preview

Case Study: Chengdu Bus Group

Decent Essays
Open Document

CHENGDU BUS GROUP
By Runtian Jing, University of Electronic Science and Technology of China
The Chengdu Bus Group (CBG) is a Chinese, state-owned enterprise with more than 4,000 buses and 14,000 employees. A few years ago, CBG encountered serious problems. The primary issue was the company’s management systems, but it also faced a considerable financial crisis. Complaints against CBG from its many customers were becoming increasingly common, and the operations of the company were in disarray.
At the end of a troubled year, Dr. She Chen was appointed the director (CEO) of CBG. Dr. Chen had proven himself in previous positions as a thoughtful and insightful manager. He had accumulated a wealth of experience in not only effective …show more content…

However, this organization created significant problems and inefficiencies each company ran its operations independently of the other companies and did not share stations or repair workshops-essentially, the four companies were in direct competition.
Furthermore, different routes throughout the city had quite different profit rates. Without any formal authority coordinating the companies or implementing policies and rules, there was overcompetition for the desirable high profit routes, resulting in inefficiencies and losses for all of the companies. To rectify this situation, Dr. Chen arranged for CBG to buy back the external equity of the joint ventures and changed the branch operations to purely state-owned subsidiaries. He then removed overservicing on the high profit rotes and redployed the surplus buses and employees from these routes to develop the potential profitability of other routes, under the principle of optimization.
All the routes were rezoned to fall under the operations of four specific areas of the city, forming the eastern, western, southern, and northern bus companies. All bus stations were amalgamated into a single repair company. These reforms amalgamated into a single repair company. These reforms made it possible for each of the four bus companies to obtain services from the station company or repair company anywhere in the city, which greatly reduced resource waste, overcompetition, and operating costs.
SALARIES AND

Get Access
Related
Get Access