Zhang Ruimin: Achieving Excellence through Reinvention of Business Model and Corporate Culture at Haier




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INTRODUCTION

In March 2014, Zhang Ruimin (Zhang), Chairman and CEO of Chinese multinational consumer electronics and home appliances company, the Haier Group (Haier), stood 22nd on Fortune magazine’s list of the 'World's 50 Greatest Leaders'. Zhang was credited with transforming Haier into the world's largest appliance brand through his 'radical management innovations'. The Fortune article noted that Zhang “groups employees into small, self-managing teams that choose their own managers, compete for internal talent, and can earn big bonuses."

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Zhang was credited with reinventing the company’s business model and corporate culture after taking charge at Haier. In 1984, when Haier's predecessor, the Qingdao General Refrigerator Factory, was producing substandard products and was selling them at a premium due to huge demand, several consumers complained to the company about the poor quality of its products. Realizing that this model was unsustainable in the long run, Zhang focused on enhancing the brand and developing quality products. Zhang’s second reinvention at Haier came in 1991, when he saw that quality alone was not enough to woo consumers; great service was also needed. Thus, he reinvented the business model around providing service responsiveness. This required the workers to change the way they delivered their services to the consumers...

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