Shanghai Euclid Printing Machine Co.: Navigating through Layoffs and Closure
(5 pages of text)
Case (Gen Exp)
In late 2012, Shanghai Euclid Printing Machine Co. (Shanghai Euclid), a joint venture between a Chinese state-owned enterprise and an American multinational enterprise, was in the process of closing down. Established in December 1993, the joint venture had experienced successive rounds of downsizing over the past 18 years, dropping from an original high of 1,800 employees to a workforce size of 668 in 2012. In its place, a 100-per-cent state-owned enterprise would now be founded, and any employees and business activities that would be retained needed to be moved to this new enterprise, Shanghai Gutenberg Printing Machine Co. (Shanghai Gutenberg). The general manager at Shanghai Euclid had to make some difficult decisions about the strategic orientation of Shanghai Gutenberg. He also needed to come up with a plan regarding the remaining 668 employees, deciding whom he could retain and who would need to be laid off. Considering the importance of social harmony in the Chinese context, he also needed to determine how to conduct the workforce change process in order to cause the least possible disruption to employees and other stakeholders.
This case can be used in an undergraduate- or graduate-level course on international strategic management or human resource management. It explores how to navigate through layoffs and closure in a way that minimizes disruption, especially in non-Western contexts. It allows students to identify the factors that led to the situation, consider stakeholders and their interactions, and describe a value-based philosophy to guide the implementation of workforce change. After working through the case and assignment questions, students will have developed their ability to do the following:
- Identify the factors that lead an international manufacturing joint venture in China to face downsizing and restructuring.
- Identify the various stakeholders affected by such a scenario, and describe the relationships and interactions among them.
- Describe the national and organizational cultures that might inform a philosophy guiding a restructuring process.
- Outline criteria, priorities, and a process for making decisions regarding downsizing and closure and for communicating these decisions.
China, Large, 2012
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