The Management Transformation of Huawei: From Humble Beginnings to Global Leadership

Description

Huawei has become China's most prominent multinational company and a leader in the ICT sector. Given unprecedented access to the company, the authors of this book examine the management transformation of Huawei from its inception in 1987 until 2019, observing in detail not only the creation of its organizational routines but also the breaking of routines across most major functional areas: Management, Product Development, HR, Supply Chain, Finance, R&D, Intellectual Property, and International Business. 'Dynamic capabilities' are central to theories of competitive advantage and this book highlights Huawei as an ideal case study for the successful implementation of change routines and change-supporting values. The chapters cover all the major change initiatives the firm has undertaken since 1996 to import best practices from the West, with the help of consultants. The insights presented in the book will be particularly interesting for academics in the field of strategy, management, and business history. Cover Half-title Title page Copyright information Contents List of Figures List of Tables List of Contributors Preface 1 The Management Transformation of Huawei: An Overview 1.1 Introduction 1.2 A Brief History of Huawei 1.3 Key Features of Huawei's Management Philosophy and Culture 1.4 Creating Routines and Breaking Routines 1.5 The Chapters in this Book References Commentary on Chapter 1 A1.1 Introduction A1.2 Corporate Histories from Founding A1.3 The Early Imprinting Years A1.4 The Employment Relationship at Huawei A1.5 Ren Zhengfei Leadership A1.6 The Handover from Founder to CEO Successor A1.7 Conclusion References 2 The Executive Management Team and Organizational Change: A Routinized Transformation Perspective 2.1 Introduction 2.2 Leadership in Significant Transformation Milestones Top Management Team as the Catalyst of Change Transformation Cycle: Copying Exactly, Refining Later, and Then Solidifying Building the Gene of Routinization into Company Culture 2.3 Transformation of the Top Management Team Moderate Decentralization in the Leadership Structure Seeking Strategic Consistency with Various Leaders 2.4 Conclusion References Appendix A2.1 List and background of Huawei EMT members Commentary on Chapter 2 References 3 Transforming Product Development at Huawei: The IPD Initiative 3.1 The Significance of Integrated Product Development Lack of Balance between Technology Development and Product Development The Lack of Standard Processes in Product Development The Paradox between Customer-Centricity and Efficiency The Establishment of the Cross-Functional Team The Establishment of Routinized Working Processes and Templates The Establishment of a Market-Oriented Evaluation System The Transformation of Customer Orientation 3.2 The Core Ideas of IPD Customer-Oriented: What Products Should Be Developed? The Cross-Functional Team: Who Should Be Responsible for Product Development? Standard Process and Templates: How Is Product Development Correctly Performed? 3.3 The Implementation of IPD CEO Project Copying Precisely, Refining, and Solidifying Slow Adaptation 3.4 Conclusion References Commentary on Chapter 3 Reference 4 Huawei's Transformation of Supply Chain Management 4.1 Introduction 4.2 Stage I: Integrative Supply Chain Select IBM as the Teacher and Wear a Pair of American Shoes Problems Solutions Process IT System Organizational Change Evaluation of Performance Outcomes and Discussion 4.3 Stage II: Global Supply Chain The Challenges of Global Supply Chain Management Implement Overseas ERP Project Pilot Projects in Selected Countries Diffuse with a ''Cell Division'' Pattern Establish an Integrative and Global Supply Network Tailor Local Supply Chain Practices Discussion 4.4 Conclusion References Commentary on Chapter 4 5 Financial Management Transformation in Huawei 5.1 Introduction 5.2 The First Financial Management Transformation Project Four Standardizations 5.3 Background of IFS Development of the Telecommunications Industry Operation Risks Financial Efficiency 5.4 The Second Financial Transformation Project Integrated Finance Services IDS I (2007–2011) IDS II (2010–2013) 5.5 Promotion of IFS 5.6 IFS Benefits 5.7 Financial Management of Huawei Financing Investment Acquisition 5.8 Conclusion References Commentary on Chapter 5 References 6 The Transformation of Huawei's HR System 6.1 Introduction 6.2 Stage I Personnel Management (1987–1991) 6.3 Stage II The Beginning of Human Resource Management (HRM) (1992–1997) 6.4 Stage III Strategic Human Resource Management (SHRM) (1998–2005) 6.5 Stage IV International HRM (2006–2010) 6.6 Stage V Talent Management (2011–2016) 6.7 Conclusion References Commentary on Chapter 6 References 7 Huawei's Internationalization Journey 7.1 Huawei's Journey of Internationalization Stage I: Overcoming the Liability of Foreignness Take the Value-Sensitive Segment as the First Foothold Enhance Brand Image to Target Customers Serve Customers with Special Value Added Think and Act Like Locals Do Stage II: Managing Complexity to Achieve Synergy from a Global Perspective Leverage Global Resources to Achieve Synergy Go Fast by Moving Slowly Balance Efficiency and Responsiveness in Constructing the Management System Build Organizational Coherence in a Culturally Diverse Context Proactively Manage the Public Image Stage III: Changing from a Latecomer Mindset to One of a Global Leader Follow a Symbiotic Philosophy in International Expansion Adjust Market Entry Strategies according to Environment Dynamics Be More Open and Inclusive in Management 7.2 Conclusions References Commentary on Chapter 7 A7.1 Introduction A7.2 Key Learnings from This Chapter A7.3 Fruitful Areas for Further Study Reference 8 Huawei's R&D Management Transformation 8.1 Introduction 8.2 Theoretic Framework for Transformation Management 8.3 Before 1991 Initial Background of R&D Management Transformation Starting as a Simple Agent Business A Struggle for Survival 8.4 1991–1994 Informal R&D Management Identifying the Need for Transformation Initiating Transformation R&D Structure Goes beyond the Manufacturing Department Change in Process Making Feedback-Based Adjustments 8.5 1995–1998 Establishing a Formal R&D Management System Identifying the Need for Transformation Initiating Transformation Establishing the Central R&D Department Product Quality was Ensured by Pilot Production and Testing Changes in Processes Making Feedback-Based Adjustments Expanding the Pilot Production Department to Ensure Manufacturing Quality Creating a Formal R&D System Early Moves toward Long-Term R&D 8.6 1999–2004 Huawei's IPD System Identifying the Need for Transformation Initiating Transformation Testing by Pilot Projects R&D Resource Sharing with Better IT Support Systems Making Feedback-Based Adjustments Systematizing Changes 8.7 2005–Now Ongoing Transformation Toward Global Leadership Integrating Global Resources by Establishing Worldwide Research Centers Building Noah's Ark to Embrace Future Challenges 8.8 Conclusion References Commentary on the Chapter 8 9 Huawei's Intellectual Property Management Transformation 9.1 Introduction 9.2 Comparing Patent Behavior of Huawei and Its Chief International Rivals 9.3 Explaining Huawei's Patent Strategies Context of China Huawei's Focused Corporate Strategy Switching from Imitator to Innovator Strategy The Cisco Case Licensing IP of Competitors Cross-Licensing IP with Competitors Protecting IP by Turning Software to Hardware 9.4 Transformation of IP Management Organizational Structures and Routines 1995–2003 2004–2018 9.5 Lessons from Huawei's IP Strategy Transformation References 10 The Management Transformation of Huawei: Concluding Thoughts from a Comparative Perspective 10.1 Placing Huawei in a Larger Context 10.2 Organic Growth and Not Growth Through Acquisitions 10.3 Huawei Is Different from State-Owned Companies 10.4 Contributions to Literature on Routines and Dynamic Capabilities 10.5 Challenges to Future Growth References Appendix A Number of Employees and Sales, 1987–2018 Appendix B List of Presentations at Ruihua Institute of Innovation Management, Zhejiang University Winter 2014 Spring 2015 Summer 2015 Autumn 2015 Winter 2015 Spring 2016 Winter 2016 Spring 2017 Summer 2017 Appendix C Interviews Conducted for the Book Appendix D The Huawei Basic Law (1998) Chapter One – Our Mission 1 Core Value Article 1: Pursuit Article 2: Staff Article 3: Technology Article 4: Spirit Article 5: Benefits Article 6: Culture Article 7: Social Responsibility 2 Basic Objectives Article 8: Quality Article 9: Human Capital Article 10: Core Technology Article 11: Profit 3 Our Growth Article 12: Growth Sector Article 13: Driving forces for Growth Article 14: Growth Speed Article 15: Growth Management 4 Distribution of Value Article 16: Value Creation Article 17: Capitalization of Knowledge Article 18: Way of Value Distribution Article 19: Principle of Value Distribution Article 20: Rationality of Value Distribution Chapter Two – Basic Business Policy 1 Core of Operation Article 21: Business Focus Article 22: Operational Model Article 23: Resource Allocation Article 24: Strategic Partnerships Article 25: Service Network 2 Research and Development Article 26: R&D Policy Article 27: R&D System Article 28: Pilot Test 3 Marketing Article 29: Market Position Article 30: Market Expansion Article 31: Sales Network Article 32: Marketing Team Building Article 33: Resource Sharing 4 Production Model Article 34: Production Strategy Article 35: Production Distribution 5 Finance and Investment Article 36: Financing Strategy Article 37: Investment Strategy Article 38: Capital Management Chapter Three – Basic Organizational Policy 1 Basic Principle Article 39: Guideline to Establish the Organization Article 40: Principle to Set Up Organization Structure Article 41: Principle to Set up Positions Article 42: Responsibilities of Managers Article 43: Expansion of the Organization 2 Organizational Structure Article 44: Basic Organizational Structure Article 45: Major Structure Article 46: Business Units Article 47: Regional Companies Article 48: Evolution of the Matrix Structure Article 49: Help Network Article 50: Hierarchy of Organization 3 Senior Management Organization Article 51: Senior Management Organization Article 52: Responsibilities of Senior Management Article 53: Decision System Article 54: Code of Conduct for Executives Chapter Four – Basic Human Resource Policies 1 Principle of HR Management Article 55: Primary Purpose Article 56: Basic Principle Article 57: Justice Article 58: Fairness Article 59: Openness Article 60: HR Management System Article 61: Internal Labor Market Article 62: People Responsible for HR Management 2 Employees' Duties and Rights Article 63: Employees' Duties Article 64: Employees' Rights 3 Assessment System Article 65: Basic Assumption Article 66: Assessment Method 4 Main Norms of HR Management Article 67: Recruitment and Employment Article 68: Dismissal Article 69: Remuneration and Welfare Article 70: Automatic Pay Cut Article 71: Promotion and Demotion Article 72: Job Rotation and Expertise Training Article 73: HR Development and Training Chapter Five – Basic Control Policy 1 Management Control Policy Article 74: Policy Article 75: Goals Article 76: Principles Article 77: Continuous Improvement 2 Quality Management and Quality Assurance Systems Article 78: Quality Control Article 79: Quality Objectives 3 Comprehensive Budget Control Article 80: Nature and Task Article 81: Management Responsibility 4 Cost Control Article 82: Focus Article 83: Control Mechanism 5 Restructuring of Business Processes Article 84: Guideline Article 85: Process Management Article 86: Management Information System 6 Project Management Article 87: Necessity Article 88: Management Focus 7 Audit System Article 89: Function Article 90: System Article 91: Limits of Authority 8 Control of Business Units Article 92: Policy Article 93: Performance Evaluation Article 94: Decision-making Power Article 95: Control and Audit Article 96: Service-oriented BUs Article 97: Profit-related Compensation System 9 Crisis Management Article 98: Crisis Awareness Article 99: Early Warning and Disaster Relief Chapter Six – Successors and Modification to The Basic Law Article 100: Inheritance and Development Article 101: Requirement for Successors Article 102: Selection of Successors Article 103: Modification to The Huawei Basic Law Index