Understanding and Leading Changes in Business: Haier Group

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Running Head: Leading and Understanding Changes in Business
Understanding and Leading Change
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Leading and Understanding Changes in Business 1
Contents
Introduction......................................................................................................................................2
Audit of Company’s Business Environment...................................................................................2
PESTEL.......................................................................................................................................2
Porter 5 Force Analysis...............................................................................................................4
Opportunities and Threats Analysis.............................................................................................4
Impact and effects of change the organisation’s strategy and operations.......................................4
TOWS..........................................................................................................................................5
Impact of Change on leadership, team behaviour and individuals..................................................6
Force Field Analysis....................................................................................................................7
Measures taken to reduce negative impacts of change on business behaviour...............................8
Stakeholder Analysis...................................................................................................................9
Kotter 8 Steps Model.................................................................................................................10
Lewin’s Model...........................................................................................................................10
Forces for change and their influence on leadership decision-making in the Haier Organization 11
Advantages and disadvantages of different leadership approaches...............................................12
Conclusion.....................................................................................................................................13
References......................................................................................................................................14
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Leading and Understanding Changes in Business 2
Introduction
The scope of this report is to explain the reader with the evidence about the leadership and
change management strategies in the Hong Kong based organization Haier. The company is a
part of Haier Group Corporations and is a multinational consumer electronic and home appliance
goods industry present in the environment of China. The organization designs, manufacture,
develop and sell the products in the worldwide market (Haier.net 2020). The company works to
become first choice of people in the worldwide environment and become the best solution
provider as well. The below mentioned report highlight the information about the change
management strategies of the business. The internal and external drivers of change for the
organization are defined in the paper along with the evaluation of change management in the
organization. Change in a constant part of business that helps them to remain competitive in the
environment. More detailed analysis about the organization Haier and its change management is
mentioned below:
Audit of Company’s Business Environment
PESTEL
Political: the political environment of the nation is strong as it is a part of the most powerful
nation that is China. The political environment of Hong Kong is supported by the functioning of
the Chinese political system. The nation has created strong bond with the sovereign nations and
highly support the trading activities. It can be said that the political environment of the country is
strong that provide benefits to the companies to sustain their business functions and grow with
facing hurdles. The state enjoy stable political environment and there is presence of freedom
among people to perform the decisions as well (Ambler, et. al., 2016).
Economic: the economic environment of the nation elaborates that people have stability in their
living standards and purchasing power among them is optimum which makes them purchase
products in the business environment. The GDP of the country is supported by world class
infrastructure and the governmental support to initiate suitable activities for the people in the
environment. There is presence of free market economy in the nation and low tax rate due to
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Leading and Understanding Changes in Business 3
which export and import activities are high progressive in the nation. The economic value of the
nation is strong due to which they are capable of dealing with several environment problems like
Coronavirus. The country in which Hong Kong lies used the resources to build a special hospital
for infected patient within 7 days. This shows the strength of the nation to deal with critical
issues. The Hong Kong Dollar is also legally issued by several famous international commercial
banks. The GDP growth rate of the country in year 2017 was 3.8% (Trading Economics 2020).
Social: the social factors of the country states that major portion of the population are Chinese
people residing in the nation. There is high population in the nation that increases the level of
consumer spending. People prefer living with their long and extended families rather than living
alone. Status symbol of the people is also a major factor for them that increase their purchasing
power. The country has several poverty reduction programs that help in making the economy
better. The company performs actions in the business environment while considering the needs
and demands of local Chinese people at large. There is presence of high degree of cultural and
regional and religious activities in the environment of Hong Kong (Lee, So, and Yok-Shiu 2017).
Technological: the people and companies present in the nation extensively make use of
technology aspects to grow. Technological competence is a part of social factors of the nation
because high population of the country make use of it on a regular basis. The technology
industry helps the people in the country to develop start-ups, introduce innovative ideas, and
capture them as well. China is the hub where high trading market is present. Therefore, this
country also gets the advantage to invest more on technological infrastructure and provide
benefits to people in the environment. The innovative and technology industry of Hong Kong
keeps on upgrading on a regular basis so as to provide excellent connectivity to the people
worldwide. Through this connection, the companies get to present themselves in the worldwide
environment. Technology is an attractive feature in the nation (Singh, Sethuraman, and Lam
2017).
Environmental: talking about the ecology of the nation, it should be noted that the climate in the
nation is seasonal due to alternating of the wind direction between the winter and summer. The
geology of the country is stable that improves the living of the people in the Hong Kong
environment. The environment is pleasant in the country however; the major problem in the
nation is marine life as it is getting degraded on a regular basis that is affecting the life of the
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Leading and Understanding Changes in Business 4
people living in Hong Kong (Lai, and Cheng 2016). The biggest environmental problem that
Hong Kong people are currently facing is Coronavirus. The government of the nation is taking
measures to quarantine the cruise coming from China, thus, protecting the damage to some
extent.
Legal: the foundation of the Hong Kong legal environment was created strong due to which it is
still continuing effectively. It should be noted that strong foundation in the trading activities
increases the effectively of trade events of the company. The free trade market is highly
competitive and court system ensures that the disputes are effectively handled and all the parties
are satisfied with the decree of courts. The civil penal court, tribunal court etc. provides justified
decisions to the people in the business environment.
Porter 5 Force Analysis
Below mentioned is the industry analysis for the organization Haier. The company prevails in the
consumer goods and electronics industry working worldwide.
Basis Power Analysis
Industry Rivalry High Many big firms with high
impact working in industry
Buyers power High Low switching cost and
high quality of information
Suppliers power Moderate Large number of suppliers
present in industry
Substitution Low Less or nil substitution
available
New entrants Low Large capital requirement
Opportunities and Threats Analysis
Opportunities: export rose by almost 10.7% in the electronic industry in HK in 2018 which
signifies that the market is growing and providing better scope of profitability to other companies
like Haier. The nation is world’s largest exporter in given industry. The external and internal
environmental analysis helped in understanding that the biggest opportunity held with the
organization Haier is the brand reputation of the company and high purchasing power of people
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Leading and Understanding Changes in Business 5
(HKDC Research 2019). The income capacity of people motivates them to purchase the
electronic and other appliances in the environment and initiate sales for the organization. Based
on the PESTEL analysis, it should be noted that stable government and strong economy makes a
good combination for a large scale organization like Haier to invest in the nation and grow
effectively. Customers prefer buying new and innovative products as soon as they are introduced
in the market.
Threat: the threat of the organization is depleting environmental conditions and high degree of
competition prevailing in the industry. The company has a differentiated brand image in the
market but still there is high competition that takes the revenue of the company away (WU
2018). Changing environmental impact due to use of such goods is the biggest threat for the
organization based on PESTEL analysis.
Impact and effects of change the organisation’s strategy and operations
Considering the changes explained in above segment of the report, it should be noted that the
company need to change the business strategies in such a way that it improves the quality of
goods produced. Further, the company also needs to make use BCG matrix for the business so as
to evaluate the star, question, cash cow and dog product. Segregation of products on the basis of
this analysis will help the organization to improve other products as well. The environmental
changes are acting in both favour and against the organization as it is providing them opportunity
and increasing competition at the same time.
Changing strategies can have a number of positive impact on the company success and its
business life cycle as it helps the business to perform more effectively while reclaiming its
former growth rates (Helfat and Martin, 2015). The two key change management undertake by
the Haier includes technological development and logistics improvement that help upon its
corporate strategy and operations. Considering technological development, Haier entered the
business through a collaboration with the Strauss Group, an Israeli technological enterprise,
which provided the technology while Haier concentrated on marketing, distribution and service.
This not just benefit Haier to have intensive collaboration with the customers, however, with
innovators around the globe as well the rivals and directly strengthening the company strategy
and operations.
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Leading and Understanding Changes in Business 6
Furthermore, as the digital revolution gained traction, the CEO of the company i.e. Mr. Zhange
realised that if Haier was to lead in the industry, there is need to break free from traditional
organisation structures and adopt open innovation central to company business strategy (Ye,
2015). With introduction of market mechanism into its R&D processes, Haier also able to create
a flow of disruptive new technology with integration to organisation operations so as to
transform them into commercial products. In addition, the company research and development
centre is also highly integrated to Haier different divisions and operational area and for the Haier,
the fundamental notion of company open innovation is that “the world is our R&D centre”,
simplifying, refers to the zero-distance sustainable innovation in relation with global users and
innovation resources (haier.net, 2019).
In relation with the logistics improvement, it results in operations improvement for Haier with
management of logistics area considering zero-defect focus, resulting in short delivery times and
less working capital. Haier also established Haier Logistics as their own TPL provider company
that later on become an individual TPL company supporting logistics services to other
enterprises as well (haier, 2013).
TOWS
Strength:
Brand image
High purchasing
power of buyer in HK
Stable economy
Good market share
(8.50 billion in HK)
Weaknesses:
Weak distribution
network
Seasonal sales
Opportunities:
Market size to capture
Growth in small
appliance market
High disposable
income
Strength Opportunity
Strategy: (Maxi-Maxi)
As the company holds
supreme brand image
so implementation of
diversification
strategy would help
the business to grow
(Bogers, Hadar, and
Bilberg 2016)
Weakness Opportunity
Strategy: (Maxi-Min)
Development of
international presence
would provide regular
sales to business
Focusing of premium
and lower level
segment differently
would enhance
organization’s
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Leading and Understanding Changes in Business 7
Development of
branded products for
premium people
would help in
achieving growth in
appliance market
position
Threats:
Competition
Environmental impact
Only selective
products are saleable
as only few products
are seem to be
desirable by
customers
Strength Threat Strategy:
(Maxi-Maxi)
Development of
extensive products
Weakness Threat Strategy:
Should increase
online brand presence
Impact of Change on leadership, team behaviour and individuals
Individual: It should be noted that with the change in leadership feature, the team
behaviour and individual behaviour changes subsequently. It should be noted that the
change management facilities demanded the organization to be stricter yet flexible at the
same time then only they would be able to control the quality standards of their products.
Resulting in which, it can be said that the team and individual behaviour appeared to the
organization a negative manner. Resistance to change can be said as the clear outcome of
the change management activities implemented in the organization (Bujor, Rusu, and
Avasilcai 2016).
Team Behaviour: Looking at change management from the perspective of team and
employees, it should be noted that this feature makes the employees to work hard to
initially understand the change, and then try to implement it by changing their regular
working practices which require more time and efforts in the business environment.
Therefore, employees resist to change in the business environment of Haier. The negative
team behaviour towards the change acted as an impact of change management in the
environment Haier. The individuals of the company were unable to understand the
reasons of increasing the quality standards of the manufactured products even when they
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Leading and Understanding Changes in Business 8
were leading in the Hong Kong environment. Disputes were also raised between the
teams that were satisfied and dissatisfied with the change management process in
business environment.
Leadership: In the perspective of leadership, the change management would make the
organization to use differential leadership strategies to increase its effectiveness. Basic
leadership strategies cannot casually implement change in the business. Therefore, the
business needs to transform participative strategies into transformational leadership
strategies. Further, considering terms of individual, it should be noted that the
organization need to change the behaviour of employees so that they could adopt the
change without facing resistance, however, resistance to change is one of result of change
management in the business. Lastly, as team behaviour, the management need to be more
cooperative with the employees to conduct the changes in business. Either the team
would show complete support to the change or it would exactly oppose to the proposal of
change. These are impact of change management objective in the Haier business
environment.
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Leading and Understanding Changes in Business 9
Force Field Analysis
Step 1: Proposal for Change
The company should practice the resources of technological advancement to improve the
quality of the production and enhancement of the logistics and distribution process.
Improvement in distribution and production chain
Step 2: Identification of Forces for Change
Need of new product by customer
Low maintenance cost
Betterment of resources
Improved production speed (Zand 2015)
Step 3: Identification of Forces against Change
Disruption
Improvement in
product and
supply chain
quality
Betterment of resources
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Leading and Understanding Changes in Business 10
Cost
Environmental impact
Staff unable to handle technology
Loss of staff overtime
Step 4: Assign Scores
Based on this analysis, it should be noted that the organization would take total 10 weeks to work
in favour of the change forces and 11 weeks to eliminate the forces that work against the staff.
Step 5: Analyse and Apply
It should be concluded that the company should adopt the described change in the business
environment of Haier so as to positively upraise productivity of the organization (Shrivastava,
Shrivastava, and Ramasamy 2017).
Measures taken to reduce negative impacts of change on business
behaviour
Initiate Communication: in order to improve the negative impact of change management from
the business environment, it is important for the organization to initially change the leadership
strategies and then initiate effective communication in the business environment.
Communication would help the company to understand the problems faced by the employees in
implementing change in the business and resolving their queries effectively. Communication
strategy would also increase the understanding of the employees towards the objectives of
change that the business wants to implement with the help of employees.
Initiate Flexibility and Innovation: further, change can be eliminated from the business
environment by introducing innovation and flexibility. It should be noted that the flexibility
aspect would help the employees to try out different methods through which they could help the
organization to achieve their decision in the business situation. Flexibility aspect would also
make the environment comfortable for the employees to work and express their views and
opinion to the top level management in the workplace environment. Innovation aspect would
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Leading and Understanding Changes in Business 11
help the organization to find out innovative ways through which they could easily implement
desired change management practices in the business environment.
Introducing Training Programs: the introduction of training program would effectively help the
organization train the employees who do not have adequate capability to implement change in
the business environment. It should be noted that this type of capability would help the
organization to train the employees and make them understand the need and importance of
change in the business environment.
Stakeholder Analysis
Governments
Investors
Customers
Competitors
Employees
Managers
Low Interest, Low Power
Suppliers
High Power, High Interest
High Interest, Low Power
High Power, Low Interest
ManagementMedia
Distributors
P
o
w
er
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Leading and Understanding Changes in Business 12
Kotter 8 Steps Model
The company would initially develop the of sense urgency in the business environment
that would make the employees understand that why it is important to implement change
in Haier environment.
Further, Haier should form alliance with the employees who accept and start to
implement change in the workplace environment.
Vision for the change management practice is derived in the organization so as to lead the
project into success.
Vision is communicated among the employees so that they perform actions in direction
of the change (Calegari, Sibley, and Turner 2015).
In the fifth step, resistance to change is eliminated from the workplace environment
through several activities like training, guiding, effective leadership etc.
Short-term wins and growth objectives are defined to create milestones for the change
management program.
Lastly, in the seventh step, change is built on the basis of success and failures of several
environment and
In the eight step, the environment and its activities are anchored so that the business start
to follow it regularly without going back to regular actions (Grant 2016).
Lewin’s Model
Unfreeze: in order to effectively make the employees and team implement change in the
business, the management would initially unfreeze the environment and make it flexible so that
the employee become comfortable and get to see the outcome of the changes.
Change: Once the environment is flexible, the organization takes the advantage of vulnerability
and makes the employees understand and adopt change. This is the phase where the organization
welcomes resistance to change on the part of employees and resolve it.
Refreeze: after making the employees comfortable with the change, the management of Haier
should again freeze the environment so that employees do not start to perform the previous
activities again (Hussain, et. al., 2018).
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Leading and Understanding Changes in Business 13
Forces for change and their influence on leadership decision-making in
the Haier Organization
Technology: it should be noted that the company wants to introduce technology in the business
environment with an objective to improve the quality of the products and services that they offer
to the customers. It should be noted that it is the biggest force for change for the organization
Haier in the business environment because it influenced them to taken change management
decisions in the business (Chatzoglou, et. al., 2016).
Culture: the culture of the company is another factor that influenced the change management
process in the business. It should be noted that the easy going culture of the organization was
introducing negligence and errors in the organization due to which it boosted the change
management process for the organization in the business environment. The ineffective culture
was increasing the manufacturing and operation issues for the organization (Putra 2019).
Business Strategy: with the change in time, it was seen that the business strategy of the
organization was becoming ineffective due to which, the need to implement change management
in the business was generated to improve the profitability and growth of the company.
The force field analysis helps the organization Haier analyse all the available resources present
with the organization and effectively use them to implement the plan. It should be noted that the
analysis would help the supporting factors and the factors that oppose the change and use them
wisely.
Lastly, it should be noted that these strategies made the organization to change the leadership
strategies so as to influence the employees in better ways. It should be noted that the company
changed the participatory practices to transformational practices in the business environment so
as to enhance the growth and achieve change management objectives in the business
environment (Son, Lee, and Kim 2015).
Change in technology capacity is directly connected with organisation business strategy of
expansion and diversification like in 2015, Haier announces investment plans to expand
manufacturing facility in India with a proposed investment of 370 crores as long term
commitment to the government (haier.com, 2015). At present, Haier has acquired more than
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Leading and Understanding Changes in Business 14
7000 patented technology certificates and 589 application intellectual property rights and also
has taken step towards alteration in nearly 100 technological standards (haier.com, 2015). The
next internal driving force is the Haier organisation culture that embraces constant progress and
the belief that success comes through change and the company is reinventing themselves from a
long period of time with the help of their corporate culture comprises of development concepts
and innovation spirits.
According to Forbes, the best result of the Haier culture is how its employees are used to
constant change in a highly competitive market (Hinssen, 2017). In relation with financial
management, Hair has a powerful stand in the dynamic business environment as it allows to
increase its spending on market and advertising, research and development and various others
significant areas. Hair believes that self-built R&D centre is not enough and so company is come
up with “10+N” model to realise “where there is a demand, there is a R&D centre” (Hope, 2018).
In relation with employee morale, the level of confidence and individual strength is very
important. At present, Haier comprises of 200 plus customers facing microenterprises and 3800
plus service and support microenterprises and the company also promotes entrepreneurial
employees means employee are no longer passive workers, however, are active partners –
stakeholder in the organisation.
In relation with external drivers of change, the competition is one of the biggest factor where
Haier top competitors includes Whirlpool, Harman, Daiking and Coocaa. Haier believes that
only firms that control industry standards are the greatest, rather than impacting firms themselves
via patents and even the national competiveness. According to insider report, Haier is the world
largest manufacturer of major appliances with over 10% of international market share
(businessinsider.com, 2018). In relation with customer satisfaction, the connection to customers
has helped Haier drift many individuals from their medium-value line of household appliances to
the more expensive Casarte brand. Haier undertake customer satisfaction as a key external driver
for the change in business strategies and plans and in concern with various opponents, the
company is always leading in the industry while ranking on the top of the customer satisfaction
survey result.
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Leading and Understanding Changes in Business 15
Advantages and disadvantages of different leadership approaches
Transformation Leadership: the biggest advantage of this type of leadership approach is that it
helps the employees to speak their heart out with the management and seek guidance for
implementing innovative functions in their business process. This type of leadership approach
also assists the change management process in the business environment and helps the
companies to eliminate resistance to change. This type of leadership incorporate new vision for
the people and the organization so as to improve the position where they are currently standing.
Further, the disadvantage of this type of leadership is that excessive pushing for innovation may
lead to irritation and dissatisfaction among the employees. It should be noted that this type of
leadership requires regular communication in the business environment and if the leader fails to
do so then they might break the leadership chain. Also, it should be noted that this leadership
requires to constant feedback taking and sharing with the employees.
Situational Leader: this type of leader is the one who adjusts their style according to the level of
development taking place in the organization. A situational leader is one who analyse the
environment in which he is working and then perform actions accordingly so as to satisfy the
employees and achieve the organisational objective. There is no adequate format of leadership
that a situational leader perform as they work on the basis of environmental conditions. This type
of leadership is required at the immediate level because it is the phase where employees resist the
most (Lynch 2015).
Lastly, it should be noted that the growth and success of the given change management program
and leadership can be seen through the dissolving of resistance to change and growth of
organizational productivity.
Haier should use transformational leadership because it promotes change management in
business, while on the other hand, situational leadership would change according to the situation.
Thus, if the environment becomes negative then situational leader would change the objective,
however, transformational leader would motivate the employees towards the completion of
objectives of company.
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Conclusion
Thus, in the limelight of above mentioned events, the fact should be noted that the paper
highlighted the information about the change management and leadership practices in a Hong
Kong organization Haier. The company aimed to increase the quality control of the products that
they serve. They also focused on improving the manufacturing and logistics process using
technology factor in the business environment. The company aimed to implement
transformational leadership in the business environment so as to improve the functions and
convert the change objective into action in the business environment. The internal and external
drivers of change are explained in the paper along with the analysis of the impact of such change
in the business environment. Thus, it should be noted that with the use of change management
practices, the company would be able to achieve better growth in the target market.
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Leading and Understanding Changes in Business 17
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Your All-in-One AI-Powered Toolkit for Academic Success.

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