Change Management and Transformation of Work in South Africa Chenjie Bao A46607917 [email protected] edu 09/2012 A. Reflecting on the whole notions of change management and “transformation of work,” how has your understanding of the concepts generally been confirmed, changed or expanded by the visit to South Africa? What are the contrasts and commonalities between the South African context and experience and those of the US and other nations with which you may be familiar? Reflect on themes like the pace of change, alternatives to the status quo, winners and losers in change processes, etc.
About Changes in South Africa South Africa is the only developed country on the African continent, and its economic strength and political influence in Africa play an important role. The apartheid system was broken in 1994 after the ANC came to power in South Africa in a political democratization process, South Africa experienced a period of rapid development, but the internal strife of the African National Congress and the economic structure of the country have limited the growth of the economy. The advent of the global economic crisis in 2008/2009 has only created further stress on the economy.All of these factors will affect the parliamentary elections and will give the new government in South Africa serious challenges. Last century in South Africa, the small but powerful white minority that had monopolized all economic and workplace activity, other than manual labor, had been tasked to change the workplace to be more representative of the population as a whole. This small white minority used to act as gatekeepers for the majority who were in power, politically and economically. Over the past two decades, the economic and security situation in South Africa has been declining year by year as seen by a series of problems such as the overnment deficit, unemployment rate, crime rate, brain drain, power shortages plaguing the whole nation and others.
The cause of these problems can be traced to the government. From Mandela to Zuma, South Africa has had three presidents and one acting president, what these four black presidents all made effort to do is to free the country from influence of the former administration dominant by white people. The regime that used to be efficient and powerful had become corrupt and incompetent. Gradually quitting politics of white South Africans, the white has been losing their grip on economy.
Now that blacks have power, they have started to slowly get access to money, with the government continuing to adopt policies and legislation in favor of blacks. Welfare and treatment of blacks is getting better, while the political and social status of blacks is also improving. Affirmative action type programs are slowly marginalizing whites in various fields of the South African economy; the reality on the ground is that many white youths still in college are seeking employment outside of South Africa due to the lack of jobs (real or perceived).Deprived of jobs and social status in the coming future, these young white people with their roots in South Africa choose to leave their homeland. “Discretion and equal treatment to employees regardless of their race, history or social status—will succeed or fail on the basis of whether the people affected do things differently. ” Today, the white network that ran major businesses before 1994 has largely been replaced by a new generation of black executives who are more interested in personal identity than capability.
This is a country in transition and one with complicated cross-cultural management.Therefore a successful transition is more likely if the different management styles are handled with careful cultural discretion and equal treatment to employees regardless of their race, history or status of today. What do I think about change management after visiting SA? 1. The well-known maxim, there is nothing permanent except change, is particularly pursued by the change management consultants. But there is also a potential pitfall: if change were only sought for change’s sake, the business acumen of its own nature would be lost.
Admittedly, one of the keys to accomplish business success does not fall solely on implementing change, but finding a balance between innovation and heritages. Those who maintain long-term success are usually those who manage to find their way and hit the balance point. While Coca-Cola faced fundamental changes in its ownership, management and organizational structure in the past 50 years, it has been loyal to its initial brand, market and core values. Of course, there was the well-known misstep with “New Coke”, but the company quickly realized its mistake and went back to “Classic Coke”.A key aspect of successful Change Management is to keep a sensitive grip on the content as well as the degree of changes. It takes discretion and resolution to discern and decide which part of the process does not need to be adjusted. Repairing things that still can justify their own existence may bring a nice sense of personal achievement, but inevitably backfire and bring the situation into new trouble.
Unnecessary change gives a false sense of progress: usually, this progress is not as good as no progress. 2.The most difficult part of leading change management is convincing middle management to make adjustments in the way they manage and operate, because they have been conditioned to certain behavior patterns that can best be described as “playing it safe”. Middle managers act as an axis to both implement new means to lead the organization and dealing with resistance from frontline employees. Once entrenched in cultural comfort zones of bureaucracy, a rules-based culture engrained with severe discrimination tends to lack the flexibility and staff empowerment elements required for dealing with contextual instability.Many executives do not really understand the concept “culture” and what it takes to nurture a desired culture. A lack of awareness and progress on the change effort furthermore leads to a change effort that is short-lived. One of the major difficulties is that those entrusted with implementing changes are resistant to do so because the very changes that are being implemented marginalize them and reduce their power and influence.
This was seen many times in the utter disregard that many line managers had for their employees. This further increases the resentment between both groups. Comparison between South Africa and China 1. Migrant laborSouth Africa’s economic takeoff of the manufacturing sector has mainly depended on black workers, and should be by having black laborers only working in the city, but living in “homelands” outside of the major cities.
The authorities officially title them “migrant workers “. In a similar way, the well-known growth of China’s economy can be credited to migrant workers who number up to two hundred million. In the meantime, children, women, and elderly are left behind in the “new socialist countryside”. In the words of South African apartheid theorists W. W. Esselen, they enter the cities only to serve temporary economic reasons.
In other words, “they are allowed to enter cities since they are just looking for work rather than settlement. ” Precisely put, the counterparts of ” migrant workers ” in China are called “birds” or “amphibious”. This system gives rise to one of the most spectacular scenes—the “flood of migrant workers to return home before and after the Chinese New Year. ” Whereas in South Africa, the largest gathering place for black workers—Soweto, where there is he largest long-distance bus terminus in Africa — the influx of migrant workers returning home appears here before and after Christmas.These returning migrant workers of today mainly consist of foreign workers and the local black workers in South Africa are no longer “migratory birds” but settled down in the city (even in a place called slums). The ” migrant tide” in the apartheid era bears great resemblance to what is seen in China today. Historically, the predecessor of “migrant workers”, levy labor, was even worse.
In this regard, China and South Africa have a very similar development trajectory, which is “levies labor —the permitted flow —freedom of employment and settlers”.Through democratization black laborers put an end to the second phase, and achieved freedom of employment and the right to settle down in the city, while China still is still in the stage of permitted flow. Before reform and opening policies were carried out in China, identity barriers and household registration forced the peasants to stay in the countryside. South Africa had implemented “whites urbanization” for a long period of time that ruthlessly excluded blacks from access to the urban system. In the 1921, accounting for more than 70% of the total population of South Africa, blacks made up for only 13% of the urban population.The notion that black people are “redneck/bumpkin” is deeply rooted among the South African authorities and the rest of society 2.
Dualism Dualism is often used by scholars to refer to the different treatment of blacks and whites in South Africa during apartheid. Yet in China, this phrase depicts the different treatment of the urban citizens and farmers in a dual structure. The term dualism, originally from economist WA Lewis and sociologist Boye Ke, has been widely used in many developing countries.
The apartheid system provides the mandatory cheap labor, and vast land resources for the economic development. In turn, the rapid development of the economy, as well as the economic power maintained and enhanced the apartheid regime. One of the keys to the Chinese economy miracle is that it is very difficult for anyone to bargain under the iron fist, reducing so-called “transaction costs” and avoiding troubles caused by democracy, welfare, and unionized farmers. This basically confirms the fact that the low-level human rights played a significant role in efforts to achieve high-speed economic development.Coincidentally, as the economy took off, the population proportions of the “black – white dualism” in South Africa and of the urban-rural dualism in China are both close to 1:4. In the early stage of Apartheid, due to severe discrimination, both relative and absolute value gap between the white and the black ? continuously expanded.
The peak was in the early 1970s. Since then, owing to resistance of the black and international pressure, the relative gap has been gradually narrowing. In China, both urban and rural residents’ income gap and urban workers and rural workers income gap also expanded significantly in the last 15 years.However, in contrast to the relatively reduced South African black-and-white gap, the income gap in China, either relatively or absolutely, has continued expanding. China’s urban society is more complex than the white-dominated South African society. During the years of the planned economy, the opposition between rich and poor was only implicit, and the distinction between urban and rural areas was the only and most prominent. But up to today, conflict between officials and the public represents the tension between the rich and the poor, and there are more noticeable differences between urban and rural.
. Ordered urbanization Initially this phrase refers to a phenomenon in which black labors moved to cities and were blamed for bringing epidemics and sexually transmitted diseases with them. This led to migration control proposals. However, gradually all urbanization ills such as slums, dirtiness and messiness, security problems, etc.
were all attributed to black migrants. As a result, South Africa implemented a series of severe control measures, for example, in “prevent illegal trespassing accounting method (PISA)” adopted in 1951, and black ghettos are deemed as “illegal squatters”.Contrary to the United States and other democratic countries that allow people into the city and establish residences, South Africa officials banished black people in the name of “keeping the city in order”.
Black people were allowed to go into the city and provide cheap labors during economic prosperity, whereas during slow economic times, they were expelled as “superfluous” and became a victim of orderly urbanization. In China, a similar concept called “illegal construction” has been seen.China and South Africa have regarded “migrant workers” as a group of people who have leeway, so their lack of jobs was not recognized as unemployment. They act as an urban economy regulator and a cushion for social welfare pressure, helping to free cities from economic crisis. Their work at young age lead to the economic prosperity of the city; and their return to countryside when they are aged leaves no vestige of chaos and the ensuing social welfare burden to the city. 4. Drive for economy There are two factors that are similar to China and contribute to the swift growth of the South Africa economy. Because the majority of the population (the blacks in South Africa, farmers in China) is weak in their consuming power, and South Africa and China had both encountered sluggish domestic demand, an export-oriented economy featuring foreign investment and external demand was fundamental to realizing development miracle of the two countries.
During the rapid growth, South Africa saw “double surplus” in trading and capital account, which was far above of GDP and gave way to skyscraping economy growth: a trade surplus of $ 143 million in 1950 surged to $ 7. 3 billion in 1980, and only after the crash of South African model it fell to $ 5. 348 billion in 1992. The capital account surplus in $ 215 million of 1965 grew to $ 2. 366 billion in 1982, yielding an average annual growth of 15. 2% in 17 years, and then a sharp decline followed the crisis of apartheid system and witnessed capital flight. Previously, South Africa, dependent from advantages of economic globalization plus low-level human rights, had become a country with the highest profit margins for investment in the world. The U.
S. nvestment in South Africa accomplished average profit margin of 18%, while similar investment in developed countries yielded 13% and in developing countries, only 14%. 40% of South Africa’s economic growth from 1957 to 1972 resulted mainly from foreign investment. What happened to China is very similar, with a typical example being that General Motors Corporation was losing money in the rest of the world, even in India factory,and only in China was GM profitable. McDonald’s business results in the United States were nowhere near those in China.As a result, in 1996, more than one-third of its foreign investment for Asia, Africa and Latin America went to China.
* The infrastructure construction in South Africa preceded its economic growth. Whereas the vast majority of democratic countries cannot copy the methods of South Africa, South Africa paved its way to economic success by taking advantage of low-level human rights and smooth access to occupy the land of the blacks. Chinese farmers and black South Africans dramatically facilitated primitive accumulation of capital and placed these two countries in the favorable conditions of the globalized market system.Under the iron-fisted controlling regimen and lack of trade unions as well, Chinese farmers and South African farmers are unable to negotiate, but hard working and obedient to low wages and low welfare constitute the best investment environment. While major industrialized countries have already passed the primitive accumulation phase and embraced high tax & benefits and powerful unions, South Africa and China are in a favorable position to attract a great deal of capital investment and manufacturing production, turning South Africa into the factory of Africa and China into the factory of the world.
Stimulated by abrupt economic rise, South Africa encountered the best condition for ?? the infrastructure construction. Compared to the developed countries, South Africa has a relatively low per capita car ownership, but its highway construction took the lead in most of the developed world. In the 1980s, its highway mileage was behind only the United States, and Germany. This is very similar to what is happening in China where car ownership rate is also relatively modest, but its highway system already ranks second in the world.
Many compare China’s success in building its infrastructure to the lack of success of India. It is clear that a key factor in China’s success is it authoritarian rule and ability to take land when needed, whereas India does not have this same system. B.
With specific regard to South Africa (acknowledging a limited information and experience base), what impact does overall context (cultural, socio-economic, political, etc. ) have on labor relations and human resource management? What specific examples would you cite?What advice would you give to your employer if they were going to expand into South Africa? Influences on Current State of Labor Relations and Human Resources The current state of Labor Relations and Human Resources is codified in the Labor Relations Act, 1995, and then further amended. In the Act, it specifically enumerates certain rights, including the rights of labor unions, right to participate in workplace decision-making, collective bargaining and right to strike, among others.This act was one of many reforms that directly and indirectly resulted from the countrywide suffrage implemented in 1994. This Act, and others affecting labor relations, were applicable to all, without respect to race or other minority status. Many of the established rights and practices were similar to those used in Europe, which placed greater importance on labor participation and less on market influence.
A relatively new feature of the labor relations system was the establishment of fora to promote establishment of employee participation in decision making.The Act named specific areas under which the employee forum must be consulted, including restructuring, plant closures, ownership changes, criteria for merit increases, product development plans and others. Consultation was defined to give the employee forum significant input on any of the above matters.
While the fora could not prevent implementation of the management changes, the Act required efforts by both parties to seek consensus, and in the absence of such consensus, use other dispute resolution mechanisms available.When considering the labor relations system in place today in South Africa, it is immediately apparent that it has been informed by various political, cultural and socio-economic factors. These factors arise from the codified system of apartheid that was in place before the current system based on universal suffrage and constitution that provides basic protections to the entire population. 1. Political Influence During apartheid there were laws in place that provided a system for the oppression of non-whites. These laws varied from limiting the places where people could live to specifically reserving different classes of jobs to whites.These restrictions were found in several different laws enacted by the National Party government.
In addition to the restrictions noted, there were also restrictions on trade union activities, which limited the ability for non-whites to participate in labor actions, including strikes. The end of apartheid was brought about by many factors, both internal and external. A key factor was the actions of labor unions and widespread use of strikes during the 1980’s. Also, the labor unions were heavily politicized and often worked in concert with the important African National Congress (ANC).Since apartheid limited labors rights and labor played a role in bringing about the end of apartheid, labor also played a large role in the establishment of the post-apartheid systems, including its labor relations system. One of the key goals in establishing the new system was to strengthen the rights of labor, both related to taking labor actions such as strikes, but also greater rights in the day-to-day decision making. It seems that the intent of this new system was to prevent the abuses of the past as well as to ensure greater protections for labor.
This is why a more market-based approach to labor as seen in the US and UK was rejected in favor of a more collaborative system based on European models. One of the results of this would have been greater job security and a greater impact in overall working conditions. 2. Other Factors It is obvious that political factors, primarily the strong link between the labor unions and the ANC, played a large role in establishing the human resources systems in place in South Africa today. But, of course, other factors contributed to the current system, including socio-economic considerations.South Africa has been, and continues to be, a country with a large gap between the rich and the poor. The apartheid system was one of the prime contributors to this gap by limiting access to jobs, taking land and relegating the blacks to sub-standard health care, education and other basic services. As the apartheid system was a key enabler of this income disparity, the end of apartheid brought the hope and desire to close the gap between the rich and the poor.
As such, one of the stated goals was captured in the ANC motto – ‘a better life for all’.It was envisioned that there would be better access to the basic services mentioned above. Further, the constitution included specific rights that guaranteed everyone had the right to “…health care services…sufficient food and water…social security…” as well as the right to “…basic education…” The desire to address the income inequality led to some of the protections as seen in the Constitution, including labor protections. One of the reasons for these was the desire to give blacks opportunities for education and jobs that would allow them to grow out of poverty.Many of the labor protections would have the apparent affect of protecting employees and giving greater opportunities to earn a decent living. Opening of jobs to blacks, while just from a racial justice standpoint, has created a new class of those on the inside versus those on the outside. Those on the inside are those with jobs, who are protected by labor laws, and those on the outside are those without jobs. This results from the fact that it is difficult to remove workers, and therefore employers are reluctant to add to the workforce, which limits employment growth.
For many reasons, including those above, the promise of the end of apartheid to address socio-economic gaps via a modernized labor relations system has not materialized. Unemployment is higher than it was during apartheid, and there has been little progress in reducing income inequality. Again, there are many reasons for this, but it does seem that the current labor system plays some role. Many, including the ANC, have recognized this and as a result, there have been efforts to reform the labor system (ANC Conference, 1995). Advices for Employers who want to invest in SAIf a company were to establish operations in South Africa, it would need to recognize the relative power that labor unions enjoy.
One of the practical aspects of this is that management’s ability to arbitrarily implement changes would be limited and there is both the expectation and requirement that there be collaboration with the labor union through the employee forum. For those companies that have experience and operations in Western Europe, in particular Germany and France, they would be well advised to look to those operations to understand what the working relationship with the labor unions will be.Additionally, the requirement of consultation with the labor unions may have the impact of reducing flexibility and responsiveness to changing conditions, which will then imply greater consideration prior to hiring new employees and potentially expanding. Employers need to be careful not to suggest a causal relationship, since the end of apartheid has not brought about a better economic environment for labor in general, and non-whites in particular.
Between 1995 and 2005 unemployment increased from 15. 6% to 26. 7%. While many factors contribute to this, it seems clear that two significant reasons are the large increase in he workforce due to greater participation since the end of apartheid, as well as the decrease in non-skilled employment.
With this in mind, it is apparent that there is a need for change and labor may have an opportunity to shape the future, in much the same way they shaped the post-apartheid system. With more emphasis on training programs and less on traditional labor issues like job security, there may be an opportunity to institute structural change that allows the South African economy to grow and increase employment. Reference * http://www. 1000ventures. com/business_guide/crosscuttings/change_management. tml * Kotter, John P. and Cohen, Den S. The Heart of Change.
Boston: Harvard Business School Press * http://doc. mbalib. com/view/1c2da7f0c9dca8a6e5c89a6461598364. html * John Hayes The Theory and Practice of Change Management (3rd Edition, 2010). * www. explorehr.
org * Transformation Challenges in the South African Workplace: A Conversation with Melissa Steyn of iNCUDISA—-Terri Grant * HR Transformation: Building Human Resources from the Outside In, with Justin Allen, Wayne Brockbank, Jon Younger, and Mark Nyman, 2009 (ISBN 9780071638708). * http:// www1. outhafrica. net/Cultures/sv-SE/consumer. southafrica. net/Why+South+Africa/Best+of+SA/Experiences/Soweto. htm * http://www.
atns. net. au/agreement. asp? EntityID=3980 * PUN Ngai? C. Smith, Putting Transnational Labor Process in Its Place: the Dormitory Labor Regime in Post-socialist China. Work, Employment and Society, 21: 1 (March 2007) * http://www. china-review. com/gao.
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