DOCSLIB.ORG

Leadership, Management and Change in a Chinese Public-Owned Corporation: the Case of Haier from 1984-2013

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Leadership, Management and Change in a Chinese Public-Owned Corporation: the Case of Haier from 1984-2013 Leadership, Management and Change in a Chinese Public-Owned Corporation: The Case of Haier from 1984-2013 Xiaoran Sun A thesis in fulfilment of the requirements for the degree of Doctor of Philosophy School of Business University of New South Wales Canberra, Australia August 2013 Table of contents Table of contents ................................................................................................................................... i Acknowledgements ............................................................................................................................. iv Abstract ............................................................................................................................................... vi Acronyms .......................................................................................................................................... viii List of Figures ...................................................................................................................................... x List of Tables ........................................................................................................................................ x List of Appendices ................................................................................................................................ x Chapter One Introduction ..................................................................................................................... 1 1.1 Aims and Objectives................................................................................................................... 1 1.2 The Case of Haier ....................................................................................................................... 1 1.3 The Research Problem................................................................................................................ 3 1.3.1 Primary data collection: ...................................................................................................... 4 1.3.2 Secondary data collection:................................................................................................... 7 1.3.3 Tertiary data collection ........................................................................................................ 7 1.3.4 Data analysis ....................................................................................................................... 7 1.4 Chapter Structure and Integration ............................................................................................ 10 Chapter Two Literature Review ......................................................................................................... 16 2.1 Introduction .............................................................................................................................. 16 2.2 Leadership and Change ............................................................................................................ 16 2.3 The Role of the Environment in Organisational Theories ........................................................ 26 2.4 The Influence of Culture .......................................................................................................... 27 2.5 Total Quality Management Theories and Dissemination ......................................................... 31 2.5.1 Definition of TQM ............................................................................................................ 33 2.5.2 TQM models ..................................................................................................................... 34 2.6 Implementing Business Process Reengineering ....................................................................... 38 2.6.1 The definition and goals of BPR ....................................................................................... 39 2.6.2 The spread of BPR ............................................................................................................ 43 2.7 The Influence of Management Fashions .................................................................................. 44 2.8 Globalisation and the Development of a Global Mindset ........................................................ 48 2.9 Conclusion: Gaps in the Literature and the Focus of this Research ......................................... 53 Chapter Three China‘s Open Door Policy: The Economic and Industrial Context from 1978-2013 . 55 3.1 Introduction .............................................................................................................................. 55 3.2 A Centralised Socialist Economy Before 1978 ........................................................................ 56 3.3 Economic Reform in China Since 1978 ................................................................................... 60 3.3.1 1978 to 1992: the first stage of China‘s opening-up and economic reform....................... 61 3.3.2 1992-2001 The establishment of a socialist market economy ........................................... 70 i 3.3.3 2001: Joining the WTO and participation in the world economy ..................................... 78 3.4 The Development history of the Chinese Home Appliance Industry........................................ 80 3.4.1 1978-1982: initial stage .................................................................................................... 80 3.4.2 1983-1990: the stage of rapid development ....................................................................... 82 3.4.3 1990-2001: the outbreak of a price war and industrial restructuring ................................. 85 3.4.4 2001: joining the global market ......................................................................................... 90 3.5 Conclusion ................................................................................................................................ 92 Chapter Four The Emergence of Zhang Ruimin as a Charismatic Leader ......................................... 94 4.1 Introduction .............................................................................................................................. 94 4.2 The Early Life Experience of Zhang Ruimin............................................................................ 95 4.3 A Turning Point: The Assignment of Zhang Ruimin as the Director of Qingdao Refrigerator General Factory .............................................................................................................................. 96 4.4 Zhang Ruimin‘s Leadership Style........................................................................................... 104 4.4.1 Charm and charisma ........................................................................................................ 104 4.4.2 Control and authority ....................................................................................................... 113 4.4.3 Sight and vision ............................................................................................................... 116 4.5 Zhang Ruimin‘s Unique Management Philosophy ................................................................. 126 4.6 Conclusion .............................................................................................................................. 129 Chapter Five From Rags to Riches: The Role of TQM in the Brand Building Phase (1984-1991). 132 5.1 Introduction ............................................................................................................................ 132 5.2 Industrial Policy from 1980 to 1991 ....................................................................................... 132 5.3 Changes in Organisational Culture in Haier ........................................................................... 138 5.4 Brand Building through Total Quality Management at Haier ................................................. 140 5.5 Conclusion .............................................................................................................................. 153 Chapter Six OEC Management, Competition and Expansion in the Diversification Phase (1991-1998) .......................................................................................................................................................... 155 6.1 Introduction ............................................................................................................................ 155 6.2 Haier‘s Development Strategies from 1991 to 1998 ............................................................... 156 6.2.1 Diversification and development through merger and acquisition .................................. 156 6.2.2 Market-oriented service improvement ............................................................................. 168 6.3 OEC Management .................................................................................................................. 171 6.4 Making Sense of the Policies: the Third Eye Theory ............................................................. 179 6.5 Conclusion .............................................................................................................................. 183 Chapter Seven Business Process Reengineering (BPR): The Solution to Company Obesity (1998- 2005) ................................................................................................................................................
Load more

Recommended publications
  • Chinks in the Armour of Hu Jintao Administration: Can a Harmonious Society Emerge in the Absence of Political Reform?
    China Perspectives 2007/3 | 2007 Creating a Harmonious Society Chinks in the Armour of Hu Jintao Administration: Can a Harmonious Society Emerge in the Absence of Political Reform? Willy Wo-Lap Lam Édition électronique URL : http://journals.openedition.org/chinaperspectives/1963 DOI : 10.4000/chinaperspectives.1963 ISSN : 1996-4617 Éditeur Centre d'étude français sur la Chine contemporaine Édition imprimée Date de publication : 15 septembre 2007 ISSN : 2070-3449 Référence électronique Willy Wo-Lap Lam, « Chinks in the Armour of Hu Jintao Administration: Can a Harmonious Society Emerge in the Absence of Political Reform? », China Perspectives [En ligne], 2007/3 | 2007, mis en ligne le 01 septembre 2010, consulté le 28 octobre 2019. URL : http://journals.openedition.org/ chinaperspectives/1963 ; DOI : 10.4000/chinaperspectives.1963 © All rights reserved Provided by OpenEdition CORE Metadata, citation and similar papers at core.ac.uk Special feature s e v Chinks in the Armour of the i a t c n i e Hu Jintao Administration h p s c r Can a Harmonious Society Emerge in the Absence of Political Reform? e p WILLY WO-LAP LAM The leitmotif of the much-anticipated Seventeenth CCP Congress in October 2007 was how to give substance to the goal of “constructing a harmonious society.” However, the Hu-Wen leadership’s refusal to undertake real political reforms, especially sharing power with “disadvantaged” socio-economic groupings, has exacerbated differences across disparate classes and sectors. This article argues that “harmony” can hardly be attained while the Party— which is in cahoots with monopolistic business groups—refuses to yield the tight grip it has on power and its ironclad control over the nation’s resources.
    [Show full text]
  • Core Firm Based View on the Mechanism of Constructing an Enterprise Innovation Ecosystem: a Case Study of Haier Group
    sustainability Article Core Firm Based View on the Mechanism of Constructing an Enterprise Innovation Ecosystem: A Case Study of Haier Group Shimei Jiang 1, Yimei Hu 2,* and Ziyuan Wang 3 1 School of Economics and Management, Hebei University of Technology, Tianjin 0401, China; [email protected] 2 Department of Business and Management, Aalborg University, 9200 Aalborg East, Denmark 3 Beijing Foton Daimler Automotive Co., Ltd., Beijing 101400, China; [email protected] * Correspondence: [email protected]; Tel.: +45-9940-8360 Received: 2 May 2019; Accepted: 26 May 2019; Published: 1 June 2019 Abstract: The fierce competitive status of the business world has urged innovation activities to transform from mechanistic to ecological and organic. An innovation ecosystem consists of multilateral organizations and emerges as a favorable mechanism for value co-creation and sustainable growth. Yet the theorizing of an innovation ecosystem is still at an early stage and in-depth studies from emerging economy leaders are insufficient. This study aims to investigate how an innovation ecosystem is constructed and coordinated from a core-firm based view. An exploratory single case study on the Haier Group is adopted. Through analyzing the multi-bedded units (i.e., six innovation projects/technological breakthroughs), we extract and depict Haier’s innovation ecosystem and the ecological niches within it. We highlight an innovation ecosystem that promotes sustainable development and is based on complementarities in technologies and resources, while at the same time integrates non-technological issues such as strategy, culture, institution, and the market. Regarding ecosystem coordination, value appropriability should be ensured to sustain the innovation ecosystem.
    [Show full text]
  • Management Innovation Made in China Haier’S Rendanheyi Frynas, Jedrzej George; Mol, Michael J.; Mellahi, Kamel
    Management Innovation Made in China Haier’s Rendanheyi Frynas, Jedrzej George; Mol, Michael J.; Mellahi, Kamel Document Version Accepted author manuscript Published in: California Management Review DOI: 10.1177/0008125618790244 Publication date: 2018 License Unspecified Citation for published version (APA): Frynas, J. G., Mol, M. J., & Mellahi, K. (2018). Management Innovation Made in China: Haier’s Rendanheyi. California Management Review, 61(1), 71-93. https://doi.org/10.1177/0008125618790244 Link to publication in CBS Research Portal General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. Take down policy If you believe that this document breaches copyright please contact us ([email protected]) providing details, and we will remove access to the work immediately and investigate your claim. Download date: 28. Sep. 2021 Management Innovation Made in China: Haier’s Rendanheyi Jedrzej George Frynas, Michael J. Mol, and Kamel Mellahi Journal article (Accepted manuscript*) Please cite this article as: Frynas, J. G., Mol, M. J., & Mellahi, K. (2018). Management Innovation Made in China: Haier’s Rendanheyi. California Management Review, 61(1), 71-93. DOI: 10.1177/0008125618790244 DOI: https://doi.org/10.1177/0008125618790244 Copyright © The Regents of the University of California 2018. Reprinted by permission of SAGE Publications. * This version of the article has been accepted for publication and undergone full peer review but has not been through the copyediting, typesetting, pagination and proofreading process, which may lead to differences between this version and the publisher’s final version AKA Version of Record.
    [Show full text]
  • Haier Electronics Product Competitiveness Brought Business Improvement
    Equity Research December 15, 2016 Haier Electronics Product competitiveness brought business improvement Investment Focus Maintain BUY Action Ticker 01169.HK Haier Electronics is a global bellwether in home appliances and CICC investment rating BUY Last close HK$12.40 stands to benefit from product competitive improvement in 2017. Set TP at Rmb16.2 (13x 2017e P/E) and maintain BUY. CICC target HK$16.20 52wk price range HK$15.63~10.73 Market cap (bn) HK$35 Reasoning Daily value (mn) HK$34.99 Haier Electronics’ home appliance business is improving. Shares outstanding (mn) 2,792 1) Product competitiveness enhanced. 2) The original sales Free float (%) 100 system managed by both Qingdao Haier and Haier Electronics is Daily volume (mn sh) 2.72 Business sector Home Appliances & Electronics integrated in 2016. Channel efficiency improved. 3) Air conditioner turnaround boosts RRS channel business. 01169.HK HSCEI 118 Washing machine business turning around in 4Q16. 1) 109 The company has been promoting laser welding cylinder, FPA variable frequency motors. Product competitiveness improved 100 significantly. 2) Washing machines and refrigerators are 91 gradually targeting the high-end and customization market. (%) Value Relative 82 Casarte has become the leading brand among Rmb10k products. 73 In 2H16, ASP gradually moves down to match that of Siemen‟s; Dec-2015 Mar-2016 Jun-2016 Sep-2016 Dec-2016 trying to take market share from foreign brands. High-margin Casarte and customized products contribute 10% of total (Rmb mn) 2014A 2015A 2016E 2017E washing machine sales. 3) In 4Q16, we observed that Haier‟s Revenue 67,134 62,826 62,131 66,298 share in the washing machine market began to increase.
    [Show full text]
  • The 16Th Central Committee of the Chinese Communist Party: Formal Institutions and Factional Groups ZHIYUE BO*
    Journal of Contemporary China (2004), 13(39), May, 223–256 The 16th Central Committee of the Chinese Communist Party: formal institutions and factional groups ZHIYUE BO* What was the political landscape of China as a result of the 16th National Congress of the Chinese Communist Party (CCP)? The answer is two-fold. In terms of formal institutions, provincial units emerged as the most powerful institution in Chinese politics. Their power index, as measured by the representation in the Central Committee, was the highest by a large margin. Although their combined power index ranked second, central institutions were fragmented between central party and central government institutions. The military ranked third. Corporate leaders began to assume independent identities in Chinese politics, but their power was still negligible at this stage. In terms of informal factional groups, the Chinese Communist Youth League (CCYL) Group was the most powerful by a large margin. The Qinghua Clique ranked second. The Shanghai Gang and the Princelings were third and fourth, respectively. The same ranking order also holds in group cohesion indexes. The CCYL Group stood out as the most cohesive because its group cohesion index for inner circle members alone was much larger than those of the other three factional groups combined. The Qinghua Clique came second, and the Shanghai Gang third. The Princelings was hardly a factional group because its group cohesion index was extremely low. These factional groups, nevertheless, were not mutually exclusive. There were significant overlaps among them, especially between the Qinghua Clique and the Shanghai Gang, between the Princelings and the Qinghua Clique, and between the CCYL Group and the Qinghua Clique.
    [Show full text]
  • China Daily 0803 D5.Indd
    CHINA DAILY FRIDAY, AUGUST 3, 2012 businesscompanies 17 A shop assistant adjusts a Haier air conditioner in a store in Queens, New York. PROVIDED TO CHINA DAILY Taking on America The president of Haier America explains what it takes for a Chinese company to crack an overseas market By ARIEL TUNG in New York appliance brand for a third con- or fearless than the head of the [email protected] secutive year by Euromonitor Chinese appliance giant”. International, a London-based It called Zhang a “national It’s been 10 years since Haier business intelligence company. hero” in China; the man who America bought the wonderful Its global brand market share turned the failing factory into former head office of Green- We had to make Amer- grew by 1.7 percent to 7.8 per- Haier, “a galloping enterprise with wich Bank. icans feel that Haier is cent last year, according to the revenue of $20 billion and one of But there’s been no fanfare a localized US brand report. China’s fi rst global brands”. within the imposing 1920s, instead‘ of‘ an imported Due largely to the sheer size After saving the company, six-story limestone and sand- of its home Chinese market, Zhang quickly acquired other stone build- Chinese brand.” Haier Group’s total sales grew businesses and expanded the INVESTMENT ing at the ZHANG RUIMIN about 15 percent to $23.8 bil- product line to include other intersection HAIER’S CEO lion last year. appliances such as freezers, of Broadway and West 36th Its in the US, on the other dishwashers and microwaves.
    [Show full text]
  • Haier's Acquisition of GE Appliances
    Haier’s Acquisition of GE Appliances Jun Zhao Governors State University On January 15, 2016, Haier Group, China’s leading home appliances maker, announced that it was going to acquire General Electric’s Appliances unit for $5.4 billion. The deal was reached shortly after GE withdrew from an earlier agreement with Swedish appliance company Electrolux with a purchase price of $3.3 billion. This case analysis will explore the motives of Haier’s acquisition move, benefits the acquisition will likely bring to Haier, as well as potential challenges. It also includes an analysis of the US and global home appliances markets, with in-depth analysis of key competitors in this changing market. Keywords: Acquisition, Chinese Firms, Global Strategy, Appliances INTRODUCTION Haier Group announced on January 15, 2016 that it would acquire General Electric’s Appliances unit for $5.4 billion. The deal was approved by the Department of Justice on March 2, and was complete in summer 2016. It was revealed that state-owned China Construction Bank, government policy lender China Development Bank, Bank of America, and Merrill Lynch have agreed to finance the buyout and offer $6 billion line of credit to Haier (Flannery, 2016). The acquired GE Appliance unit will be integrated into Shanghai-listed Qingdao Haier unit (600690) of Haier Group. This acquisition agreement was reached shortly after GE withdrew from an earlier agreement with Electrolux to sell the appliance unit for $3.3 billion (Moffett, 2016). Electrolux’s acquisition agreement encountered objection from US anti-trust regulation because Electrolux already had a sizeable market share in the US appliances sector.
    [Show full text]
  • China's Telecom Industry on the Move
    Li, China Leadership Monitor, No.19 China’s Telecom Industry on the Move: Domestic Competition, Global Ambition, and Leadership Transition Cheng Li China’s telecom sector has been one of the country’s fastest-growing industries during the past two decades. Recently, a number of large, rapidly expanding Chinese firms have emerged to compete successfully in the global market despite heavy competition from multinationals. As the business leaders of China’s flagship telecom companies become famous within China, their personal stories are beginning to influence the leadership styles and management practices of a new generation of Chinese entrepreneurs. This paper examines the rise of China’s leading telecom firms (such as Huawei and ZTE) and the characteristics of their CEOs. Although the senior managers of China’s telecom industry do not have significant international exposure, they have not been deterred from adopting a “Go Out” strategy for expanding their business operations overseas. China’s economic rise has been accompanied by the growing competitiveness of Chinese enterprises in global markets.1 This trend is particularly evident in the case of the Chinese telecom industry. Gone are the days when Chinese telecom firms produced nothing but cheap, low-quality imitations; today, some Chinese flagship telecom enterprises— especially several large telecom equipment makers—have not only adopted a “Go Out” strategy to invest in foreign countries, but many have also acquired cutting-edge technologies and expanded into high-end products. The rapid growth of China’s telecom industry will further enhance China’s economic power and will thus have profound implications for the rest of the world.
    [Show full text]
  • Guiding Principles Guiding Principles
    Part I Guiding Principles COPYRIGHTED MATERIAL cc01.indd01.indd 1 110/20/090/20/09 66:33:47:33:47 PPMM cc01.indd01.indd 2 110/20/090/20/09 66:34:01:34:01 PPMM 1 Pride Observing New China ’ s 60 th anniversary in 2009, Westerners marvel at the country ’ s momentous changes. The obvious improvement in the standard of living of most Chinese, and the economic strength of the country, is evi- denced in virtually every city and town. The diversity in dress and entertain- ment, the new flexibility in sexual behaviors — even the increase in divorce and legions of lawyers — all speak to the uncontestable fact that China is no longer the drab, monolithic society so ingrained in Western consciousness. But even more fundamental is the change in outlook and spirit. One need only speak with Chinese people in the major cities to sense their newfound self - confidence and enthusiasm. They tell you plainly what they think — whether how to make money, or their dislike of government bureaucracy, or of the omnipresent air pollution. They give you their opinions bluntly — you don ’ t have to ask twice — and they don ’ t look over their shoulder before they speak out. The change in the economic lives of the Chinese people has been stagger- ing: Since 1978, China ’ s GDP per capita has increased more than 40 fold. Arguably, the Chinese economy is now the second largest in the world, 1 and in another 30 years it may well be the largest. Average salaries are low by Western standards, but prices are also low, so that most people, even rural farmers, are living far better than the income statistics indicate.
    [Show full text]
  • Media Coverage, Party Institutions, and Authoritarian Power-Sharing∗
    Is Any Publicity Good Publicity? Media Coverage, Party Institutions, and Authoritarian Power-Sharing∗ Fengming Luy Xiao Maz May 23, 2018 Political Communication, Forthcoming Abstract Existing literature identifies non-official media as a tool for rulers to gather information from below. We argue that such media also help identify threats among elites. Motivated by profit, partially free media tend to cover politicians who chal- lenge implicit norms of the regime. These political elites are perceived as threats to the power-sharing status quo, which leads peers to sanction them. We test this argument with evidence from the Chinese Communist Party’s intra-party elections of alternate Central Committee members in 2012 and 2007. With Bayesian rank likelihood models, we find that candidates who appeared more frequently in various partially free media received fewer votes from the Party Congress delegates, and this pattern is robust after accounting for a series of alternative explanations. Detailed case studies also show that low-ranked candidates have more partially free media coverage because they broke party norms. ∗This paper was earlier circulated as “Keep Silent and Make a Big Fortune: Partially Free Media and an Authoritarian Intra-Elite Election.” We would like to thank Chris Adolph, Quintin Beazer, Scott Gehlbach, Dimitar Gueorguiev, Qiang Guo, Rachel Heath, Yue Hou, Haifeng Huang, Eddy Malesky, Victor Menaldo, Mingxing Liu, James Long, Molly Roberts, Paul Schuler, Rory Truex, Haixiao Wang, Susan Whiting, Guoguang Wu, Yiqing Xu, Zhao Shukai, and seminar participants at the 2015 MPSA Annual Conference, the Forum of Political Economy and Economics at University of Washington, the Social Science Lab Joint Workshop at Fudan University, the 2016 Fudan-UC Workshop at University of California, San Diego, and the Center for Contemporary Chinese Political Studies at Sun Yat-sen University for helpful comments and suggestions.
    [Show full text]
  • Strategic Implications of Emerging Chinese Multinationals:: the Haier Case Study
    European Management Journal Vol. 20, No. 6, pp. 699–706, 2002 Pergamon 2002 Elsevier Science Ltd. All rights reserved. Printed in Great Britain PII: S0263-2373(02)00119-6 0263-2373/02 $22.00 + 0.00 Strategic Implications of Emerging Chinese Multinationals: The Haier Case Study HONG LIU, China Business Centre, Manchester Business School KEQUAN LI, Genertec Europe Temax Ltd, Cologne Recent years have witnessed the emergence of Chi- yet developed a facilitating policy framework for nese multinationals with a presence in both such activities. Many Chinese companies have developed and developing countries. Yet little is started to pursue internationalization on an experi- known about them. This paper presents a case mental basis while the government has adopted a study of one of the leading Chinese multinationals, flexible and practical approach to governing their the Haier Group. It addresses the internationaliz- international initiatives. For instance, it has given ation strategy that has made Haier successful, fac- special permission to certain companies to invest tors influencing the strategy, and the strategic overseas without being restricted by existing policy implications for both Western and Chinese compa- hurdles such as foreign exchange controls. nies. 2002 Elsevier Science Ltd. All rights reserved. To date, little has been known about the international Keywords: Internationalization, Chinese Multina- activities of Chinese companies. This paper, using the tionals, The Haier Group, International Business case study method, examines strategies, influences, Strategies, Developing Countries and process whereby the Haier Group, a leading Chi- nese home appliance manufacturer, has developed into an influential Chinese multinational. Haier has Introduction invested aggressively in a large number of developed as well as developing countries in the last few years and taken a large tranche of market share in those China is rising as a globally influential political and countries.
    [Show full text]
  • THE CASE of HAIER Amine Bouyoucef, the Tokyo Institute of Technology Sulin Chung, the Tokyo Institute of Technology
    Review of Business and Finance Studies Vol. 6, No. 2, 2015, pp. 59-74 ISSN: 2150-3338 (print) ISSN: 2156-8081 (online) www.theIBFR.com THE INTERNATIONALIZATION OF CHINESE MULTINATIONALS IN THE MIDDLE EAST AND AFRICA: THE CASE OF HAIER Amine Bouyoucef, The Tokyo Institute of Technology Sulin Chung, The Tokyo Institute of Technology ABSTRACT: This article investigates the internationalization strategy of the Chinese firm Haier in Africa and the Middle East and addresses strategic implications in Haier’s successful entry strategies in these difficult regions. It also draws some useful lessons for the industry incumbents willing to enter these markets. A case study approach of Haier in Africa and the Middle East with an emphasize on the Algerian market is used to shed more light on the striking internationalization patterns of the firm’s entry strategy in these developing regions of the globe. The results of this study suggest that, despite the hardship associated with doing business in Africa and the Middle East, Haier unlike its incumbent peers from developed nations and given its international entrepreneurship mindset, political and market acquaintances with these developing nations, seems to follow (1) an accelerated and early internationalization, (2) a dual-entry mode − entry simultaneously in developed and developing countries − and (3) an increased commitment and localization toward these markets. JEL: M160 KEYWORDS: Internationalization, Haier, China, Africa, The Middle East, Algeria, Emerging Markets MNEs INTRODUCTION he last decade witnessed overwhelming growth of the Chinese Multinational Enterprises (MNEs) worldwide, with Haier at the forefront of these firms, in the home appliance industry. In a period of Tno more than two decades, under the impulsion of its emblematic CEO, Ruimin Zang, the firm from Qingdao transformed its nearly bankrupted firm in 1984 to China’s number-one home appliance maker in 2001.
    [Show full text]