Publication Date:Apr 10, 2008
Source:University of Hong Kong
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Haier Group was China's largest white goods manufacturer and one of the world's fastest growing white goods companies. The company started out as a nearly bankrupt refrigerator plant in Qingdao, China, equipped with a group of low-skilled and undisciplined workers, low productivity, inferior product quality and a loss making business. Its current CEO, Zhang Ruimin, first took over the company in 1984 and established corporate rules and culture, revamped business strategy and set up an incentive-based management control system. All of these transformed Haier into a global player in less than 2 decades. This case study examines the establishment of Haier's management control system and how it was adapted into the company's internationalization strategies, how it motivated employees to reach high performance goals and how it structured the business units to obtain optimal operational efficiency.
The stellar growth of Haier from humble beginnings to internationally recognized brand is a testament to the potency of good management. Despite the booming domestic market, Haier's success is attributed to the solid fundamentals as a result of the company's pragmatic approach to management and customer service. The case targets business students seeking to learn from a real life example of growing an international enterprise. Its teaching objectives are: 1. To provide students with a basic understanding of management control (MC) systems for fast-growing companies such as Haier, with global operations requiring seamless coordination. 2. To analyze the finance division's structure within Haier and its congruence with Haier's management accounting system. 3. To examine the duality of the business financial officer's (BFO) role and its impact on Haier's internal control mechanism.
Accounting; Business & government relations; Finance; Globalization; Management controls; Motivation; Operations management; Organizational culture; Organizational structure; Strategy
- Geographic: China