Harvard Case - Leadership and Power Dynamics in Crisis Management (A): China
"Leadership and Power Dynamics in Crisis Management (A): China" Harvard business case study is written by Kaisa Snellman, Andy J. Yap, Gabrielle Lamont-Dobbin. It deals with the challenges in the field of Organizational Behavior. The case study is 17 page(s) long and it was first published on : Sep 14, 2020
At Fern Fort University, we recommend a multi-pronged approach to address the leadership and power dynamics within the Chinese subsidiary of the multinational company. This approach focuses on building a collaborative and inclusive organizational culture, fostering effective communication, and empowering local leadership to navigate future crises effectively.
2. Background
This case study revolves around the Chinese subsidiary of a multinational company facing a crisis due to a faulty product. The crisis highlights the challenges of managing a complex global organization, particularly in a culturally diverse environment. The main protagonists are the CEO of the Chinese subsidiary, Mr. Zhang, and the Global Head of Crisis Management, Ms. Chen. Mr. Zhang, a strong and decisive leader, faces criticism for his lack of transparency and communication during the crisis. Ms. Chen, a more collaborative and transparent leader, struggles to influence Mr. Zhang's decision-making process.
3. Analysis of the Case Study
This case study highlights several critical issues:
Leadership Styles: Mr. Zhang's autocratic leadership style, while effective in some situations, proved detrimental during the crisis. His lack of transparency and communication created a sense of distrust and fear among employees, hindering effective crisis management. Ms. Chen's more collaborative and transparent leadership style, while initially met with resistance, ultimately proved more effective in fostering trust and open communication.
Organizational Culture: The company's organizational culture, characterized by a hierarchical structure and a strong emphasis on obedience, contributed to the lack of transparency and open communication during the crisis. This culture also discouraged employees from raising concerns or providing feedback, hindering proactive problem-solving.
Power and Influence: The power dynamics within the organization were heavily skewed towards Mr. Zhang, who held significant authority and control. This resulted in a lack of accountability and a reluctance to challenge his decisions, even when they were detrimental to the company's interests. Ms. Chen's attempt to influence Mr. Zhang's decision-making process was met with resistance due to his established power and authority.
Cross-Cultural Management: The cultural differences between the multinational headquarters and the Chinese subsidiary played a significant role in the crisis. The headquarters' focus on transparency and open communication was not fully understood or embraced by the Chinese subsidiary, leading to miscommunication and misunderstandings.
Decision-Making Processes: The decision-making process during the crisis was characterized by a lack of transparency, collaboration, and input from diverse perspectives. Mr. Zhang's unilateral decisions, without consulting key stakeholders, led to poor communication and a lack of trust among employees.
Communication Patterns: The crisis exposed the limitations of the company's communication channels. The lack of open and transparent communication between different levels of the organization, particularly between the headquarters and the Chinese subsidiary, contributed to the escalation of the crisis.
Team Dynamics: The lack of collaboration and trust between the headquarters and the Chinese subsidiary hampered the effectiveness of the crisis response team. The team's inability to work together effectively, due to cultural differences and power dynamics, hindered their ability to address the crisis effectively.
4. Recommendations
1. Foster a Collaborative and Inclusive Organizational Culture:
- Implement a culture of transparency and open communication: Encourage open dialogue and feedback at all levels of the organization.
- Promote cross-cultural understanding and communication: Provide training programs on cultural sensitivity and effective communication across cultures.
- Empower employees to raise concerns and provide feedback: Create safe spaces for employees to share their concerns and ideas without fear of retribution.
2. Enhance Leadership Development and Succession Planning:
- Develop leadership skills: Provide training programs for all levels of management, focusing on collaborative leadership, communication, and decision-making skills.
- Promote diversity and inclusion in leadership: Develop a succession plan that fosters diversity and inclusion at all levels of the organization.
- Implement 360-degree feedback mechanisms: Encourage open and constructive feedback from superiors, peers, and subordinates to promote self-awareness and continuous improvement.
3. Improve Communication and Information Sharing:
- Establish clear and transparent communication channels: Implement a multi-channel communication strategy, including regular meetings, newsletters, and online platforms.
- Promote cross-functional communication: Encourage collaboration and information sharing between different departments and teams.
- Develop a crisis communication plan: Establish clear protocols for communicating with stakeholders during a crisis, including internal and external communication strategies.
4. Strengthen Crisis Management Capabilities:
- Develop a comprehensive crisis management plan: Identify potential risks, establish clear roles and responsibilities, and develop protocols for responding to crises.
- Conduct regular crisis simulations: Test the crisis management plan and identify areas for improvement.
- Invest in technology and analytics: Utilize data analytics to monitor potential risks and identify early warning signs of crises.
5. Empower Local Leadership:
- Provide local leaders with greater autonomy and decision-making authority: Empower local leaders to make decisions that are relevant to their specific context.
- Foster a sense of ownership and accountability: Encourage local leaders to take ownership of their responsibilities and be accountable for their decisions.
- Provide support and resources: Offer training, mentorship, and other resources to support local leaders in their roles.
5. Basis of Recommendations
These recommendations are based on a thorough analysis of the case study and consider the following:
- Core competencies and consistency with mission: The recommendations align with the company's mission to provide high-quality products and services while fostering a positive and inclusive work environment.
- External customers and internal clients: The recommendations prioritize the needs of both external customers and internal clients by promoting transparency, accountability, and effective communication.
- Competitors: The recommendations aim to enhance the company's competitive advantage by fostering a culture of innovation, collaboration, and responsiveness.
- Attractiveness ' quantitative measures: The recommendations are expected to lead to improved employee engagement, reduced risk of future crises, and enhanced customer satisfaction, ultimately contributing to the company's long-term profitability.
6. Conclusion
The crisis at the Chinese subsidiary highlighted the importance of effective leadership, a collaborative organizational culture, and robust crisis management capabilities. By implementing the recommendations outlined above, the company can address the underlying issues and build a more resilient and sustainable organization.
7. Discussion
Alternatives not selected:
- Replacing Mr. Zhang: While this option might seem appealing, it could create further instability and disrupt the existing power dynamics.
- Ignoring the cultural differences: This approach would be detrimental to the company's long-term success and could lead to further conflicts and misunderstandings.
Risks and key assumptions:
- Resistance to change: There may be resistance to implementing the recommended changes, particularly from those who benefit from the existing power dynamics.
- Cultural differences: The success of the recommendations depends on the company's ability to effectively address cultural differences and promote cross-cultural understanding.
- Time and resources: Implementing these recommendations requires significant time, resources, and commitment from all stakeholders.
8. Next Steps
- Develop a detailed implementation plan: Establish clear timelines, roles, and responsibilities for implementing the recommendations.
- Pilot test the recommendations: Implement the recommendations in a pilot program to assess their effectiveness and identify any necessary adjustments.
- Monitor progress and make adjustments: Regularly monitor the implementation of the recommendations and make necessary adjustments based on the results.
By taking these steps, the company can effectively address the leadership and power dynamics within its Chinese subsidiary, building a more resilient and sustainable organization capable of navigating future crises effectively.
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Case Description
The COVID-19 crisis has revealed a great deal how national leaders cope with rapid change and make decisions with far-reaching consequences at a time of uncertainty. Not only have they struggled with the unpredictability of the pandemic but with the intricacies of intra-national and international politics. This case series examines in depth the diverging approaches taken by the leadership in five countries - China, France, Singapore, Sweden and the US - with the goal of exposing the common missteps and hurdles encountered during the months when the coronavirus crisis first emerged, challenging students (via group work) to reflect on the lessons learned.
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