Harvard Case - Chairman Zhang and Broad Group: Growth Dilemmas
"Chairman Zhang and Broad Group: Growth Dilemmas" Harvard business case study is written by Christopher Marquis, Nancy Hua Dai, Juelin Yin. It deals with the challenges in the field of Organizational Behavior. The case study is 29 page(s) long and it was first published on : Dec 15, 2011
At Fern Fort University, we recommend a strategic shift for Broad Group, focusing on organizational change management and leadership development to navigate its growth dilemmas. This involves fostering a culture of innovation and employee empowerment, while implementing structured decision-making processes and effective communication strategies. This approach will enable Broad Group to leverage its core competencies in construction and technology, while addressing internal challenges and navigating the complexities of international expansion.
2. Background
The case study focuses on Broad Group, a Chinese construction and technology company experiencing rapid growth. Chairman Zhang, the founder and CEO, faces several challenges:
- Internal conflicts: A clash between the traditional construction division and the new technology-focused division, leading to power struggles and resistance to change.
- Leadership styles: Zhang's autocratic leadership style, while effective in the early stages, is hindering the company's ability to adapt to a more complex and globalized environment.
- Lack of clear strategy: The company lacks a comprehensive growth strategy that aligns its diverse businesses and addresses the challenges of international expansion.
- Organizational culture: The company's hierarchical structure and emphasis on obedience are not conducive to innovation and employee engagement.
3. Analysis of the Case Study
Organizational Behavior Framework: The case study can be analyzed through the lens of organizational behavior, focusing on:
- Leadership styles: Zhang's autocratic style is creating a culture of fear and stifling employee creativity.
- Team dynamics: The clash between the construction and technology divisions highlights intergroup conflict and the lack of cross-functional collaboration.
- Motivation theories: Employees in the technology division are demotivated by the lack of autonomy and opportunities for professional development.
- Change management: The company's rapid growth has led to resistance to change and a lack of effective communication strategies.
- Power and politics in organizations: The struggle for power between the two divisions is impacting decision-making processes and organizational efficiency.
Strategic Framework: Broad Group needs to adopt a growth strategy that addresses the following:
- Market diversification: Expanding beyond the Chinese market requires a deep understanding of international business and cross-cultural business relations.
- Innovation and technology: Leveraging its technological expertise is crucial for competitive advantage, but requires investment in research and development and a culture of innovation.
- Organizational structure and design: A more flattened organizational structure with empowered teams is necessary to foster innovation and employee engagement.
4. Recommendations
1. Leadership Development and Succession Planning:
- Leadership training programs: Implement leadership training programs for senior management, focusing on transformational leadership, emotional intelligence, and delegation.
- Mentorship program: Pair experienced managers with younger employees to foster knowledge transfer and leadership development.
- Succession planning: Develop a clear succession plan for key leadership positions, ensuring continuity and stability during periods of rapid growth.
2. Organizational Change Management:
- Communication strategy: Establish a clear and consistent communication strategy to ensure all employees are informed about the company's vision, goals, and changes.
- Employee engagement: Implement initiatives to improve employee engagement, including performance management systems, employee feedback mechanisms, and recognition programs.
- Diversity and inclusion: Promote a culture of diversity and inclusion to attract and retain top talent from diverse backgrounds.
3. Strategic Growth Plan:
- Market research: Conduct thorough market research to identify new growth opportunities in international markets.
- Strategic alliances: Form strategic alliances with international partners to leverage their expertise and market access.
- Innovation strategy: Develop a clear innovation strategy that focuses on developing and commercializing new technologies.
4. Organizational Structure and Design:
- Flattened hierarchy: Transition to a more flattened organizational structure with empowered teams.
- Cross-functional teams: Create cross-functional teams to foster collaboration and innovation across different divisions.
- Performance management: Implement a performance management system that aligns with the company's strategic goals and rewards innovation and collaboration.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies: Leveraging Broad Group's expertise in construction and technology to expand into new markets.
- External customers: Meeting the evolving needs of customers in a globalized market.
- Internal clients: Fostering a positive work environment that attracts and retains top talent.
- Competitors: Staying ahead of the competition by embracing innovation and technology.
6. Conclusion
By implementing these recommendations, Broad Group can navigate its growth dilemmas and achieve sustainable success. This involves fostering a culture of innovation and employee empowerment, while implementing structured decision-making processes and effective communication strategies. This approach will enable Broad Group to leverage its core competencies in construction and technology, while addressing internal challenges and navigating the complexities of international expansion.
7. Discussion
Alternative approaches include:
- Mergers and acquisitions: Acquiring existing companies in international markets.
- Joint ventures: Partnering with local companies to gain access to new markets.
Risks and Key Assumptions:
- Resistance to change: Employees may resist the proposed changes, requiring effective communication and change management strategies.
- Cultural differences: Navigating cultural differences in international markets requires careful planning and sensitivity.
- Economic fluctuations: Global economic conditions can impact the company's growth trajectory.
8. Next Steps
- Develop a detailed implementation plan: Outline specific actions, timelines, and resources required for each recommendation.
- Communicate the plan to all employees: Ensure transparency and buy-in from all stakeholders.
- Monitor progress and make adjustments: Regularly review the implementation plan and make necessary adjustments based on performance metrics.
By taking these steps, Broad Group can transform itself from a rapidly growing company to a truly global leader in construction and technology.
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Case Description
Zhang Yue, founder and chairman of Broad Group, had developed a series of innovative products aimed at solving China's environmental problems. Broad Group's products, services, and management were guided by values that prioritized morals, responsibility, environmental protection, and energy conservation over company growth and profit. Zhang's current focus was Broad Sustainable Building (BSB), a unique prefabricated building technology that was significantly more environmentally friendly than traditional building methods, as well as much less expensive. In order to obtain the capital and talent that BSB's development required, Zhang realized he may need to publicly list the company, despite publicly saying he never would do so. Would scaling the new businesses result in compromises to the mission and values that guided the company? If so, was the overall environmental impact from the new building technology worth the cost?
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