Finance

" Mr Mao has slashed the company's bloated work force by 18% since taking over, without angering labour unions." With reference to the phrase quoted from case study, it has supported that Chairman Mao had referent power over the government.

Chairman Mao created vision for the company and communicate effectively with his team. He made an effort to communicate with every staffs in corporation through emails. Mao Chi-Kwan also possessed expert power as he had the knowledge to project Chunghwa as a competitive competitor in the market by creating customers' value through products and services. Followed by convincing the market, Chunghwa Telecom could create shareholder value. It was only after these two goals have been accomplished then the company could emphasised on employee value. Chairman Mao was also very willing to share his knowledge with his colleagues and viewed himself as a coach. (Source from Taipei Times, Oct 08, 2001)

Whilst government had legitimate power over Chairman Mao, they make decisions of privatization timetable and on the pricing of the Initial Public Offer. The government had strong influence over the government shared company; employee should not be forced to leave. Chairman and CEO are still appointed by the government. Despite the strong influence of government, Chunghwa devised corporate strategy that employees had to make a choice: between early retirement and adapting themselves to new corporate culture. These were good solutions to employee work force by 15 percent. (Source from Telecom Asia, Oct, 2002)

Clearly, Chairman Mao had more power than the government as he had managed to reduce the company workforce by asking workers to retired voluntarily without any strike. This had evidently proved that the government despite have legitimate power was less influential than Mao chi Kwan

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