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Xinhua Bearing Co., LtdPrepared for:Dr. Marguerite SchneiderPrepared by:Jie ZhangHRM 601Although the facts in this case are based on observations from my fathers company, they in no way describe any true history of a particular company or person. The names, facts and stories are fictitious and I do not take responsibility for any resemblance between the stories and real facts. Background: Economic reforms introducing market principles began in 1978 and were carried out in two stages. The first stage, in the late 1970s and early 1980s, involved the decollectivization of agriculture, the opening up of the country to foreign investment, and permission for to start-up businesses. However, most industry remained state-owned. The second stage of reform, in the late 1980s and 1990s, involved the and of much state-owned industry and the lifting of price controls, protectionist policies, and regulations, although in sectors such as banking and petroleum remained.In 1985, one great person named Xian found a new factory called Xin Hua, located in Shaoxin China. All the staff, including the head manager, were only six person just like a family. The head managers name was Xian. Other employees are all his relatives, including his wife, bothers and sisters. The head manager was really smart and hard-working, but His greatest strengths are his determination, resilience and manhood. At the beginning of the small company, Xian could not get enough orders to Support the development of enterprises, he have to accept all types of orders, even if this order had no profit. Sometimes, Xian want to give up, because he did not want his relatives had a hard life. He could find a safe, secure job with excellent benefits at government. But this kind job is very boring, which Xian dont like. Finally, his relatives said:” you can do whatever you like, we will support you forever.” After one year, because of the policy, the government supports private enterprise. Xian got a great idea that work with technical school. Xian found a technical school headmaster Mr. Xu to talk about his ideas. The technical school should support him money and place, he should support jobs and shares back to school. The two smart people get a deal. Because of this cooperation, the good days began, Xin Hua seized this opportunity and expand the scale of enterprises. Company recruit all kinds of talent from the technical school even if they had not enough experiences. Just two years, Xin Hua already employs 200 people and had a big factory. Xian, who just have high school degree, did not know how to manage 200 employee. But he knew everybody should responsible for their mistakes, including himself and his relatives. In order to make sure everyone knew this rules, he failed one of six founding members his sister, who had make a big mistake result in company loss more than one hundred thousand RMB (this is a very bid number in that time). Following the enlargement of company scope, the business is more and more complicated, and the number of employees is encreasing fast too. Xian became more and more busy, So he felt too tired to manage this big company alone. Finally, he ask the other four founding members to help him manage company and told them to report to him monthly. His bother named Yang was responsible for the sales and marketing department; his small bother named Zhou managed accounting; Yangs wife named Ye managed production and his friend Zhang manage employment department. Both of them just had completed the mid-school with terrible grades. I did not believe they could manage a big company good. Unbelievable, they finish their jobs very good. A few months later, on the Spring Festival period, everyone was glad in the annual meeting after the accountant declared the annual profit for the company. Xian felt very happy and he also thought about its time to leave technical school, to start his own business. At next year, Xian really do it. He made a new company named Xinhua Bearing Co., Ltd.The company kept growing fast, It enrolled more and more people to work and bought land, which was planned to be used for building new infrastructure. Of course, Xian got more and more money, which let him felt very successful. Then he had changed, became more self-conceited and dictatorship. He did not like to manage this company anymore. He enjoyed doing something more challenging, such as stock, futures and gamble. He asked his bother Yang to manage his company alone and report him every three month. A few month later, Xian just saw financial reports from Yang, and travel around the world. Xian believed his own choice, which Yang could manage the company well, even though many people had raised objections. The other founding members felt unfair.Unfortunately Yang just good at marketing, but he really like manage people. In his opinion, the marketing department is the most important sector in the company. So he vigorously develop the companys marketing department. Following the market sector expanded, Yang accept more and more orders lead the workers to work overtime every day. Though some orders was not good, so Yang also deduction from wages and bonuses in order to make a nice financial reports. A lot of workers felt too much pressure and unhappy to complaint to their superiors, The middle managers thought the lower-tier staff need more time to enjoy themselves and more salary. The middle level leaders report it to Yang. However Yang never cared about it, he just let workers finish more and more works, but had not paid enough money for their jobs. Yang just want to get more and more money, in order to keep shareholders happy. He was very worried that Xian knew what his doing. So he bribed the other founding members. The middle level leaders had to send email to Xian about the information of company. But Xian had not trust what the email said. As the middle level leaders knew it, they felt disappointed and worthless. In consequence, Some of them went to the competitors firms. As the mid-level leaders gone, the bottom tier employees could not understand why nobody care their feelings, they lost their efficiency with such a managerial mess, the defective rate became more and more high. A few month later, a big problem happened. A customer accuse enterprise, claim for compensation because of quality problems. Yang had to report it to Xian. Xian got the detail about this, he knew his company had a big problem. Firstly, he censorship incorporation accounts. He found company keep losing money at a long time. A lot of orders had problem, the procurement of raw materials prices far higher than the market price and prices of bearing ruled low. Due to the long-term loss and damages, company were facing bankruptcy. Xian was very angry about why Yang and the other founding members never report it to him. For his own company, Xian had to sold his own stocks, cars and villa, in order to pay off all the debts. Then he asked his good friend Mr. Yu for help, who graduated from Peking University. Mr. Yu said he could help Xian but most failed his bother Yang first, and then hired him as a director of personnel. So Xian had to failed Ya
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