CINCO: Challenging Traditions and Charting Reform (A)

CINCO (A) With China’s entry into the World Trade Organisation (WTO), one of the country’s largest insurance companies and state-owned enterprise—CINCO (Chinese Insurance Corporation)—finds itself threatened by a flood of new and sophisticated foreign competitors. Challenges to implementing internal changes, however, are proving just as great as those in the external marketplace. This case highlights the sources of complexity underlying the key cultural problems and human resource constraints faced by the General Manager of one of CINCO’s largest branches as he tries to prepare his company for the new competitive environment.

By placing students in the role of a Chinese manager in a large, leading state-owned enterprise, they are able to analyze the internal constraints and sources of inertia in the face of obvious external pressures for change, such as entry into WTO. It provides a basis for discussing elements of culture and tradition, both in SOEs and more generally Chinese society, and changes in both. Students are then able to discuss the viability of various options for introducing change within this particular social and organizational context. CINCO (B) Within one month of China�s entry into the WTO, CINCO announced a major corporate restructuring program to transform the group into a shareholding company and open its doors to foreign investors. This case describes the features of the structure and operating systems that have become sources of conflict between rival subsidiaries and functions within subsidiaries. CINCO�s managers must implement changes that eliminate such conflict in order to survive in the increasingly competitive Chinese insurance market. Pedagogical Objectives: The case introduces students to current and emerging management issues through an analysis of inappropriate organizational design that is the source of inconsistent customer service and internal conflict between and within sub-branches at this Chinese SOE. It challenges students to propose changes that align the organization with the new competitive environment and increased performance demands.