Leading and managing change.doc

Introduction:In recent years, with the steady economic growth and technological development, there is unprecedented rapid progress in telecommunication industry in China. In order to encourage the national telecom operators to become more powerful in the international market, Chinese telecommunication industry experiences an enormous restructuring according to the central governments telecom industry reform scheme. China Telecommunications Corporation (China Telecom) is one of the most powerful telecom operators in China. After this change, China Telecom gains some basic telecommunication service from China Satcom and CDMA2000 business from China Unicom through acquisition. China Telecommunication Corporation is an extra large state owned enterprise established in 2002. China Telecom possesses around 60% telecommunication network in China, which means it owns the world largest fixed line network that covers the cities and towns as well as the rural areas. After restructuring, China Telecom is still managed by central government. Its main business currently includes: operating various kinds of domestic and international fixed line telecom networks; providing telecom network based voice, date, image, multimedia and information services; carrying out account settlements for international telecom services and so forth. (Ming, G 2009)This essay will illustrate the causes of China Telecoms organisational change via the analysis of its external and internal organisational environment. Additionally, the paper will also present the importance of organisational culture through the description of China Telecoms cultural change.Causes of change:Organizational change is activated by triggers and drivers. As De Cauwe and Vernaak nicely express, triggers and drivers contribute to the emergence of a change idea. (Hughes, 2006, 41) There are various triggers and drivers in practice, and they can be defined in many different ways. For example, Tichy supposes change triggers should include environmental changes, technological changes and changes in people, but some scholars believe triggers can be better understood via a more detailed list of triggers including government legislation, advances in process or product technology, changing consumer requirements, expectations or taste, and competitor or supply chain activities. (Hughes 2006 39) In this debate, most scholars wish to identify a certain list to explain triggers or drives. However, the reality is that there is no common list for every organizational change, because each organization has its own past internal and external organizational environment, present internal and external organizational environment, future internal and external organizational environment, current and past performance. Additionally, in the real world, due to different forces, organisation exists in a constant transition between stability and continuous change. Like Mark says, tension between stability and change is an inevitable part of organisational life. (Hughes, 2006, 40) PEST analysis:The causes of change for China Telecom can be identified via PEST analysis.Political factors: First, there is a nationwide reform in state owned enterprises. Due to the current economic, international, technologic, social and other circumstances, Chinese government has initiated a program of deep reform in the large state - owned enterprises via optimizing property, upgrading management system and certain mechanisms, so as to improve the competitiveness of the state owned enterprises; maintain and increase the value of national assets. On the one hand, in recent years, rapid economic development, fast growth of national wealth, the revaluation of RMB and the appreciation of labor force drive China to evolve into a more powerful country. (Pengyun, F and Qun, M 2008) On the other hand, China has to face the competition with other developed countries in the emerging high technic industries, information technology and other areas. In this sense, a deep reform in telecom industry is urgent. In order to improve the comprehensive strength, accomplish a thorough upgrade and innovative management. It is a good choice for China Telecom to absorb CDMA 2000 service.Second, Chinese government tries to accomplish a better integration of industrialisation and informationalisation. (Yu, K 2009)During industrialisation, information technology has come to pervade every aspect of peoples live and each department in national economy. Chinese government is trying to accelerate the industrialisation process via informationalisation, and push the informationalisation process through industrialisation. Since Chinas reform and opening up, information industry has gained an enormous development. To some extent, industrialisation and informationalisation is the supplement to each other. At present, industrialisation and informationalisation need to cooperate at a deeper level. The integration of industrialisation and informationalisation ought to be upgraded and expanded. On the one hand, the combination of industrialisation and informationalisation, a new road to industrialisation, can transform and upgrade the original industrialisation. On the other hand, it also provides material, technological base and extensive market for informationalisation. There are a lot of areas require to be improved urgently such as the developing ability of information technology service, the capacity of independent innovation and so forth. Informationalisation and the emerging industrialisation will be impeded if the above problems can not be better solved. Telecommunication is the indispensable bridge and ligament in the integration of industrialisation and informationalisation. With the further combination of informationalisation and industrialisation, telecom operator has to evolve into a modernized and integrated information business provider.Economic factors: there is a growing tendency for the global telecom charge towards a steady decrease. (Yu, K 2009) Due to the rapid development of technology and intensive competition in the global telecom market, telecom charge is decreasing step by step. Chinese telecom operators also have to face this growing trend, although telecommunication industry in China is monopolized by the state owned enterprises. The reality in China is that the reduction in telecom charge is inevitable, but it is a long - term process. This can be illustrated through the following two aspects: First, fixed line business has been operated for many years in China, and an extra large scale telecom network has been built. Consequently, IP business is still very competitive with mobile business, although land - line service is facing the increasing pressure. Second, the adjustment of telecom charge is becoming transparent according to the State Planning Commissions demand. The State Planning Commission has officially put telecom charge on the check list which means each modification in telecom price must be monitored by the central government. (Yu, K 2009) Consequently, the decrease of telecom fees is slowed down by this political interference. Although telecom charge decreasing is a long - term process, the increasing shrinkage of profit margin in Chinese telecommunication industry forces China Telecom has to explore its business to sustain. The acceptance of CDMA 2000 business from China Unicom can be a good opportunity.Social factors: First, there is an increasing growth of new forms of social need. Many years before, communicating tools used to be very luxury goods for Chinese people. Nowadays, mobiles or telephones are very common products, as the rapid rise of peoples living standard. For most consumers, telecommunication is not just for communicating, but also for enjoyment. The high quality of service, therefore, is essential for each telecom operator. Service in telecommunication industry mainly includes the following two categories. One is soft service which means telecom operators attitude towards subscribers. Another one is hard service which means service providers should guarantee users smooth communications between different telecom operators and different networks. (Kai, Y 2008) The hard service is a frequent problem in telecommunication industry. As a consequence, improving the quality of service is a long term challenge for each telecom operator. In order to meet consumers desire for better service, China Telecom is trying to find a better link between different networks via CDMA business.Second, there is a tendency towards the integration of fixed line network and mobile network. (Yu, K 2009) After restructuring, there will be an intense competition between different telecom operators than ever before. The competition will launch at all telecommunication business. The competition towards all business is not just land - line service versus land - line service or mobile service versus mobile service respectively, but between the combination of land - line and mobile service, namely FMC (Fixed Mobile Convergence). Generally speaking, in FMC, subscribers can enjoy seamless roaming and the same service between different terminals through no matter fixed network or mobile network. (Kai, Y 2008) As the future direction for telecommunication industry, FMC is actively developed by the leading telecom companies, although FMC has not been widely adopted because of its technical and standardized problem. The world famous market research agency, Infonetics, indicates that the market of FMC infrastructure and facilities increases 5 times in 2006, and this market will still significantly expand from 2007 to 2011. (Kai, Y 2008) Additionally, it is reported that the market of FMC facilities will reach around one hundred billion and the number of FMC subscribers will attain more than 60 million at 2011. It is said that the boundary between mobile network and fixed line network will gradually disappear in the following 15 years. In this regard, accomplish the voice business, data traffic, multimedia service and other service in both fixed line network and mobile network is a long - term process. The purchase of CDMA2000 from China Unicom is just the first step into FMC world for China Telecom.Technologic factors: First, CDMA has more advantages than GSM. CDMA is an emerging product which originates from spread spectrum communication technology. It stands for Code Division Multiple Access. At the very beginning, CDMA is a network technology applied to the US military in the Second World War. The mobile communication system of CDMA is a secret signaling system. Due to its 4.4 trillion possible ADDR arrangement, communication can be hardly wiretapped. (Kai, Y 2008) In recent years, CDMA is widely used in global business, and it has become the major mobile communication technology for the US, Japan and South Korea. CDMA is becoming the major direction of the future mobile telecommunication, because of its technic benefits. Although GSM and CDMA are the same level products in 2G phase, CDMA still acquires a better reputation for the good quality of connection, low cutting off rate and radiation. In terms of 2.5G phase, CDMA can provide better transmission speed and various applications than GPRS. In addition, for CDMA, the transition from 2.5G to 3G is relatively smooth. In China, CDMA network is built and ran by China Unicom. In this regard, purchase some CDMA business from China Unicom is the only choice to catch up with future market step.Second, after the third phase telecommunication restructuring, Chinese government delivers 3G business license to the three largest telecom operators China Mobile, China Telecom and China Unicom. 3G will be the main land for their competition. According to Chinese governments telecommunication reform scheme, China Mobile and China Unicom will choose one 3G technological standard from TD SCDMA, CDMA2000, WCDMA and WIMAX respectively. (Su, S 2009) Whatever they choose, China Telecoms future potential market will be severely threatened. Accordingly, the only choice for China Telecom is to grab the current 2G market as well as endeavour to develop CDMA2000 business. Under the pressure from China Mobile and China Unicom, China Telecom cannot hesitate for a moment about 3G business. It is urgent for China Telecom to develop proprietary intellectual property rights in 3G technology, because, from 2G to 3G, it is not only a time consuming process but also a costs consuming process.From the theories in causes and contexts of change, organizational change is not only driven by external organizational environment, but also triggered by internal organizational environment such as human resources, administrative structure, product and service, technology; history and culture and so forth. Accordingly, China Telecoms organizational change is forced by its internal factors either. This can be explained via the following aspects.First, the business operating and management system in China Telecom is relatively not suitable for the current telecommunication industry. With the gradual shrinkage of profit margin and growing competition in telecommunication industry, China Telecom has to transform from extensive operating mode into detailed operating mode. (Su, S 2009) In addition, the conflict between management system and its strategic planning is an urgent problem for China Telecom. On the one hand, due to the substantial amount of daily work at hand, the leading managers spend too much time on the current business, but insufficient energy on making long - term developing strategy. On the other hand, in terms of business running, China Telecom lacks the certain people to cope with the complex and changeable circumstances. China Unicom is a company with modern management system. The acquisition of CDMA2000 can help China Telecom to upgrade its management and operating system, and absorb certain professional people. Second, China Telecom should get rid of its traditional recruiting system. For example, promote people according to the age is not good for the current development. Since China has participated in WTO, Chinese telecommunication enterprises have to be geared towards the international market. With the increasing competition in the international and national telecommunication industry, human resource is becoming the core competitiveness for each telecom operator. In order to maintain the sustainable development, China Telecom has to implement innovation in human resource management; construct a People - orientated organizational culture, and actively cultivate people with different expertise. (Su, S 2009) The acceptance of CDMA2000 service and a new management system from China Unicom will trigger China Telecom to build a new platform for recruitment and business running. Third, China Telecoms network construction and current business cannot excellently match each other. For instance, the present infrastructure is not able to provide specialized service for subscribers. Although China Telecom has a broad network coverage, it is just built for the common social needs. Consequently, China Telecom should continuously tap into the traditional voice business, and constantly exploit the emerging value - added service. Network ought to be constructed towards the combination of vertical and horizontal development. (Su, S 2009) The acquisition is a good opportunity to improve China Telecoms comprehensive development. Fourth, China Telecom has been downgraded into a regional company via the last two phases telecommunication restructuring implemented by the central government. At present, the southern telecom market is occupied by China Telecom, while the northern telecom market is monopolized by China Netcom. (Ming, G 2009) Without an integrated nationwide network, China Telecom can hardly operate nationwide business. In this regard, the acquisition of service from China Unicom can help China Telecom to start its national business via CDMA2000s northern market share.Organizational culture and managing changeOrganisational culture is generally defined as the shared ideas, customs, assumptions, expectations, traditions, values and understandings that determine the way employee will behave. (Osborne. P and Brown. K, 2005, P75) Organisational culture exists in each organization and it is the essential element for organisations daily running. Organizational culture interacts with other components in organizations, so it is vitally important to take account of the cultural impact when implementing organizational change initiatives. In spite of the importance of organisational culture, people still always neglect the effect of culture in organisations. It cannot only improve organizational performance, but also promote organizational effectiveness such as achieving better productivity, economic efficiency and so forth. In practice, organisational culture can be interpreted in different ways. Whatever the definition is from Schein, Kenedy or other scholars, in all these conceptualizations, the premise underpinning these works is that high performing organizations possess a corporate culture that is critical in accomplishing any success. (Osborne. S and Brown. K, 2005, P78) There are mainly three perspectives to understand cultural change, namely integration perspective, differentiation perspective and fragmentation perspective. The following content will illustrate cultural challenges for China Telecom through these three perspectives.First, the integration perspective acknowledges that the culture of an organization should be coherent and shared by the majority of employees within that particular organization. (Osborne. S and Brown. K, 2005, P80) During the acquisition of CDMA2000 service from China Unicom, insufficient communicating