WAC Analysis of the Case Study “Liu Bai: A Chinese Successor’s Dilemma”

in fulfilment of WAC Assignment

Submitted to Professor Urjani Chakravarty

By: Onkar More 2018PGP248

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Letter of Transmittal:
To

Ms Urjani

Professor, IIM Indore

Date: 19th Nov, 2018

Subject: Recommendation of the case “Liu Bai: A Chinese Successor’s Dilemma”

Dear Ma’am,

This letter is to transmit the recommendation of the case “Liu Bai: A Chinese Successor’s Dilemma”
based on the analysis done by me. Further details of the case is attached with the letter.

Regards

Onkar More

2018PGP248

PGP1, IIM Indore

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Executive Summery
The case is about Liu Bai who has left his family business of sugar trading and currently working in
London for one of its competitors. The reasons for leaving the family business after working for two
years are behaviour of Bai’s father Liu Hong towards Bai and Hong’s leadership style. After three
years of leaving, Bai has got call from Hong to return back to family business to save it from being
sold due to declining profits as well as flooding and political unrest in Malaysia. Hong has promised
that Bai would regain the status of successor and heir if he returns to Malaysia. Returning would
mean Bai would possibly have to work again under Hong’ influence. This is though decision for Bai to
take.

As per my suggestion, Bai should return not as successor but as contractual head of business with
pre-agreed terms.

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Table of Content

Sr No Content title Page No

1 Cover page 1

2 Letter of Transmittal 2

3 Executive Summery 3

4 Situation analysis 5

5 Problem statement 6

6 Criteria for evaluation 6

7 Evaluation of options 7

8 Recommendation 8

9 Action plan and implementation 8

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Situational Analysis
Bai’s family is typical Chinese patriarchal family wherein there is a lack of open communication not
just within Bai and Hong but also among all family members about common family problems and
business. There has been no communication between Bai and Hong and other family members since
Hong decided to disinherit Bai.

Hong is a person with strong personality. His behaviour towards Bai has been that of manipulative and
controlling. Now that Hong has called Bai back to run family business, Bai expects similar treatment.
Hong has brought his family hierarchy into business because of which Bai could not exercise enough
freedom in decision making while running family business.

One of the reasons for Bai to leave Plantation Sugar Trading, the family business, was Hong’s
leadership style. Bai found Hong to be extremely controlling, autocratic and mistrustful. If Bai accepts
Hong’s offer, he gets a chance to pull out family business from its current state as well he gets a chance
to prove his abilities and re-earn respect in the eyes of his family. Bai’s decision to return would have
lot of risks coupled with it. What risks would Bai take on should he accept succession? Bai would have
to think rationally and decide what is his purpose to go back and what he wants to achieve?

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Problem statement
Amidst the dilemma of whether to accept Hong’s offer completely or to refrain from going back to
save family business, what is it that Bai wants to achieve??

Options
1. Reject Hong’s offer and continue current career
2. Accept Hong’s offer and return as a successor
3. Return not as successor but as contractual head of business with pre-agreed terms

Criteria for evaluations

1. Career Progression
2. Freedom related to work and personal life decisions
3. Reunite with family

Freedom related to
work and personal life Reunite with family
Options\Criteria for Evaluation Career Progression
decisions

Reject Hong’s offer and

continue current career High High Low

Accept Hong’s offer and return

as a successor Mid\High Low\mid High

Return not as successor but as

contractual head of business
Mid\High High High
with pre-agreed terms

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Evaluation of Options
Option 1. Reject Hong’s offer and continue current career

Bai has proved himself to be a success by getting a good job in London and surviving without any
family support for three years. His desire to work independently in his job and implement his decisions
has come true. He stands to acquire bright career opportunities in the current company he is working
for due to his strong performance and past experience. He however would miss the opportunity to
regain trust and respect from his family members and he might not get similar opportunity in near
future. Letting decades old family business fail and get sold would bring disgrace to his family and
eventually to him personally. The last time he decided to move away from family was not because of
his selfish desire of personal freedom but this time if he decides not to go, he might blame himself in
future for choosing selfish decision. Considering the family and social culture Bai grew up in, Bai should
not choose this option.

Option 2. Accept Hong’s offer and return as a successor

Accepting Hong’s offer to become a successor gives Bai an opportunity to run family business his own
way and implement necessary changes to revive it from current state of declining profit. Also, it gives
him the step up in his career. The opportunity of running such a big business single headedly would
not be so easily available for him in his current career. Also, he stands to reunite with his family with
respect considering its Hong, the family head, who has asked him directly to return. But whether Hong
would allow Bai to run the business with full autonomy would an unanswered probability. If such a
thing happens, Bai’s purpose of returning would not be fulfilled. He probably would not be able to pull
back the family business and also, he would miss on the opportunity to handle the business his way
and acquire valuable learnings along the way.

Option 3. Return not as successor but as contractual head of business with pre-agreed terms

Accepting Hong’s offer as it is and returning as a successor would bring back the war of power and
control among Hong and Bai. Hong might not necessarily allow Bai to run the business autonomously.
By making Hong agree to terms and only then return would increase the certainty of Bai achieving his
purpose of returning to family business. Bai would be able to counter Hong’s continual overarching
influence on family business. Hong leadership style and personality has had major influence on
business’s performance. By working as head of business and not as a successor, Bai would be
responsible only for the decisions he would make and avoid the risk of blame due to Hong’s decisions.
At the same time, he would get to run a big business and still get a chance to get along with his family.
The terms and clauses would make Bai to detach himself again from family business should Hong try
to manipulate company’s working.

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Recommendation
According to my analysis of the case “Liu Bai: A Chinese Successor’s Dilemma”, Bai should follow
option 3 to return not as successor but as contractual head of business with pre-agreed terms.

Action Plane and Implementation

Bai should utilize the two weeks’ time that he has sought to convey his decision to Hong to decide the
terms to agreement. Bai should demand non-interference in decision making from Hong along with
full autonomy. He should frame in other agreements as well such as compensation, responsibilities,
job role, designation etc. Bai should also decide upon the timeline of agreement and should notify his
further course of action if he succeeds in his goal of pulling up family business. Bai should legally frame
the document with the help of lawyer and get it signed from Hong. Bai should return only with the
signed agreement from Hong.