Category Archives: Structure

I read an interesting article on BBC – http://www.bbc.co.uk/news/business-24622247 – and in the Economist – http://www.economist.com/news/business/21587792-radical-boss-haier-wants-transform-worlds-biggest-appliance-maker-nimble about Haier and their structure.

Haier, a Chinese manufacturing and appliance company, is a large company with 80,000 employees around the world.  It was a failing company in the late 1980s until Zhang Ruimin, it’s current CEO, turned it around and made it what it is today – a thriving international manufacturing company with high-quality goods.  He is known for adopting abnormal management practices and structures.

In his current move, he is removing middle managers and creating teams with members from different units – sales, manufacturing, etc. – that are based around ideas with their own performance metrics.  The units leaders are the employees that have submitted ideas to the company and won approval from their fellow employees.  Within those team, there is a “catfish” – a second-in-command that is looking for a chance to take control of the team if the leader ever fails.  Team members can leave whenever they want and join another team, or they can join two or three teams – being a leader in one and a “catfish” in another.

To me, this loose structure seems great in theory but to manage a multi-national company that requires the standardization of products, it can create some inconsistencies.  Creating an ad-hoc structure in a manufacturing company seems like a complex move.  The risks seems high but if it works out, the reward might be even greater.

Let me know what you think about Zhang Ruimin and his strategy.

Our interesting class discussion about this case has left me even more intrigued about Joanne Stevens’ action.  Specifically, what can she do now to correct the outcome of the group’s decision?  I said in class, she should not admit to her mistake of giving the group authority to develop their own standards, she should instead turn it around by saying it was a test.  I thought to myself, as Iris suggested, this may come as an insult to the group and indeed create some serious implications.  Maybe instead she should clarify what her expectation of the group is.  She clearly explained to them that the case load standards established several years previously were too low.  Instead of asking the group to establish their own standards, what she truly wanted, was for them to establish a way to increase the standards.  A mistake was clearly made in her directions. 

In “Speeding up Team Learning”, by Edmond, Bohner, and Pisano, creating an environment that encourages team learning requires the leader to serve as a “fallibility model” in other words, a leader should admit their mistake to the group to encourage discussion of concerns and errors without fear of punishment.  Clearly, this case was not set in a learning environment, so admitting to a mistake is not conducive.  The participative style is more appropriate in a learning environment or an environment with the leader present, not absent.  So I stick with my initial thought, she should turn it around by saying it was a test, the ultimate decision resides with her since the group is not thinking along her lines.