Reorient Your Business or Lose Out in the Internet Era, Haier CEO Tells Corporate Leaders

Businesses Must Radically Rethink Corporate Structure and Stakeholder Engagement, says Zhang Ruimin at Annual Meeting of the Academy of Management

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Aug 13, 2013, 04:19 ET

BEIJING, Aug. 13, 2013 /PRNewswire/ -- Businesses must radically rethink their corporate structure and relationship with key stakeholders to maintain a competitive edge, Zhang Ruimin, the chairman and CEO of Haier, today told a conference of leading management experts. Speaking at the Annual Meeting of the Academy of Management, the largest gathering of management scholars in the world, Zhang said that successful companies must work harder than ever to stay innovative and outlined Haier's approach to this business challenge.

Zhang commented, "Regardless of industry, access to information has completely transformed the balance of power between businesses and their stakeholders. At Haier, we have fundamentally reassessed how we interact with all our business partners - from customers and employees to our suppliers and peers. We cannot look on customers as passive buyers or employees as order-takers - equal access to information means that every one of our stakeholders is his own entrepreneur, and we as a firm must engage in contracts with all of them. Our future success will be driven by building more of these win-win partnerships that harness the collective power of our engagement with stakeholders - not zero-sum games that bring only short term gains."

Haier is the world's most popular major appliance brand, ranking #1 on Euromonitor's Global Brand ranking every year since 2009. It has also been recognized as one of the most forward-thinking companies globally and, in January 2013, was named one of the top ten Most Innovative Companies globally by the Boston Consulting Group.

"No company is successful because they are inherently better than their peers - true business leaders are successful because they adapt more quickly to changing market trends and remain successful only if they deliberately structure themselves to be nimble and unconventional even as they grow bigger," said Haier CEO Zhang Ruimin. "Haier has been a global leader for more than a decade. But to ensure that we continue to lead in the Internet era, over the last two years we have completed a radical redefinition of our corporate structure and culture. We define our new approach by what we call the 'Three Nos' - no internal borders separating different divisions of the company, no management hierarchy, and no limits on the scalability of our supply chain."

"The goal is for Haier to become a flatter, more agile company that responds more rapidly to customer demand. My vision is that anyone at Haier can be their own entrepreneur, with access to the skills, resources and support to enable them to take their own business ideas from concept to implementation. In this way, we unleash the potential of each individual, maximize the ability of our team and ultimately provide better value to our consumers. We have always told our employees that they should "Be your own boss" and "Create your own customers" and I believe our new 'Three Nos' structure will ensure that our employees can continue to do that, even as we grow to a firm of more than 80000 people in more than 160 countries globally."

The Annual Meeting of the Academy of Management, taking place in Orlando, Fla., this week, brings together more than 10,000 management experts and business leaders from 83 countries to discuss global trends across all management disciplines. Zhang commented, "There is no successful enterprise, but the enterprise in the era."

About Haier

Haier is the world's leading home appliance provider, with global revenues of US$25.8 billion and profit of US$1.42 billion in 2012. Renowned for its unique network-based management structure and industry-leading integrated global R&D team, Haier's mission is to create innovative home appliances that anticipate the fast-changing needs of consumers in 160 countries around the globe. Euromonitor International, a world leader in strategy research for consumer markets, has named Haier the number one global home appliance brand every year for the last four years. In 2012 the Boston Consulting Group named Haier one of the ten most innovative companies in the world.

SOURCE Haier