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Management of change in organizations has been one of the most important concerns of professionals in the recent times. This paper provides an understanding of human resource management (HRM) practices for organizational change, explores the development of HRM in the organizational culture context, and provides some disciplines for business that wish to develop an in-depth knowledge of organizational change. Mainland China's economy has developed very fast and has a huge domestic market. Many of Taiwan's companies have invested in China, which has caused a lot of organizational change. With the rapid rise of organizational change in Taiwan, understanding the dynamics of change is most frequently confronted with questions, such as what is the concept of change? How to decide what to change, and then how to change it? Is implementation of change always painful? What one needs to keep in mind while implementing changes in organization? [PUBLICATION ABSTRACT]

INTRODUCTION

The Human Resource Development (HRD) issues and challenges for employers and their organizations in the world and in Taiwan play an important role in business success. HRD, in an integrated sense, also encompasses health care, nutrition, population policies and employment. This paper covers the development of people through education and training in a national context as well as within enterprises and will conclude with a reiteration of the importance of HRD to enterprises and countries..

Taiwan's remarkable economic transformation in the last 30 years has been, to a large extent, due to its capacity to leverage markets to achieve economic performance far beyond its production possibilities. Such sterling economic performance was the result of far-sighted policymakers in managing and optimizing the emerging external environment and existing domestic resources. As a result, Taiwan has been one of the most favored areas in Asia for investment by transnational corporations. Several recent major events that occurred in the global and regional environment have had serious long-term implications for Taiwan's economic viability and performance. First, the Asian financial crisis in 1997 devastated the financial and real sectors of many Southeast Asian economies that serve as Taiwan's hinterland for resources and market. As a regional hub, Taiwan cannot prosper as long as the regional hinterland remains economically weak and socially and politically unstable. Taiwan needs prosperous and dynamic Southeast Asian economies to complement it in an environment of competitive regional clustering.

The second major external change is the accelerating market liberalization and borderless nature of the global economy. The global marketplace has become strikingly more competitive and more complex as a result of the relentless process of global production networking. The new global economic structure, widely known as the New Economy, is the product of three main elements: information technology, changes in government policy, and corporate restructuring.

Information technology is an important element shaping the contours of the global economy and contributing to the shortening of the product cycle and rapid changes in the comparative and competitive advantages of trading nations. The shift to information technology as the basis for industrial production is forcing a change in industrial organization. The comparative advantage of many industrial economies, including that of Taiwan, is affected by this new configuration of industrial location. Differences hi the adaptability of East Asian economies to these external changes are disturbing the pattern and distribution of industrial locations in East Asia.

The third major external factor is the world's relationship with China. When China was accepted to the WTO, Asian countries were alarmed by the prospect of head-to-head competition for trade and investment with China. It is expected that China's economic competitiveness will continue to increase against Taiwan export products, especially in labor-intensive and mid-range industrial outputs.

This study could contribute to and progress towards greater organizational effectiveness through making efforts to find answers to HRD and organizational change questions in Taiwan that have resulted from these three major factors. It helps businesses to develop the understanding, knowledge and skills necessary to build an effective HRD model, which is particularly appropriate for any organization in change. The paper also highlights some of the important issues involved in the management of organizational change, organizational culture change and conflict management which warrant further empirical and theoretical development.

History of HRD in Taiwan

According to Lee (2002), the development of Taiwan's human resources can be divided into four distinct periods. The first period can be traced back to the 1930s and 1940s, when Taiwan was still under Japanese occupation. During this period, the Taiwan government's economic development plan had already accomplished its aim of developing its human resources to a primary-school level, which is needed for the first stage of economic development. By the fourth period, Taiwan's workforce was still behind world-class levels partly because of the small number of colleges and universities on the island and partly because a large share of college and university graduates went to United States or Canadian or European universities for their studies; then, once they completed their study, a very large percentage of them remained and worked in the countries that had provided them with their advanced training. However, beginning in the mid-1980s more and more of these highly trained workforces started to return to Taiwan and helped to develop the high-tech industries.

The rapid expansion of Taiwan's college-educated workforce came as a response to Taiwan's development of high-tech industries and to the recent development of a knowledge-based economy. One important feature of Taiwan college education is the higher concentration of students in the fields of engineering and business administration, with only a small proportion in the humanities.

Thus far, the supply of and demand for different types of human resources at different stages of Taiwan's development have matched well. Although the improvement in the quality of Taiwan's workforce was obvious across all occupations, the most rapid improvement was in the professional, administrative, sales/services and production categories. In 1965, for example, only 18 percent of males engaging in professional occupations were educated to the college level or better, but by 2000, close to 90 percent of professionals had a college-level education. None of the males in administrative occupations had any college education in 1965, but by 2000, more than half of this group had been educated to at least the college level. The rapid expansion of college-trained workers in production work suggests that increasing numbers of these workers are no longer working on assembly lines, but are becoming highly skilled workers and technicians engaged in roles where independent judgment and problem-solving abilities are necessary.

New Age for Knowledge-Based Economy (KBE)

From these different stages of development, Taiwan's economy is already a knowledge-based economy, which requires a workforce that is characterized not only by a large proportion's having attained higher level of education, but by workers who must be innovative and creative. If Taiwan is to create such a workforce, the current HRD and higher education paradigm must be transformed completely. Rather than providing workers with a certain level of skills and knowledge, the new paradigm for HRD must be to change the attitude of workers and employees from being passive learners and passive human capital accumulators, to acting as human capital investors.

In a knowledge-based economy, knowledge, skills and abilities must constantly be updated in order to remain creative and innovative in the ever-changing world, so it is impossible for anyone to design a program that can be described as best suiting any particular person or even group of people. An individual must establish what type of work he wishes to engage in, and decide whether he has the talent that will enable him to achieve this particular career goal. He must then establish what type of knowledge, skills and behavior are needed in order to enhance his specific human capital; put in the time and effort to acquire the knowledge, skills and appropriate behavior; then learn to apply this acquired human capital to his job. In short, in a knowledge-based economy, all employees must change from being passive learners, waiting for instructors or employers to guide them towards relevant learning and to demonstrate how they must learn, to actively searching for the appropriate types of knowledge, skills and behavior that are required for them to perform well and effectively at their specific jobs.

In a knowledge-based economy, there is a growing need for diversified knowledge workers; thus, organizational training also has to be diversified; therefore, in order to develop diversified knowledge workers, an organization must change its training content. Although HRD was capable of meeting the rising demand for human resources at the earlier stages of Taiwan's economic development, these same mechanisms are now inadequate in meeting the needs of Taiwan's human resources as the country prepares itself to enter the knowledge-based economy stage.

HRD TREND IN TAIWAN

Globalization

The ways in which global and regional trends affect HRD in Taiwan very apparent. One major trend with implications for HRD is globalization, which is fostered not only by technological change and the continually falling costs of communication and transport but also by the decisions of developing countries in Taiwan and elsewhere to embrace market-oriented development strategies and to open their countries increasingly to the world economy. The world is fast becoming one interdependent global market place.

Competitiveness between both nations and enterprises will be international; worldwide competition has increased, the pace of economic change has accelerated and the process of development has become less predictable. Competitiveness will be decided on a country's or an enterprise's capacity to add value to global economic products services and processes (Reich 1991). The education and skills of the workforce will be the key competitive weapon for organizations.

Compared to the past, enterprises will need to update much more regularly the skills mix of their employees to respond to the opportunities or threats created by globalization and rapid technological change. Indeed, intense global competition reconfiguring the marketplace often and quickly, and enterprises must differentiate themselves from their competitors by the quality of the human systems and processes behind their products and services. The attitudes, knowledge and skills of the enterprise's workforce, contractors and suppliers will determine the quality of the human system and processes behind its products and services. Competition will be less and less in terms of how the features and benefits of one's product/services compare with those of another as more products are perceived to be at parity by customers, and more and more in terms of the quality of human resources.

Economic Restructuring

Economic restructuring by countries with changing comparative advantage will be another trend. Enterprises will restructure regularly in the increasingly competitive marketplace as they seek to secure a competitive edge over their rivals. Thus, as Taiwan moves from product manufacturing to high-tech manufacturing, it will compete with the U.S. and European countries, which will have to adjust by moving into high-technology manufacturing. Such restructuring will necessitate changes in education and training both at macro and enterprise levels.

Cross-Border Asian Investments

Yet another trend is cross-border investments by Asian enterprises in other countries in Asia and in Africa, Latin America, Europe and the United States. The Asia and Pacific region has seen waves of investment by Japanese, American and European companies-as well as investments by the four Asian "dragon" economies of Hong Kong, South Korea, Taiwan and Singapore-pushed by labor shortages, rising wages and stronger exchange rates. see Table 2 for direct foreign investments by the NIEs in the 1980s. Since 1992, Singapore has pushed regional investments strongly so as to develop an external wing to its economy.

This trend will mean that Taiwanese enterprises will need cross-border expertise to operate efficiently in countries with different political systems, languages and cultures. Asian companies will need to develop appropriate policies and procedures to select, prepare and repatriate executives (and their families) who are sent to manage overseas joint-venture subsidiaries. Executives need to understand the political, social and cultural situation of the country they will be operating in and will need skills in managing a multicultural workforce. As international alliances become a competitive necessity, executives will also need to be trained to make such collaboration successful. The success of such international alliances requires skills in managing the people-related issues involved with joining two enterprises, each with its own culture and operating systems and procedures. When mergers between companies in the same country often fail, the challenges in combining companies from different countries are intense.

Changing Organizational Structures/Work Patterns

Changing organizational structures and work patterns are another trend. The small core of professionals, technicians and managers will need to be the focus for HRD, but more investment in the management and training of part-time and temporary workers will also be required to meet the challenges of these changes.

Technological changes, especially in information technology and telecommunications, and competition in the fast-moving competitive global marketplace have changed work organizations and working patterns. The productions of goods and services has become flexible and customized instead of mass-produced in long production lines. Fixed automation involving repetitive tasks is being replaced by flexible automation. On-line quality control has replaced end-of-line checking. Instead of fragmentation of tasks, increasing use is made of teams and multi-skilled workers. Decision-making is being decentralized to points of production and sale, and the organizational hierarchy is flatter with middle layers of management eliminated. As a result of these changes in working patterns, the role of workers has broadened and, consequently, requires a wider range of skills.

One impact on work patterns that is emerging is relationship organizations or virtual corporations as the workforce becomes more mobile in response to changing organizational structures. A virtual corporation is an organization which uses information technology to link various independent companies, suppliers, customers and even competitors to share skills, costs and access to one another's markets. The virtual organization has a very small core with many resources supported from the outside, but without a physical set up. Virtual offices are emerging as companies leverage cyberspace and electronic technology to cut bricks-and-mortar costs and to boost productivity. In such virtual offices, workers retain contact through high-technology electronics, including hand-held devices that can receive and send e-mail and faxes. By telecommuting from the home (or just about anywhere), workers stay in contact with the virtual organization, wherever its participants may be.

The development of virtual organizations has HRD implications. These kinds of corporations need workers who are highly skilled, reliable and educated, able to understand the new forms of information, adaptable and able to work efficiently with others without face-to-face contact. Employees need not just technical skills but also the skill to learning how to learn to cope with continuous and radical changes in business techniques and practices. New forms of training which are flexible, on demand and interactive will have to be devised for employees of virtual enterprises. These work pattern changes are already taking place in the industrialized world and are increasingly affecting enterprises in Taiwan. HRD policies and programs will have to change in response to these changes.

Rapid Knowledge Obsolescence

The exponential growth of knowledge and the rapid change of science and technology is another global trend. Knowledge is doubling every 7-10 years, and the resultant rapid obsolescence of knowledge and skills has implications for HRD. The rapid rate of accumulation of new knowledge and the fast pace of technological change will mean a need for regular updating and upgrading of knowledge and skills. More frequent job changes will become the norm, and schools and other education and training institutions will have to teach the ability to learn and inculcate the acceptance of life-long education and training in order for workers to become mentally mobile and flexible. Continuing education and training programs will have to be developed by not only education and training institutions but also HRD departments of enterprises and professional organizations.

Structural changes in the Taiwan Economy

Changes in the external environment and the 1997-98 regional crisis heightened Taiwan's awareness that it had lost its competitiveness against other economies in the region, where currencies had devalued sharply. Cost-cutting measures in existing industries would only keep Taiwan competitive in the short-run. Upgrading was hampered by Taiwan's lack of skills, as well as its lack of a technology base and other capabilities of developed economies. Taiwan must develop these capabilities and tap new sources of growth to maintain its competitive edge in an environment of intensified competition and technological change.

Taiwan's economy is faced with the challenges to transform itself into a knowledge-based economy (KBE). To become a KBE, Taiwan will need human and intellectual capital to absorb, process and apply knowledge in order to create a strong technological and entrepreneurial culture. Realizing this vision will requires a quantum leap in capabilities the pace and extent of which, for a small and open economy such as that of Taiwan, could be destabilizing to the domestic economy if it is not managed properly and judiciously. Therefore, domestic constraints on growth and a rapidly changing external environment have forced Taiwan, a small and highly open city-state, to restructure its economy more frequently and more quickly than have larger and less open economies. Sources of growth come increasingly from knowledge-based economic activities such as research and development, innovation, product and service design, process, and marketing in the real and financial sectors for the domestic, regional and global marketplace. At the same time, rapid and large changes in the process of creating and producing income and output necessitates equally large changes in the labor market, social safety nets, the role of government, government-linked companies (GLCs) and small and medium enterprises (SMEs). To achieve those objectives, the Taiwan government established the Committee on Taiwan Competitiveness to assess Taiwan's economic competitiveness over the next 10 years and to recommend strategies and policies. The Competitive Report released in 1998 contained both short-term measures aimed at recovery from the recession, and measures intended to transform Taiwan into an advanced and globally competitive knowledge-based economy. The Report recommended specific plans for key sectors-including manufacturing, finance, and telecommunication-to improve Taiwan's ability to compete in the global marketplace.

The Competitiveness Report's recommendations on how to improve Taiwan's science, technology and innovation position included: focusing R&D on areas where Taiwan has already demonstrated reasonable capability and that have eventual economic relevance; targeting R&D funding to ensure continual increases in industry's competitive capabilities, as well as to limit government's role in providing co-financing and tax incentives and grants; deepening the technological capabilities of local universities in upstream and strategic research; making capabilities developed in universities and research institutes available to the private sector through industry assistance schemes to enable local enterprise to upgrade their technological level; setting up spin-off companies to commercialize new technologies and innovation continuing to secure technology transfer through linkages with global technology centers while pursuing indigenous technology development; enhancing R&D manpower through joint collaboration with overseas research programs and a mechanism to attach potential technopreneurs in business development units of MNCs abroad; creating an environment conducive to intelligent risk-taking and entrepreneurship, including acceptance of failure as a learning process to nurture creativity and innovation.

CONCLUSION

The government has actively supported management training at the national level, although training and development programs in companies have mixed results, largely because trained workers are poached by other companies. Still, training is still more likely to be focused on short-term needs rather than long-term employee development. FIEs would like to hire more Chinese nationals into higher management jobs because of their communication skills, local contacts, and understanding of local markets. However, foreign managers complain that Chinese managers lack decision-making skills and individual initiative, and companies frequently feel these managers must try to develop these management skills in locals before giving them executive responsibilities (Zhu, 1999).

A decline in the quality of higher education. During the last several years, although the number of college students has risen rapidly, the quality of college education has been declining. This is due in part to the educational budget's failure to increase at the same rate as the number of students and in part to the lack of qualified professors to meet the rapid expansion in the number of colleges and universities. For example, in 1976 the teacher-student ratio for the public universities was 1:9.85; it declined to 1: 9.61 in 1981, but rose to 1:11.17 in 1996, 1:13.18 in 1999 and 1: 13.92 in 2000. For private colleges and universities, the picture is even worse: In 1976 the teacher-student ratio was 1:18.56 and increased to 1:19.81 in 1981, 1:21.29 in 1996, 1:24.82 in 1999 and 1:24.86 in 2000.

The shortage of qualified personnel in the key areas. There is an ongoing need to attract specialists in many fields, including the important areas of project management and the management of large-scale science research projects. The increasing gap between the actual and required curriculum. Many of those in academia capable of achieving college professor positions, have never held jobs in the major industries; therefore, there is a growing gap between what is taught in classrooms of colleges and universities and what is actually needed by industry.

The inability to attract high-level overseas Chinese professionals to return to Taiwan. For many years, there have been a large number of Taiwanese students studying abroad, particularly in the United States and Canada. Many of these, who are now well qualified scientists working in the United States, are urgently needed by industries and research institutes in Taiwan. However, Taiwan is currently unable to induce these people to leave their current positions in the U.S. and Europe and take up similar positions back in Taiwan, partly because of the chaotic political environment in Taiwan and partly because of the rapidly economic development in Mainland China where the potential of personal development is much larger.

The lack of encouragement for creative work. The current HRD system is unable to train people to the levels of creativity that are urgently needed in Taiwan's pursuit of a knowledge-based economy. Lack of interdisciplinary studies and joint research. Taiwan's government budgeting system that discourages scholars from engaging interdisciplinary studies and joint research projects, so new breakthroughs in research work are rare. The lack of economies of scale. Most of Taiwan's colleges and universities are too small to achieve economies of scale. There are only nine universities in Taiwan today that can boast a student body in excess of 15,000. When Taiwan's economy moves towards a knowledge-based economy, it is no longer the role of the government and of training institutions to prescribe the "right" type of training; instead, they should concentrate their efforts on establishing a favorable environment so workers can determine the best way to invest their human capital in such a way that they can receive the highest return on their investment of time and energy.

Taiwan is in the midst of a major reworking of its economy, with a view to transform its economy within 10-15 years to that of a knowledge-based economy. Major external changes in the region and in the world accelerate the magnitude and pace of the need for structural changes. In revitalizing and re-making the Taiwan economy and upgrading its industrial structure, the government is redefining and reordering the strategic role of the government and the public sector. Under this new broad policy framework, the new sources of growth must come from the private sector, with an enhanced role for domestic small and medium enterprises and in collaboration and partnership with the government in facilitating the development of domestic technopreneurs. Multinational companies continue to be a vital element in the process of economic and industrial upgrading, but it is envisioned that within 15-20 years the domestic technopreneurs would be equally important drivers of growth.

In order to dispose of these deficiencies, the Ministry of Education recently announced a number of countering policies, as follows:

1. Raising the number and quality of researchers.

The government has announced that over the next four years it intends to raise the ratio of college-trained research follows within the population to 360 per 100,000 persons. The government has also announced its intention of increasing the proportion of research fellows with at least an MA degree to 60 percent. Over a ten-year period, the government aims to increase the proportion of college-trained research fellows to 450 per 100,000 persons, with 65 percent of all research fellows having at least a master's degree.

2. Enhancing science and technology education.

This will involve encouraging college students to engage in interdisciplinary studies in order to widen academic knowledge, and research fellows to engage in interdisciplinary research in order to benefit industry.

3. Revising the current income tax system for the purpose of encouraging lifelong studies.

A bill in the Executive Yuan proposes is to remove recurrent and lifelong educational expenses from taxable income.

4. Boosting part-time and recurrent education opportunities.

The government aims to encourage colleges and universities to offer special programs which will eventually lead to a college degree or a certificate for part-time students studying during evenings and at weekends. This will help full-time employees to gain access to continuing education.

5. Improving foreign language capabilities.

Boosting the language abilities of college students, faculty members and research fellows will facilitate cooperation in large-scale international research. In fact, several universities have already announced that students must meet a certain level of proficiency in English before they can receive their BA or MA degrees. Other universities are demanding greater intemationalization of each department's curriculum through offering a certain proportion of their courses in English.

6. Encouraging exchange research.

The government wants to encourage cooperation between research fellows and teaching staff in universities and businesses, in an attempt to bridge the knowledge gap between industry and academic institutions. The issue of industrial upgrading is closely linked with the broader issue of re-making Taiwan. Without changing the overall basic policy structure, initiating a sustained, vibrant and developed industrial structure consistent with its employment structure and very high-income level will not be possible. The nature and structures of official restructuring committees and task forces reflect a broad-based input from the private sector, professionals and academia to create synergies among planners, implementers and constituents. The forward-looking and strategic nature of the planning is a reflection of the high quality of the Taiwan's political leadership. Judging from its track record, Taiwan will continue to leverage external resources and external markets to achieve its economic objective of becoming a knowledge-based economy and changing its industrial structure to meet global challenges in the next decade.