Reference no: EM133208626
Assignment:
Brief Introduction of the Change Event Henan Machinery and Electric Import and Export Corporation, LTD, which is a subsidiary of China National Machinery & Equipment Import & Export Corporation (CMEC), were founded in 1997. The company mainly does business of exporting parts of mechanical equipment with the USA companies. Henan Machinery and Electric Import and Export Corporation, LTD is a half-privatization half-nationalization company. It was a new business model when the company was founded, because almost all the import and export companies were state share-holding. The head of the company are General Manager, who is responsible for the Finance Department and the Deputy General Manager, and the Vice Secretary of the Party Committee, who is also the Chief of Office, in charge of the Party affairs, logistics and administration.
The Deputy General Manager is in charge of two Business Departments, in which salesmen are devoted to finding more clients, seeking more business opportunities,exploiting market, and retaining stable sources of customers. In the next ten years, the company had a group of stable clients to ensure further development, and gained considerable profits every year. Fame and good reputation came naturally. During the later development of the MEIEC Company, three notable issues emerged, which will be elaborated in the following paragraphs.
Change 1: Unfortunately, a world-wide financial crisis broke out ,causing the rise of the price of raw materials and the appreciation of RMB. More importantly, due to the fact that most of the clients are from the center of the financial crisis, the USA, the bankrupt of many American client companies finally heavily stroke on Henan Machinery and Electric Import and Export Corporation. The profit of the company decreased remarkably. In order to control this decrease, the General Manager reacted rapidly to the disadvantaged situation and made several crucial decisions.
Firstly, store up sufficient raw materials before the price raise further. Secondly try to maintain the product prices rather than raise the selling prices with the price of raw materials. Thirdly, settle up bills at the right time according to the exchange rate. Fourthly, avoid risk investment and stop doing business with those less powerful companies. And at last, adjust the encouragement system and reward system. In order to discuss the strategies in respond to the crisis, the company gathers all the managers, and the Vice Secretary together to form a powerful coalition.
The guiding coalition figured out the three main crises the company was faced with, and drew up corresponding strategies afterwards, including storing up raw materials before the price raise further; maintain the product prices. Afterwards, The guiding coalition of MEIEC gathered the whole company staff to inform others of the present conditions of the company.
The MEIEC Company trusts clients very much, and even accepts the clients? delaying payment, only to build a harmonious and trustworthy friendship. Since some of the clients were badly influenced in the financial crisis, the company decided to check carefully on previous business and became cautious in the payment of clients. Shortly after the actions listed above were taken, the staff was gathered again to sum up the achievement during this period of time.
Evidently, the plans worked out, and the company is now expecting a rise in profit. The profit of the company was fairly improved after the changes. Even though change process was challenging and some obstacles also occur. When the thought of changing the reward system was firstly brought about, it caused fierce dissatisfaction among the staff. But After trying out the new rewarding system, the performance of the company progressed pretty much, this new system was adopted officially. In the new rewarding system, the salary a salesman can get is directly associated with how much money he/she has made for the company, not as in the past, partly determined by the average level of the salary.