Case 1 Bauhinia Case 2014

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Bauhinia © Martinsons & Associates 2009 Licensed exclusively for use at the City University of Hong Kong. Unauthorized use or reproduction of this case is strictly prohibited. This is a composite case that integrates the experiences of several companies. In the early 1970s, the Chan family pooled together $30,000 and set up a small dairy processing plant in Hong Kong. Bauhinia Dairy initially produced only fresh milk and sold it through limited distribution channels. It has subsequently modestly extended its business scope and now employs nearly 400 people. It remains a family-owned enterprise that values its traditions and relies mostly on verbal communications. Face-to-face meetings are still more common than memos, e-mails or other…show more content…
Such process innovation together with China’s development and the globalization trend are increasing competition between food providers from adjacent markets, and even different parts of the world. Victor wonders if Bauhinia can continue to thrive with only gradual organizational change. However, he is sceptical about adopting more formal systems and worries that major changes could put his whole company at risk. Victor is very eager to maintain Bauhinia’s reputation for quality. He has repeatedly said that Bauhinia must be “the best at whatever it does, even if that means that it is not the biggest or the first". He feels that Bauhinia has been successful financially because it offers a good work environment. This has helped it to attract well-qualified managers and employees. Rewards for both performance and loyalty have kept down Bauhinia’s turnover rate, but it now faces the problem of an aging workforce. Victor claims that he encourages his managers to be proactive and innovative. However, his intimidating manner seems to have discouraged such behaviour. Bauhinia’s managers often appear to wait for and follow Victor’s orders, not wanting to aggravate or argue with him. Some feel that Victor deliberately tries to catch them off guard. For example, the assistant marketing manager stated that "I’m not really sure if Victor is helping me to monitor the outside world or simply checking up on my work." Melamine in milk scandal In

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