Sample Sociology Essays on Organizational Change at Huawei

Change is inevitable both in personal and professional lives as well as in organizations. The modern corporate world is marked by rapid changes due to the ever-changing political, social, and technological environment. Therefore, a company needs to be ready and well prepared beforehand for change. Organizational change involves the transformation of the operations, structures, strategies, and cultures in an enterprise and an analysis of the effects brought by the transformations. Corporations that are averse to change are likely to be left behind or to be brushed off by the progressive forces of change. For smooth transitions, an organization needs to be highly dynamic, versatile, and adaptive apart from preparing adequately for change, which the management of Huawei Technologies recognizes.

Introduction of the Organizational Change

Huawei Technologies Co. is a Chinese telecommunication company that focuses on the manufacturing of telecommunication equipment and the sales of smartphones.  The company has a research and development subsidiary, Futurewei Technologies that is based in the United States. The subsidiary employs an estimated eight hundred-fifty people in various research labs spread across the United States (Strumpf 2019). Due to changes in the political environment in America, the firm has been blacklisted by the American government through its Commerce Department. This has, in turn, affected the company’s operations massively with the blacklisting blocking Huawei from procuring American technology without adequate licensing (Strumpf 2019). The blacklisting has resulted in Futurewei’s employees facing numerous restrictions, including their correspondence with their colleagues in Huawei’s headquarters in China. Besides, the blacklisting has resulted in the company being blocked from selling its products to several major U.S.airlines.

The changes in the political environment have resulted in the company forecasting that it will lose over $30 billion in revenue over the next two years. Besides, its international sales have fallen by almost 40 percent since the blacklisting (Strumpf 2019). The above factors have resulted in the company instigating an internal organizational change that will affect the business operation in its U.S.A subsidiary. Futurewei is keen on making a major change in its operation and structure. For example, it has planned to reduce its workforce. The number of employees set for layoff may be in the hundreds.

Two Concepts to Be Applied

The analysis of the organizational change will focus on the two concepts of decision-making school; bureaucracy and McDonaldization. The decision-making school developed after that of pure rationality. It holds that since people are limited in their knowledge, in time, they begin to satisfice instead of maximizing when it comes to decision making. To satisfice refers to picking the first acceptable alternative rather than the best or perfect one in the decision-making process. It is diametrically opposite of the rational paradigm.

The concept of scientific rationality produced by the bureaucracy was developed by German sociologist and philosopher Max Weber. According to Weber, bureaucracy is defined by authoritative hierarchical ranks, clearly defined roles, and a system of employment and promotion based on meritocracy, all hinged on the authority of the rule of law. According to Weber, for an ideal bureaucracy to exist, it has to stick to the principles of bureaucracy. Additionally, it has to be grounded on a set of impersonal rules that have universal application. An organization also has to employ the extensive use of written documents and file keeping and employ technically qualified experts assigned to specific divisions of labor. The bureaucratic system has to be maintained by subordinates obeying their superiors in rank and merit-based staff promotion and advancement (Mommsen 1977). Lastly, personal property has to be separated from organizational property. Bureaucracy establishes centralized authority in a firm, which makes it easier to execute orders and commands due to the hierarchy of ranks. The authority of bureaucracy is categorized into; traditional, charismatic, and rational authority. Weber argues that both traditional and charismatic authority based on individual attributes are fleeting compared to rational authority in which power lies with title and hierarchy (Mann 2011). This informs people’s respect for directors due to their director rank and title.

The concept of McDonaldization was developed by George Ritzer, an American sociologist in the late twentieth century. The idea was the central force that drove the rationalization of labor, production, and consumption from the late twentieth century to the twenty-first century. Ritzer based his idea on the features of the global fast-food chain store McDonald’s, which is well-known for its efficiency, calculability, predictability, control, and standardization.  McDonaldization espouses that organizations need to adopt the characteristics of MacDonald’s fast-food chains as the society and organizations, due to rapid changes, have moved from Weber’s bureaucratic structure (Ritzer 2018). The new structure is based on four key aspects, including efficiency, calculability, predictability and standardization, and control. Efficiency involves an astute managerial focus on the use of minimal time on completion of individual tasks and the entire production process. Efficiency focuses on an organization relying on the optimum method for production.  The aspect of calculability insists on an organization’s focus on quantifiable objectives, those that can be counted, rather than subjective evaluations. Predictability and standardization are based on consumer experience, which Ritzer argues are found in repetitive and routine production of consistent product quality. A good example is the Big Mac meal that is consistent in all McDonald stores worldwide. Lastly, control refers to the organization’s focus on consistency and quality control more so through the use of robots and technology.

Both the McDonaldization and bureaucratic approaches are characterized by the darkness perspective, which holds that organizations are purely efficient machines aimed at maximizing profits. This notion informs the decision of companies relying on both McDonaldization and bureaucracy that too much freedom and dependence of employees promotes chaos in organizations. Therefore, corporations are averse to people’s social and emotional needs. Ritzer explains that the narrow focus of McDonaldization on rationality has a long term effect of producing irrationality. At the end of the day, the rational systems and structures produced by McDonaldization lead to unreasonable systems and structures as they are disinclined to humanity. There mere the fact that the concept does not require skilled staff to ensure productivity adds to its inhumanity. McDonaldization has reduced the role and place of the worker in the organization and has limited their rights and wages. It has also spread to the consumer experience, with customers being involved more and more in the production process. A good example is the Ikea furniture business model, which incorporates the customer into the final production process of its products as the customer is involved in the assembly of the furniture.

Application of the Concepts

The Huawei Technologies Company is downsizing its staff in its American subsidiary, Futurewei Technologies. The downsizing is expected to involve massive attrition of staff that is estimated to cost hundreds of employees their jobs. Therefore, the company is undergoing a massive organizational change. The main cause of the need for downsizing is the recent blacklisting of the company by the American Commerce Department. The blacklisting complicated the process of procuring critical U.S components and software for the company, thus sending the company on a massive losing streak that has seen the sale of Huawei smartphones fall by 40 percent.

The concept of McDonaldization applies to the Huawei organizational change directly. The company relies on the McDonaldization approach to structure its operations, and therefore, all the four key aspects of the concept are involved in the changes. The management has to reduce its staff to ensure that the remaining workers can be effectively managed by the company’s dwindling financial resources while still meeting the required process of production and distribution to try and maintain efficiency at the organization (Ritzer 2018). The aspect of calculability is fundamental in the change process within the organization as it enables a company to focus on quantifiable objectives, such as quantity compared to quality evaluation, which will require more staff. Therefore, the organization’s main focus on quantity enables it to carry on with its massive staff attrition process.

Predictability and standardization of the organization’s production process and products that have led to predictable consumer experience is a key factor in the attrition of the company’s workforce. Because the firm’s consumer experience and satisfaction are predictable, the corporation’s downgrading plans cannot massively affect the standard of its products. Indeed, a smaller workforce will still produce the same consumer effect as the current one does. Lastly, the idea of control has also contributed to the organization’s decision to cut down on the number of its employees. The aspect of control ensures that companies invest in robots and technological advancements to maintain quality and reduce the number of human workers. Since the company has invested in technology, the retrenched staff will be replaced by it.

The McDonaldization approach has reduced rationality into illogicality in the company and therefore resulted in limited humanity in the organization’s decisions, which explains the massive retrenchment of employees by the company which is inhumane and highlights the fact that the company is more focused on adherence to organizational policies than human needs and emotions.

The concept of bureaucracy applies to the change being orchestrated at Futurewei. Bureaucracy, as per Weber, is based on rational, well-understood impersonal rules. These rules are not influenced by either political or human relationships. Therefore, they not concerned about the humanitarian effects and impacts. The decision by the company to cut down on staff is an example of impersonal rules that are not concerned with human relationships. The company’s policy of downsizing does not consider the human needs and feelings of the workers set to be retrenched.

Bureaucracies are maintained by extensive use of written documents and file keeping actions. However, the written documents have since been made obsolete due to technological advancements (Mommsen 1977). Since the processes of writing and filing of documents have been automated, numerous workers have been relieved from their roles. Besides, bureaucracies focus on the employment of qualified experts fulltime. However, innovations such as robots have reduced the need for skilled workers in the organization. This has directly contributed to the Huawei’s need for massive retrenchment of workers. The bureaucratic quality of hierarchy has also contributed to the staff attrition program by Huawei. The superiors are tasked with making decisions, which the subordinates are obliged to follow. Therefore, the subordinates are not involved in high-level decision-making processes, which means that they cannot oppose the retrenchment plan. Moreover, the subordinates cannot oppose the directives by their superiors as bureaucracy is built on respect of titles and rank. As such, the employees do not have a say in the direction that the organization takes.

Lastly, the fact that bureaucracy is built on the foundations of separation of personal property, humanity, and emotions from the organization’s processes has also contributed to the massive changes at Futurewei. The company is based on the bureaucratic approach that posits that organizations are efficient machines made to maximize profits with minimum satisfaction of the social and emotional needs of its human workforce (Mann 2011). As a result, it is unsurprising that the enterprise has resolved to reduce its cost of operation by firing staff members instead of seeking alternatives.

The massive organizational change in the Huawei subsidiary at the U.S Futurewei has been precipitated by changes in the political environment. However, a deep analysis of the organization’s structures reveals several collaborating factors that have influenced the decision to reduce the workforce. Huawei uses an amalgam of bureaucratic and McDonaldization approaches in its operations. These approaches encompass the darkness perspective, which does not have regard for the social or emotional needs of the workforce of organizations. These approaches, coupled with the ever-changing technology, which continues to replace human labor in modern companies, have prompted many enterprises to reduce their staff to reduce costs and maximize costs.

 

 

References

Mann, Douglas. 2011. Understanding Society a Survey of Modern Social Theory. Toronto: Oxford University Press.

Mommsen, Wolfgang J. 1977. The Age of Bureaucracy: Perspectives on the Political Sociology of Max Weber. New York: Harper et Row.

Ritzer, George. 2018. The McDonaldization of Society into the Digital Age. Los Angeles: SAGE.

Strumpf, Dan. 2019. “Huawei Plans Extensive Layoffs in the U.S.” The Wall Street Journal. Retrieved November 19, 2019 (https://www.wsj.com/articles/huawei-plans-extensive-layoffs-in-the-u-s-11563071144)