Questions on change management and international trade

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Part 1

Discuss the possible psychological effects of the introduction of a significant change management programme within an organisation on the employees of that organisation .in addition critically explore possible mitigation effects.

1.0 About Change Management:

Change Management over past few years is almost with all Leading and Successive Companies and is with every one as one among all situations of life (Doolin 2003, p-70).

The process of continuous renewing an organisation's Structure, Direction and Strengths' in order to fulfil the needs of its stake holders, Shareholders and Internal and External Customers, is the Change Management. Most 3 Fundamental assumptions which the change management visualises the dominant approach to change to incorporate within each personnel among organisations is, firstly the acceptance of change, without any question is for the survival of the Organisation they work for (French and Bell 1999). Secondly the change is always treated as threat to successive organisations (Peters and Waterman, 1992). Thirdly Change is Show cased as strength of Leadership (Bass 1999, Wood Ward and Hendry 2004).

2.0 Types of changes that come across within organisation:

The only key important for a leading successful change is by developing a change strategy that will fit the type and scope of the change that which you are working for. Depending on the goal to which extent the acceptance of change and employee involvement the organisational change is planned and carried out. Developmental, Transformational, Transitional are three types of Organisational changes distinguished by the Ackerman (1997).

2.0.1 Development Change:

Development change comes into the focus when an organisation makes a further one step ahead in improvement to their existing business. When a company's pledges to provide more quality to their customers, increase of their standards and process improvement, these things among organisation considered as the development change. The first order change, emergent, planned is the Development change. The improvement of the existing skills or performance, correction of current process is the why mainly development change is for. Many companies to be in the race of competitive market, they continually involve in the development change.

2.0.2 Transitional Change:

The transitional change is very much different from the development change, the newer procedures, newer policies, are replaced with the current policies and procedures of the company. The time period in which the old process and procedures are dismantled where the new procedures and policies are implemented is known as the transitional period. The result of the transitional change is unpredicted as the merger, corporate reorganisation, acquisitions, development of new products, involving new technologies, are the sample in the transitional change.

Transitional change is the second order change, which is planned, carried with regular interval, or radically. Transitional change is focussed as three stages of process by Lewin (1951) they are, unfreezing the existing organisational equilibrium, moving to the further new position and refreezing the new equilibrium.

2.0.3 Transformational Change:

The sudden drastically transform of the companies' process and the implementation of new technology is the practices in the transformational. This change is not the planned change and occurs generally after the transition period. This transformational change involves both the transitional and development change.

The development and transitional change some times may not fulfil the needs of the organisation, in situations like change of supply chain significantly, unpredicted markets change rates rise or fallen, unpredicted competition, overdraft of revenue, or any other major mishaps.

Two dimensional change views, the two dimensional change shows how the change is controlled and how radical the change is. The figure illustrates the audit commission report which was taken recently. The prerequisite before any change is initiated in the organisation is to ensure the management is whole is fulfil with the right strategies and measures for the successful flow of change management. Employees of the organisation does not take responsibility of the change, they only give the work to be effective, individual work effort and accuracy of speed of performance is only tackled with the employees, so management has to prepare the change to be more important.

2.0.4 Planned and unplanned change:

Organisational change might be planned and unplanned among the organisations. Sometimes the change in the organisation is unpredicted and needs the implementation and deliberate decision on change management has to be taken by managers, this type is the unplanned change.

3.0 Change might be unpredictable and spontaneous in two ways:

Firstly, sometimes decisions emerge from the managers, and these change plans are unspoken and involves employees assumptions out of scope about the organisation. To make the things more profitable and worth full the management raise these type of change management plans among the organisations without any   intimation about this prior with the employees or stakeholders.

Secondly, sometimes the change which is planned prior and presently executing with much care by the managers will run out of control and makes the management to involve for the unplanned change. For example, when HALLMARK Greeting Cards Company planned to be one of top business company in greeting cards, so it has planned almost for 3 years for drastic improvement in design of cards and introduced the silky and lively finish of cards with much impressive pictures and the change management plan was successive in much less than a month. Another example is the Nokia, one of top leading manufacturer of mobiles have investigated the error, faulty of their batteries in various models with 5 million mobile sets on 27th august 2007. It was investigated Matsushita Electrical Company, Japan based batteries manufacturer has supplied fault batteries (with BL-5C series) to Nokia. The fault with batteries were much overheating and as a pilot change management plan both Nokia and Matsushita jointly initiated the process to replace the batteries to customers with free of cost.

4.0 Measures for the Effective Organisational Change Management:

Change Management does not involve any single step process, or any only one individual involvement, change is complex and above it does not only have single solution. Proper and perfect training has to be provided to the employees involving in the change. Effective and Impressive Leadership has to be incorporated. Organisational development has to be implemented for the organisational effectiveness. Communication is more complex, the communication between the participants in change management must be clear and instructions to them must be understandable. Two way communications is much preferable. Finally, linking of change management of all modules together as one bundle rather treating them as individual module, within an organisation.

Above all, HR's role in change management is most important and remarkable, as only HR's is responsible in accessing the change impact on individual, department, branch of organisation, another part of organisation, communicating the views of stakeholders and performance measurement.

5.0 Critical Findings:

Employees should involve in all phases of change management, and make them informed in all steps of change as individual effort is the team success and change can resist strongly only when it gets roots from deeper. Change Management can be emergent or planned, change may be either but the prerequisites has to be carefully examined and to be started only when it is necessary. Need of change and the necessity of change of it has to be correctly educated to the participants in change management process, as best results appear only from clear understanding. Change process developed has to be perfectly suited for the problem, this can be achieved only by knowing current situation and future state of change by well expertise and managers. Leadership Practice is showcased only when the organisation is successful in it change process and the organisation should mould for every change management process initiated. Companies often implement change, as for renewing, restructuring, innovation, to be with market change and for the profit interest of customers, stake holders and share holders. Change management performed has to be planned for long term, as the change result is unpredictable the long run plan change can involve some corrective and supportive changes for a successive change. Organisational change is emergent element; it is not linear or not fixed. The change may vary the goals start up at the initiative. Strength of the success of the organisation is reported only when the change is performed and outcome is successful.

Part 11

Recognising the growth of china economy and political influence in the world but nothing also the potential for internal social unrest, discuss the implication that theses factor may have on strategy development of container shipping company engaged on route between china and Europe. In your discussion also consider the influence that Europe currency union may have on the stability of the economics of individual European countries.


China's economy is now growing stronger and faster than ever. After being in a stand still for two decades under the rigid authoritarianism of early communist rule, China now has the world's fastest growing economy. China is everywhere these days. The words Made in China are as universal as money. China has become the world's largest maker of consumer electronics, pumping out more TV's, DVD players, and cell phones than any other country. China is rising even higher still, moving quickly and expertly into biotech and computer manufacturing. No country has ever before made a better economic development all at the same time.

However, the purpose of this assignment is to identify and evaluate the growth of Chinese economy and the remedies involved strategic development of container shipping company in between China and the European Union as well as the influences on individual European nations.

Social & political influences of China

Many accuse the Chinese communist government of not promoting human rights among its people. Human rights abuses by the government remained numerous throughout recent years (U.S. Bureau). One area criticized by the international community, is China's legal system. The government is also criticized because of the lack of political freedom in China. Throughout the nation, police break up protests and arrest demonstrators daily (Melloan). The strict rules regarding speech have grabbed international attention. Ironically, during a visit by a U.N. human rights expert, officials arrested several critics of the government's attitude towards the freedom of its people under arrest (Buckley). The communist party portrays the message that it is above the law. This attitude has caught foreign attention. The U.S. Bureau of Democracy, Human Rights, and Labor condemns the political oppression of the communist party. The U.N. has ordered China to improve its judicial system by separating it from the political party (Buckley).


During recent years, the government has slowly transformed the formerly dominant communism to a free, privately held, economy. Capitalism has brought new wealth to the Chinese people, but still needs to progress more to end human rights abuses. Today, private business accounts for thirty to forty percent of China's gross domestic product (U.S. Bureau). In recent years, the communist party has allowed for greater internal debate among its selected members (Melloan). Most are too fearful of rebellion to change to a capitalist society (Tyson).  

 Laborers face the poverty created by fear of communism the greatest. Today, about one in three peasants is unemployed, the greatest in twenty years (Lin). Nicholas Becquelin, a U.N. director on human rights, describes the situation in China as "Economic growth is slowing unemployment is soaring" (Magnier). Since 1989, farmer's income has only risen slightly (Tyson). Many accuse the state-set prices on goods of being too low to support entire families (Tyson).


Child labor has flourished in recent years, especially in rural areas. There, wages are less and so many families cannot afford to send their children to school (Ni). A recent labor shortage in the southern, rural provinces has prompted many businesses of seeking alternate sources of workers (Ni). Estimates for the number of child-laborers are up to ten-million. Although Chinese law forbids employment of anyone less than sixteen years in age, it is rarely enforced (Lin).  

Because of the advancements in China's economy, the international community is focusing more attention on trade and its human rights practices. The economic progression is expected to develop China into a modernized nation by 2050 (Melloan).Debate has arisen over trade with China. Many believe trade sanctions cannot solve the serious abuses by China (Dorn). Trade with China is now about 95 billion dollars, an amount that benefits both parties (Bandow). Trade supports million of hard-working Chinese who depend on industrial employment. However, many also support the World Trade Organization's rule that prohibits trade with communist nations (Human Rights Watch). All stress that China should be dedicated to improving Human Rights within its borders.


For many years, the international community has attempted to assist the abused people through aid and diplomacy. Though the international community has achieved great progress in human rights, many still live in appalling conditions. Until the government of China is improved and poverty abolished, human rights abuses will continue.

Growth of Chinese economy

China is relentlessly positioning itself for even higher levels of industrialization. There are giant capital flows from industries to China in present days. China is the right place for business where the world is investing in. For example, China's phone system is more wire less than wired and many of its big cities will soon have the most advanced rapid transit system in the world. In the past, China's enormous population was hard to feed and employ. Now this enormous population are the greatest asset of global market ever.

China has a population of 1.5 billion. Quite surprisingly, China is not home to the cheapest workforce in the world. Even at 25 cents an hour, Chinese workers cost more than labours in the poorer countries of Southeast Asia or Africa. Lately, immigration of hundreds of millions of peasants from the countryside is happening now because the government allows them to leave. This migration is the largest in human history. The estimates of the number of people who have left to find work in the cities range from 90 to 300 million, numbers that even near the lower end match the entire workforce of the United States. Move up to the higher range and the number tops the U.S. and European workforces combined. What these numbers mean is that the productive power of China's vast low cost manufacturing machine, along with the growing appetites of its billion plus consumers has turned China's people into what is arguably the greatest natural resource on the planet. How the Chinese and the rest of the world use that resource will shape our economy and every other economy in the world, as powerfully as American industrialization and expansion have over the last hundred years.

China's effects on the world are so great that it's been hard for people to grasp the idea. Executives at the Harley-Davidson plant in Milwaukee said that a cold front was blowing in from China. The United States had lost 2.9 million manufacturing jobs over the previous 5 years. Wisconsin had lost 90 thousand, or one in six of its manufacturing jobs since 2000. They said that China is the top issue in their economic lives. China is the world's factory floor and it's the world's greatest market opportunity. China's industrial might saps opportunities from the developing world but its hungry economy pulls poorer countries upward.

However, Chinese government statisticians declared that their official measure of China's economy had been underestimating its. After the statistical revision, the government expanded its estimate of China's GDP or Gross Domestic Product by nearly 17% and tagged the economy's output at $1.98 trillion. The new numbers pushed China ahead of Italy as the world's fourth largest economy. The economy of the United States however, is still by far the world's largest with the year 2004 Gross Domestic Product of $11.75 trillion which is 6 time larger the size of China's GDP out of the world's GDP of around $37 trillion in 2004. In China's capitalist society right now, they are trying to overlook the bad side of modernization, seeing economic progress as the solution to all the country's challenges.

While many people may think that China's economy is going smoothly, that may not be true. Not all of China is as confident that just the desire for growth alone can ensure it. Recently, Chinese economists have been trying to discourage people from having too high of expectations and over enthusiasm as they know will lead to economic bubbles.

Strategic implications involving Container shipping companies

Influences on European Country's Currency

However, every time the worst is predicted for China's economy, it seems to grow faster, create stronger industries like container shipping, import and export more and attract more foreign investment money. Since China starting reforming its economy a generation ago, it has grown at an official rate of 9.5 %. The country is closing in on a 30 year run during which its economy has doubled nearly 3 times over. Neither Japan's nor South Korea's post war booms came anywhere close. Given United States' recent rates of economic growth, it would take the U.S. 25 years to double just once. If the U.S., which boomed in the 80s and 90s, had grown at China's rate since 1978, the U.S. economy would now be roughly its current size plus 2 Japanese economies added on. Americans and the Europeans tend to focus on the huge inequality in trade between the two countries. It's worrying Americans that they help to create what China's becoming by the continual buying from China's factories. According to Forbes and Fortune magazine, China's goods are much cheaper compared to the U.S. as much by 50% sometimes.

As cheap as their goods can be, Fortune magazine says that the reason that China are able to keep their prices so low is because they keep their currency, the Yuan, fixed at a set rate against the dollar and is undervalued by as much as 40%. Other companies say that they can never compete with that because China's manipulating the rates of exchange. Republican Tim Ryan quotes that "If China wants to be part of the global trade system, it has to play by the rules." As good as it is that China's products are supplied cheaply to some businesses, it is hurting a lot of others and putting them out of business. (The goods that China is able to supply, those companies that manufacture them are getting hurt and put out of business. But since China can't manufacture everything, the companies that manufacture those goods are benefiting from China due to cheaper costs.) An example of that is the American furniture industry. Its strength has been sapped almost entirely by China alone. It shows how China can come after the specialty businesses of any country and destroy them in short. For other countries, China has become essential as a customer as well as a supplier. Japan and Germany have recently greatly benefited from the large trade surpluses with China because they have been the world's largest buyer of factory machinery, and it needed the equipment Germany and Japan make in order to produce the machinery and electronics. Resource-rich countries do well selling China the raw materials that get reshaped in its factories, and the energy sources it needs to power them. In 2003 according to the calculations of Stephen Roach, chief economist at Morgan Stanley, the Chinese bought 7% of the world's oil, a quarter of all aluminum and steel, nearly a third of the world's iron ore and coal, and 40% of the world's cement. The most intimidating thing about China is not that it does so well at low-end manufacturing industries. America and other countries are more worried that manufacturing shifts overwhelmingly to China from all directions including the U.S. The far bigger shift that's just happening is that China might own the infinite number and variety of components that make up everything else that is produced. China is taking on those industries too. Such components consist of for example, the hundreds of parts in washing machines, computers, and airplanes as well as the big products themselves such as cars, trucks, and ships. Also people may start switching their networks for national phone systems, factories, satellites, and rockets.

One big reason China is growing is that the world keeps feeding it capital. According to Japan's research institute of economy, trade, and industry, one third of china's industrial production was put in place by the half a trillion dollar of foreign money that flowed into the country since 1978. In 2003, foreigners invested more in building businesses in China than they spent anywhere else in the world. In the past, the U.S used to always attract the most foreign money, but in 2003 China too, a strong lead pulling in $53 billion to the U.S.'s 40 billion. However, in 2004, the U.S. outscored China but grossing $107 billion to China's $61 billion (because an increasing of billions coming to the U.S. is being spent by Chinese companies buying American counterparts.) Every day China receives a river of Europeans, Asian, and American experts in manufacturing, banking, computing, advertising, and engineering. In 2003, the exports and imports by foreign companies operating in China rose by over 40%. No more than half of China's trade is controlled by foreign firms. Foreign companies have pumped up China's trade volume enough to make the country the 3rd largest trading country in the world behind the U.S. and Germany, and now ahead of Japan. Most of the world's countries now sees China's growth as a critical engine for their own economic growth. News everywhere tells the world's daily balancing act to keep China happy as a customer, efficient supplier, and as a competitor.