TRANSFORMING THE NEW WORK PLACE:

BEYOND THE FAMILY BUSINESS

The Firm
John Law, aged 26 and single, is an engineering manager of C.W. Components Ltd. The
company is a manufacturing firm which makes electrical components. It now has about 600
employees in China. The company is a typical Chinese family business that started in Hong Kong
20 years ago. The company was employing about 300 employees before it made the decision to
move all of its productions lines into China. The manufactured products are sold in Hong Kong and
exported to Japan, the US and other overseas markets.
John joined C.W Components two years ago when it started its project in Baoan. Baoan is
a county in the Pearl River Delta economic development zone. It has advantage of being close to
Hong Kong, but unlike Shenzen, its neighboring county, Baoan has the added advantage of being
less regulated. In fact, the labor cost there is only half of that it Shenzen. It is easier to establish
quanxi here and the officials are local people who are eager to bring foreign investment into the
community. (Quanxi is a license fee or business charge levied on foreign firms doing business in
China).
John Laws work
John spends most of his working hours in Baoan, where he is responsible for one of the
three production lines. The company has a flat organizational structure and thus John has to take
up a variety of responsibilities, including production management, purchase of raw material,
inventory control, staff recruitment and training, and other miscellaneous matters. Recently, he was
assigned the duty of providing technical support to sales and therefore he has to spend some
times in the company headquarter at Taipo, situated in the New Territories in Hong Kong. John has
to work long and irregular hour and travel a lot. He has to beat the problem of untrained workers
who came from different provinces and counties, and speak different dialects. There is also a very
high labor turnover rate which he has to tackle day after day. In spite of this, John still likes his
present job for a number of reasons.
Firstly, John has seen the backwardness of China in engineering field. He is determined to
help train and develop the engineers in China and thus help raise its technological level. This a
deep-rooted desires. Thus he finds much meaning in his present job.
Secondly, John thinks that his present job provides good opportunities for selfdevelopment. He actively participated in the start up and running of the project in Baoan. This was
very good learning experience for him because, in the past two years, he dealt with and solved
numerous problems. His strong sense of achievement remains a driving force.

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Besides, his present boss, Mr. Chan Tai Nan, is a kind man who also shares Johns ideals.
There is a good working relationship between them.
Organizational structure
Mr. Chan Tai Nan, managing director of C.W. Components Ltd, runs the factory in a typical
family business style. Before the expansion in the PRC, the factorys management hierarchy
consider only of himself, his two sons and a number of other relatives. However, John law was
recruited as result of expansion.
Mr. Chan considers John Law an idealistic and competent young man. He is offering john
Law a remuneration package in line with the market rate, yet he knows that unless a promotion
system and staff development program is set up he is not going to keep John Law for long.
Questions
1. Do your group agree with Mr Chan that he will have difficulty in keeping John Law in his
company? Why?
2. Do your group think that the current organizational structure of C.W. Components Ltd
Should be reviewed?
3. What recommendations would your group make to the management of C.W. Components
Ltd about the organizational structure of its executive staff for its China operations?
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End note
1. Based on In pursuit of Ideals and Self Development
by Olivia Tse. Copyright 1990 the author

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