of managers would also be another effect of a no change strategy. The increase in debts would lead to further loss of company assets, and later on, to further loss of human resources. Due to the lack of adequate resources and assets, there would the delay, inefficiency, and ineffectiveness of processes and operations in the company that would lead to the decline with the number of its customers, as becoming less satisfied. The loss of customers leads to the loss of profit, thus, resulting to bankruptcy and immediate closing of the company.
Proposed Change Strategy
It has been identified that one of the problems of the company is the lack of infrastructure development in East Asia, which hinders the development of the company. With this, the company must not wait for the development of the region, but must try to find alternative solutions and materials that would suit its processes and the trend of infrastructure in Hong Kong. If the company is bold enough, it can initiate in setting the trend in the city in terms of infrastructure development, given the right resources and the right skills and expertise. In order to do so, the company can invest in its Research & Development in its quest to find new supplies and materials. Another proposed change is the implementation of performance management strategies that would help develop and improve the overall performance of the organization. Since the management of PCCW has already been transformed into a performance-based management, performance management of the employees must be done in order to help guide them with their tasks and responsibilities in the organization. This is because performance management serves to focus the efforts and attention of employees in critical tasks using performance feedback (Bernardin and Russell, 1993).
This would then allow the employees to gain more knowledge and develop new skills in relation to their work in the company. Another change strategy is the implementation and use of Information Technology or Information Systems, which would facilitate in the organization and information retrieval in the company and in effective communication. Through the use of an IT or IS, the company would be able to organize its customer database that would allow it to have an effective and efficient product inventory, customer follow-ups, and evaluate customer feedbacks for product improvement. Lastly, the organization can improve its operations strategies through the improvement of its supply chain. In the management of its supply chain, both the suppliers and the corporation would be able to have a successful and well-organized affiliation, thus, preventing the impediment of provisions and resources considered necessary by the organization (Robbins, 2004).
First and foremost, the realization of the change program would certainly elevate confrontation among the employees and managers of the organization. The sources and the apparent impacts of this resistance were already mentioned in the earlier discussions. Resistance to change of the employees leads to inflexibility and lack of support, ensuing to the delay of the change process and in internal processes and operations. Second issue to take note of is the differences in the preferences of the management and leadership styles of managers in the organization, consequential to varied inter-departmental cultures and practices. Due to such differences, employees would be having a rigid time dealing with other employees, which can be a promising source of conflicts. Third issue is the possibility of needing to lay off employees or reassigning them to new job positions that may require new skills, technologies, and knowledge. This may also lead to grave threats and conflicts in the organization. Fourth issue is the need for reformation in the departments that may or may not be contributory to the welfare of employees. Fifth issue is the adequacy of resources, which would be essential in sustaining the needs of the company. Finally, the execution of new policies would be a concern for PCCW (Simon, 2007).
From the argument, it can be apparent that in order for a company to experience and execute a change program, it must be proficient in taking note of different interior and exterior issues that would present an assortment of impacts to the employees and the performance of the organization itself. As such, an efficient organizational change process would consist of important elements including its external environment, internal processes and operations, the welfare of employees, the support of top management, and the satisfaction and demands of customers. Putting each constituent in synchronization and concord would perhaps guarantee a successful adjustment procedure.
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