CHANGE MANAGEMENT, ORGANISATIONAL BEHAVIOUR
THE LINGHE SIMULATION
A Multimedia Organisational Change Simulation
LingHe: The LingHe Simulation models the dynamics of organizational change in a typical Chinese business environment. The simulation aims to stimulate and enhance managers’ understanding of organizational resistance to change and how to more effectively implement changes. It is an innovative learning tool and technique for improving their understanding of the organizational dynamics and the corresponding knowledge and skill in managing organizational change in a Chinese environment.
Areas: Change Management, Organisational Behaviour, Technology and Innovation Management & Marketing, Cross-Cultural Management
Authors: Albert A. Angehrn, Professor of Information Technology and Director of INSEAD's Centre for Advanced Learning Technologies (CALT), Philippe Leliaert, Shuming Zhao, Huifang Yang, and Leo van Effen.
Minimum time required: 1/2 day (ideally: 1 day)
Languages: English and Chinese.
The design of the LingHe Simulation is based on the existing EIS Simulation but now used in the context of organizational change in a Chinese business environment.
A complementary note gives a detailed description of the design of the LingHe Simulation, and further examines its effectiveness as an innovative learning tool and technique for improving the understanding of Western and Chinese mangers with regard to the organizational dynamics and the corresponding knowledge and skill needed to manage organizational change in a Chinese environment.
For further reference, see also: Albert A. Angehrn, Philippe Leliaert, Shuming Zhao, Leo van Geffen, Huifang Yang (2005), "Changing Chinese Firms: Overcoming Resistance," INSEAD Quarterly, No.11, July-September 2005, download.
"Understanding the Organizational Dynamics of Change in China - A Multimedia Simulation Approach," by: Shuming Zhao, Huifang Yang, Philipp e Leliaert, Albert A. Angehrn, and Leo van Effen, The Chinese Economy, vol. 41, no. 3, May-June 2008, pp. 68-69, download.
Design of the LingHe Simulation Context
The LingHe Simulation offers an advanced multimedia learning tool for Chinese and foreign managers who want to implement organizational change in current business in China. Besides being recognizable and realistic, the simulation context strives to "force" managers to make mistakes (on the premise that one learns as much if not more from one’s mistakes as from one’s successes) and avoid "quick-fix" solutions, including, for instance replacing the entire top-management layer and subsequently imposing the intended changes.
A fictitious business enterprise called the LingHe Company, located in Changsha, the capital of Hunan province was thus invented for the purposes of the simulation. The name and context of the LingHe Company were loosely based on the existing case of a state-owned textile company facing restructuring. The context was adapted to include the following boundary conditions, deemed to be the most relevant, typical, and recognizable challenges in China: (1) on-going privatization of state-owned companies and conversion to joint-stock companies, accompanied by the introduction of profitability targets and personal accountability; (2) the introduction of new (and sometimes poorly aligned) management cultures and values in joint ventures with Western or Western-style companies; (3) the introduction of new information and communication technologies and foreign managerial techniques in traditionally managed companies; and (4) "job-hopping" (i.e., frequently changing employers) by a younger generation of managers lured by better living standards and better career prospects in cities like Shanghai and Beijing.
The simulation has sought to portray a company that would be still relatively remote from Western influence (as in the immediate hinterland of cities like Shanghai, Beijing, and Guangzhou), based in a region with a moderate pace of economic change so that the need for further change was not felt very strongly. The description of the company as moderately profitable further reduced any urgency to change. The choice to make the company a (formerly) state-owned enterprise (SOE) reflected business reality in China, where many state-owned enterprises had recently become joint-stock companies in the hope of reducing bureaucracy and increasing cost efficiency, goals with which managers are not necessarily very familiar. This choice was made in spite of the fact hat the SOE organizational structure would very likely be hierarchical in nature, with decisions imposed from top down, negating the need to manage change because resistance would not be deemed very credible. This set-up was challenged by initiating the change from outside the company, namely, from its new majority shareholder following its conversion to a joint-stock company. Rather than immediately introducing foreign ownership, it was decided that the LingHe Company’s major Chinese customer would become the new majority shareholder. This reflected the close relationship that is often found between suppliers and customers in China and avoided any obvious resistance on the part of the LingHe management.
In sum, the particular Chinese context was defined in such a way as to convey a realistic case for change, a traditional company becoming a joint-stock company, under local managers who are unconvinced of any need to change the way they have always operated but nonetheless have to undergo and execute the change.
The ultimate goal of the LingHe Simulation learning experience is to transfer new skills to the management of a Chinese business. Specifically, this means:
- give a clear understanding of the key concepts & drivers of resistance to change
- provide a realistic picture of how resistance is articulated in China
- illustrate how group dynamics may be used to resolve and overcome resistance
- provide insight into how to plan and implement change in China
- provide insight into participants' own attitudes and behaviours regarding change
- gain a practical understanding of the role of management and leadership in ensuring that changes are adopted
- learn effective behaviours for avoiding and/or reducing resistance
- identify and mitigate root causes of resistance
The LingHe Simulation is aimed at those responsible for introducing and implementing knowledge and innovation strategies in China. This includes CEOs, GMs, HR and Project Managers, Heads of Departments, CIOs, etc., since all are involved in not only supporting knowledge sharing and innovation, but also motivating everyone to embrace the related changes.