The Wang Group as a Typical Asian Family Firm
The Wang Group through its centralized leadership structure that is overly dependent on the CEO (in this case Charles Wang) as the primary decision maker within the company showcases many of the characteristics inherent in family led firms in Asia. Through this structure, major decisions involving operations are “filtered” so to speak through the head of the family before they are implemented.
The end result of such a process is that the different departments within a family owned firm have low levels of accountability or ownership behind the decision making process that goes into major company operations. Aside from this, another characteristic of the Wang Group as a typical Asian family firm are low levels of inter-department communication and collaboration due to the organizational structure that places an emphasis on business leadership instead of corporate leadership.
This manifested in experienced managers and executives within their respective departments but they had little knowledge or experience with the other aspects of the operational structure of the company.
This created a greater level of dependence on a centralized leadership structure which the study of Fernández-Aráoz, Iqbal, and Ritter stated brings about vulnerabilities in relation to resolving issues as they occur within the company since the CEO is only one man and thus leads to delays in creating an appropriate strategy for problem resolution (Fernández-Aráoz, Iqbal, and Ritter 84).
The last characteristic of the Wang Group as a typical Asian family firm is the inclusion of family members into the business who may not possess the talents or experience to actually handle their position.
Change Implementation at the Wang Group
Charles Wang attempted to change the Wang Group by diversifying the company’s interests beyond its original business model that focused on basic human necessities (i.e. food, clothing, housing, etc.) to encompass other industries such as mining, shipping and plantations. It was the desire of Wang to make the company more flexible in relation to its operational structure and the type of products sold in order to adjust to an ever changing business landscape.
Not only that, Wang also attempted to make the company more ethical and sustainable by making the company a more valued member of the local community. He did this by holding meetings with various executives and managers and attempted to create a more solid vision and mission statement they could follow that would manifest in all aspects of the company’s operations.
Aside from this, Wang also attempted to implement changes to the company’s organizational structure in the form of bringing in an outside CEO and his team in order to re-organize internal operations in such a way that the company would be capable of being as flexible as Wang envisioned it to be.
Wang recognized that the current leadership model that was being utilized was unsustainable in the long term with current family members either lacking the professional experience or the educational capability to take up positions within the company or they simply had no desire to engage in the family business.
When taking these factors into consideration, Wang determined that it was necessary for him to implement a leadership structure that could operate independently from the Wang family through the infusion of “new blood” so to speak into the company’s operational structure.
Obstacles Faced When Hiring a Non-family Member as the New CEO
The main obstacle that Wang encountered when he hired a non-family member as a new CEO was a phenomenon called “employee resistance to change”. Basically, when Wang brought in the new CEO to implement needed changes into the company, they encountered resistance from entrenched managers and other executives who had gotten used to the way in which the company operated.
This manifested in complaints and even a considerable level of confusion from within the company as employees struggled to adjust to the new operational structure that was being implemented. Unfortunately, the end result of these obstacles was that the new CEO eventually left with his team due to the extreme levels of resistance to change that were encountered that they were unable to surmount.
Ensuring the Wang Group Remains a Sustainable Family Firm
The inherent problem with the implementation process when it came to a new organizational structure was that it failed to take into account the fact that the original managers and executives within the company were too firmly entrenched into “the old ways” that any attempt to change it would be met with considerable resistance. What the company should have done was to replace current managers with new ones that were more amenable to change.
This might have led to the desired changes that the company was going for; unfortunately this was not accomplished at the time. Aside from this, the current business culture of the company (which focused on Wang) clashed with the desire of the new CEO to create a more decentralized leadership structure within the company.
This new structure was to help the different departments take ownership of the decision making process and enable operations to proceed without direct supervision. In order to bring about such a process, Wang should have put in place reforms in the company’s business culture before enacting new methods of structural change within the organization. By making the business culture more amenable towards changes to its organizational structure, this makes such change more likely to occur due to less resistance.
Works Cited
Fernández-Aráoz, Claudio, Sonny Iqbal and Jörg Ritter. “Leadership Lessons From Great Family Businesses.” Harvard Business Review 93.4 (2015): 82-88. Print.