CANAAN GROUP: RESHAPING THE ECS DIVISION

Question 1: Why did Patrick Lo change the way the ECS team operated, starting in Jan 2014? Do you
agree with this initial strategy?

As we have seen in the case over the past 2 years the shipping industry had faced significant
disruption which was due to excess shipping capacity and a fall in demand for shipping.

Canaan group had 3 main divisions in the ECS division I.E sales, booking and documentations each
group focused on one task each, I.E getting clients, handling all the booking and handling all the
shipping related problems and finally documenting all the necessary documents needed for the transfer
of goods respectively.

During the great recession many business cut on non-core operations so freight forwarders had to
perform more of this services like documentation for their clients, the documentation team was
overwhelmed by this additional work. Due to this Patrick lo decided to set up a three-person office in
Taiwan in 2013 and by shifted more documentation to Taiwan he freed up resources in Vancouver.

As clients were assigned to booking staff and each staff covered multiple clients with no overlap we
saw that whenever a staff needed a vacation or called in sick there was a shortage of resources and
ECS manager had to rely on emails from the person who was not in the office causing a lot of
problems. Staff had to work overtime and come in on weekends.

Because of the 2 reasons mentioned above recession and shortage of resources at times Lo decided to
change the way of how ECS operated.

Personally I do not agree with his initial strategy for the following reasons

• There was no input or say of the staff in this regard, there is only downward communication.
• People were hired for a specific job and had a specific set of skills to compliment that job, we do
not know how many of them were willing to learn new skills.
• We also have to account for the motivation loss in employees as there is a high chance that
a person working in documentation could have no interest to work in booking and vice
versa.
• He did not use the right resource for the right job.
• The characteristics needed for booking included being a people’s person or an extrovert but most
of the people in documentation lacked this and most people in booking lacked the detail oriented
work skill needed for documentation.
• The salary hike for the documentation team left a bitter taste in the booking teams mouth further
reducing team work and creating a work environment with high levels of resentment and tension.
• The strategy was completely counter-productive. Clients were not happy with the way the
documentation team handled the booking situations due to their lack of skills and there
were many clerical errors due to the booking team.

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