Organizational Change In Lenovo Group China Commerce

Table of Content

Business organisations have to alter to accommodate to the altering environment. Management of alteration has been a hot issue in academic research for old ages. One popular sentiment considers that nowadays corporations will travel to decease without alteration. However, how to transport out right alteration is a ambitious inquiry for corporations. Bland and adrift alteration could be a catastrophe doing a fast autumn to the organisations.

Concentrating on the issue of direction of alteration in the organisation, this essay attempts to take usage of the relevant constructs to research and analyze the issue of alteration within a existent organisation. The mark organisation is Lenovo, one of the most celebrated Information technology companies in China, where the research worker had chance to work. Lenovo has experienced large alterations in its development route, particularly in 2005, it successfully acquired IBM Personal Computing Division. This acquisition is a milepost in Lenovo ‘s history, which has besides been an temblor within the organisation. In this essay, the research worker tries to place and analyse the issues brought by the alteration within the organisation.

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There are three parts in the chief organic structure of this research. First, Lenovo ‘s background will be presented briefly. In the 2nd portion, an overview of direction of alteration will be made in the first topographic point. Based on the theories and constructs, it moves to the instance of Lenovo. The nature and type of alteration, and the triggers for alteration in Lenovo will be identified severally. Furthermore, jobs caused by the alteration and Lenovo ‘s solution will be discussed in this portion. In the 3rd portion, taking Lenovo as an illustration, this essay will supply recommendations for Chinese corporations prosecuting alteration in its development.

Company Background

The company which this essay focuses is Lenovo Group, the taking IT company in China. Its chief undertaking is the industry and sale of personal computing machine. The history of this company can be dated back to 1981. The company was founded by merely 11 employees and with the name of Legend, keeping the doctrine that conveying IT to more Chinese consumers and concerns. With old ages of attempts, this company had become the top Personal computer industry in China since 1996, and carries out internationalisation stairss from 2000. It changes the name signifier Legend to Lenovo, which is the combination of the “ Le ” from Legend with “ novo ” ( intending neew ) from the Latin word in 2004. And twelvemonth 2005 has witnessed the most important alteration of Lenovo – the acquisition of IBM ‘s Personal computer Division. This action is considered as a milepost in history of Lenovo, because it combines the prima Personal computer manufactures both in US and China, doing a new incorporate international Personal computer leader. This concern determination proves to be right by the facts. With this acquisition, Lenovo has become one of the largest Personal computer makers in the universe range. The one-year gross of the company has reached 21 billion US dollars, with a series of trade names of Personal computers, like Thinkpad. Nowadays, Lenovo has been an international company, runing in more than 60 states with 23,000 employees worldwide. The company has been the 3rd largest Personal computer manufacturer and the fastest turning one in the universe top 5 Personal computer makers, with a universe market portion of 10.2 % ( Lenovo Official Website, 2012 ) .

Change within Lenovo

3.1 Brief Review of Management of Change

The necessity of alteration within the organisation has been widely recognized. Though the cause for alterations may be different for one corporation from another, the triggers could be summarized into two types, external factors and internal factors. Harmonizing to Elving ( 2005 ) , the concern environment is invariably altering. Corporations have to maintain gait with the altering environment to accomplish their concern purpose harmonizing to the environment. This is the external trigger for organisational alteration. On the contrary, the internal triggers come from the organisation indoors. Elving ( 2005 ) points out that technique development and forces publicity are of import internal triggers. Diefenbach ( 2007 ) considers that companies ‘ demand of development is one important internal factor for altering, particularly when public presentation is worsening.

However, change needs careful consideration. Any imprudent action could be really unsafe. Successful alterations are strategic and systematic. Brian and Walter ( 1993 ) place the alterations into different types harmonizing to the schemes used. They are planned alterations, little alterations and imploding alterations. Donaldson ( 2000 ) divided alterations into construction, forces, and technique alterations.

Changes ever face opposition from employees. Harmonizing to Morrell et Al. ( 2004 ) , the root for opposition against alteration is people ‘s fright for hazard. Some bookmans go deep into the grounds for opposition. De Jager ( 2001 ) focuses on the old employees, bespeaking that alterations are ever resisted by old employees for their concerns about losing the things and involvement they have owned. Robbins ( 2009 ) emphasizes the cause of declining alteration is due to people ‘s fright of uncertainness, as alteration could do things from familiar to unknown. Dent ( 1999 ) thinks that some opposition may come from employees ‘ consideration about the company end and development alternatively of themselves. Hence, it is necessary for endeavors to efficaciously pass on with their employees to do them clear about the significance, intent and method of alteration. Harmonizing to Altman and Iles ( 1998 ) , the ways of seting frontward the alteration should be flexible and advanced. However, in some particular state of affairs, some tough steps could be used to demo the organisation ‘s strong finding.

3.2 Analysis on Change in Lenovo

In August 2004, the president of Lenovo Group, has officially announced the acquisition of IBM ‘s Personal computer Division with a sum of $ 12.5 billion ( Lenovo Official Website, 2012 ) . It is completed in 2005. It is undoubted that this concern action is an tremendous alteration within the organisation. The rapid growing of Lenovo after the acquisition has proved that this determination of alteration is right and good handled. The experience of Lenovo makes a good illustration for those who are troubled by the alteration within the organisation.

Gun trigger for Change of Lenovo

The acquisition of IBM is a large alteration for Lenovo. The procedure of this acquisition lasts for five old ages from 2000 to 2005. This alteration is carried out with careful consideration and prudent behaviours. As mentioned above, triggers for alteration could be external and internal. External triggers emphasize the changing environment which enterprises have to maintain gait with so as to finish their concern end, while internal triggers come from the organisation indoors, such as technique, forces, etc. ( Elving, 2005 )

Looking into the instance of Lenovo ‘s acquisition of IBM, it could be found that this large alteration is driven by both external and internal factors. The external triggers for this alteration are summarized as follows.

First of wholly, it is a necessary measure for Lenovo to carry through internationalisation. Nowadays, confronting competition force per unit area, a figure of successful endeavors go abroad for more opportunities and bigger markets. The internationalisation provides endeavors chances for sustained development. Lenovo ‘s pick of being internationalized is to conform the universe economic development, which strengthens its competitory border. On the one manus, before the acquisition of IBM, Lenovo has been a taking company in Chinese Personal computer market. The company has occupied 1/3 of the section, and the top Personal computer company in China for 8 old ages. For Lenovo, the market of China is excessively limited for Lenovo to prosecute further development, and it has the capableness to travel internationalisation. On the other manus, with Lenovo ‘s concern going mature, the company faces more and more challenges. After China ‘s entry into WTO, a figure of celebrated Personal computer companies pour into Chinese market, such as IBM, Toshiba, Dell. Besides the trade name advantages, these Personal computer giants are strong plenty to supply merchandises at attractive monetary value. This ferocious competition causes monetary value war in Chinese Personal computer market. Under this circumstance, Lenovo bears unprecedented competitory force per unit area. To Lenovo, prosecuting internationalisation is non merely for development, but besides for endurance. It is proved that the acquisition of IBM is a fast mob for Lenovo to transport out international enlargement, which makes it the figure five top Personal computer manufacturer globally.

Second, through this alteration, the bargaining power with providers has been strengthened a batch. As mentioned above, the Chinese Personal computer market falls into a monetary value war. Therefore, the inexpensive monetary value natural stuffs are really of import. The acquisition of IBM makes Lenovo the universe taking Personal computer company. It improves Lenovo ‘s place when bargaining with the providers.

One of the most of import internal triggers for Lenovo to carry on this alteration is to get the most developed Personal computer engineering. IBM is considered the innovator in Personal computer bring forthing all over the universe, and the IBM Personal computer is by and large acknowledged as high-ended trade name. The acquisition of IBM makes it possible to entree the most developed technique. What ‘s more, besides technique in research and development, tactics in direction, production, selling and after service are all valuable hoarded wealths for Lenovo. The technique and direction accomplishments sharpen competitory border of Lenovo.

Harmonizing to Diefenbach ( 2007 ) , companies ‘ demand of development is one of import internal factor for alteration. Following this construct, Lenovo makes the determination of alteration in order to get the trade name of Thinkpad, the word-famous Personal computer trade name, and to make more clients. In this acquisition, Lenovo makes an understanding with IBM, that takes usage of the trade name of Thinkpad. This understanding avoids the hazards of unrecognizing the Lenovo trade name in international market. It is a safe measure to present Lenovo to international market and makes it possible for consumers to seek Lenovo ‘s merchandises. Furthermore, some of the foreign consumers hold negative sentiments to merchandises made in China, which are considered as low quality and deficiency of technique. The usage of Thinkpad trade name additions the entree to the new clients and attempts to alter their feeling on Chinese Personal computer.

Problems Originating with the Change within the Organization

Changes ever resisted by people for the uncertainness and hazards. This alteration in Lenovo is an temblor to the whole company, which faces a batch of jobs.

The most ambitious one is about “ people ” . Human resources are considered the most valuable plus for modern endeavors. By and large, the turnover of employees in acquired company is ever a critical issue for the purchasers, Lenovo is no exclusion. IBM employees have strong endeavor civilization background. How to minimise the turnover and do foreign employees accept the direction of Lenovo, a Chinese localised corporation, is a large challenge for the company, particularly in the high-ranking direction squad in US market.

In add-on, this alteration does non merely concern the abroad employees but besides is closely related to the original Chinese employees. How to equilibrate the two groups and do them harmoniously incorporate together are non easy undertakings. It ‘s known that the salary and wage system of the US and Chinese companies are wholly different. Hence, the company needs to happen out an effectual manner to fulfill both groups of employees, doing them experience every bit and good treated.

Furthermore, job is besides shown in civilization integrating. Cultural differences may do misinterpretation and struggles within the organisation. For Lenovo and IBM, the cultural differences exist non merely in the degree of corporation but besides the nationality. People ‘s behaviour and signifier of thought are profoundly rooted in the national civilization. It is inevitable that the western and eastern civilization collide with each other after the alteration. The point is how to better the common apprehension and do the two groups of people working in a harmonious environment. However, as a localised company, Lenovo has no adequate experiences on civilization integrating.

3.3 Solution of Lenovo on Problems Caused by Change

Sing the jobs originating from the alteration, Lenovo carries out a set of steps to do the alteration grows in a positive manner.

On the one manus, at the first beginning of the alteration, Lenovo makes a study to look into employees ‘ sentiment to the acquisition. Data collected shows that most of the employees both in IBM and Lenovo present positive attitude towards the event, though some of the foreign staff shows concerns about the hereafter. Harmonizing to the study consequence, Lenovo makes warrants to the staff in IBM that the IBM PC division is managed in international manner and the salary and wage system is non changed. This action eliminates the biggest concerns from the IBM employees, and strengthens their assurance about the acquisition, which maintains a batch of IBM original staff. On the other manus, to the Chinese employees in Lenovo, the company offers a new set of salary and wage strategy, which deduces the spread of the intervention so as to equilibrate between the two groups of employees. The attempts of Lenovo are effectual and efficient, which reduces the opposition in the procedure of alteration.

With respects of the cultural differences, Lenovo tries to happen similarities between the two in corporate civilization as the starting point. In the whole procedure of the acquisition, Lenovo seek common land with IBM while reserving differences, which makes the employees in both squads set up a incorporate identify about the hereafter of the company. But it does non intend Lenovo evades differences. The company takes usage of tactics to increase the communicating between the two. For illustration, it holds cocktail party, sets up civilization integrating treatment board, and builds cultural integrating commission. For the direction squad, particular preparation for cross-culture direction and linguistic communications is besides given to the employees in the company.

Recommendations on the Resistance of Change

The instance of Lenovo makes a good illustration for Chinese endeavors, which are troubled by the opposition of Change. Harmonizing to the instance of Lenovo, this essay gives the undermentioned recommendations.

First of wholly, as stated by Robbins ( 2009 ) , communicating is an first-class manner to manage the opposition. In the instance of Lenovo, the company pays attending to the effectual communicating with its employees about the alteration within the organisation. At the really beginning of the alteration, it makes study among employees in both US and China. Though this study, the company conveys the enterprise and the importance of the alteration. With informations collected, the company knows about employees ‘ attitude towards and concerns about this alteration. All the concerns are carefully considered by the company, and solution and schemes are made consequently, such as the warrant about direction system and the salary and wage system to IBM employees, and the accommodation of Chinese employees ‘ salary strategy. The fact proves that the communicating before the acquisition is effectual, which guarantees the alteration go swimmingly. In general instance, the opposition comes from employees ‘ feeling of uncertainness and fright of hazards. Good communicating could assist the employees understanding about the whole facts, therefore eliminate people ‘s uncertainty and opposition. Negotiations and treatment are two ways normally used in communicating.

Additionally, one aim of communicating is to cognize about employees ‘ thought about the alteration. Therefore, it is of import for company to be willing to listen to different voices and accept the suggestions about the alteration. Making employees involved in the determination devising procedure is an effectual manner to acquire their support ( Lawrence, 1963 ) . It should be noticed that to do the employees ‘ engagement contributes to the development of the company, employees ‘ preparation and development are necessary and of import

Second, carry oning a alteration is a systematic work, which needs a careful program. Blind action ever causes failure. It takes five old ages for Lenovo to finish this alteration. During this procedure, Lenovo has ne’er stopped for seting the program for the acquisition, and it involves the direction doctrine, human resources, corporate civilization, technique, production, selling etc. about every facets in a company. Although some alterations may be really little, they still need careful program in to guarantee an effectual execution.


In decision, direction of alteration has been a critical issue for endeavor. This essay takes usage of the relevant constructs to research and analyze the issue of alteration within Lenovo, the taking IT company in China. It focuses on the event of acquisition of IBM, the biggest alteration within the organisation, traveling deep interior of the issues brought by the alteration.

The triggers for alteration could be external and internal. Enterprises have to be adopted to the altering environment. It is the external trigger for alteration. Internal triggers come from the organisation indoors, such as the technique, forces. Furthermore, the demand for development is another of import internal trigger. The triggers for the alteration of Lenovo are the combination of the external and internal factors. For external triggers, on the one manus, internalisation is the development tendency for successful endeavors. On the other manus, the company faces strong competition from international Personal computer companies like Dell, IBM. To heighten the competitory border, the alteration for internalisation is necessary. One of the most of import triggers for Lenovo is the demand new technique from IBM. What ‘s more, through this alteration, Lenovo can get the trade name of Thinkpad and make out new clients in international market. Harmonizing the theories of alteration, organisation alteration is ever resisted by the employees for the feeling of uncertainness and frights of hazards. The biggest job of this alteration for Lenovo besides comes from people. On the one manus, IBM employees worry about altering to the Chinese direction manner, and losing involvements in salary and wage. On the other manus, different wage and wage systems make Chinese employees feel unequal and disgruntled. What ‘s more, this alteration may besides do cultural struggles between the Chinese and the Americans. Acknowledging these oppositions, Lenovo takes some effectual steps which guarantee the execution of the alteration. Lenovo sets up a good illustration for organisation prosecuting alteration. Its experiences are summarized and given as recommendations in this essay. First, successful alteration is based on the effectual communicating with employees. Second, alterations either large or little need careful consideration and program. .

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