This case study describes how ZEISS Vision Care China, a subsidiary of the Germany-based ZEISS Group, was transforming itself into a service-oriented business. After the implementation of the transformation towards an agile organization-which involved digitalization and a radical organizational change-the company was beset with numerous issues in 2021, such as chaotic work processes, the increased workload of all staff, the resignation of critical personnel, and customer complaints. On top of that, some executives expressed concerns during a strategy meeting with Winston Yang, General Manager of ZEISS Vision Care China, regarding the need for such a radical overhaul, especially considering the company's already robust annual growth rate. Some executives even suggested the transformation should be postponed. The unexpected and challenging situation of the company forced Winston Yang to ask himself whether it would be necessary for the company to continue with such a high-risk organizational transformation.
China's companies have long been acclaimed for their manufacturing prowess and, more recently, for their pragmatic approach to innovation. Now it's time to recognize how they are reinventing the role of management through an approach the authors call "digitally enhanced directed autonomy," or DEDA. These companies use digital platforms to give frontline employees direct access to shared corporate resources and capabilities, making it possible for them to organize themselves around specific business opportunities. Autonomy is not complete, nor is it given to everyone. It is directed exactly where it is needed, and what employees do with their autonomy is carefully tracked. The approach contrasts with the Western model of empowerment, which gives employees broad autonomy through reduced supervision. This article describes the three core features of the DEDA approach: granting employees autonomy at scale, supporting them with digital platforms, and setting clear, bounded business objectives. It offers examples of how companies are using those features and draws lessons for Western companies.
This case describes the regional restructuring story of Bank of China (BOC) Liaoning Branch, a provincial branch. In January 2016, BOC's Beijing head office decided to make a crucial strategic adjustment to its institutional setup in Liaoning Province. Tianbing Jia, the newly appointed president of Liaoning Branch, was tasked with splitting up the branch and relocating it from the city of Dalian to the city of Shenyang in just three months. Jia and his executive team made meticulous preparations for the separation and relocation to ensure everything went smoothly while safeguarding employees' well-being. Thanks to the effective work of Jia and his team, the relocation was completed on time. However, this was just the first step in a complicated restructuring process. Following the move, Jia and his team had to start a new organization from the ground up in an unfamiliar city. This presented another significant challenge: integrating Liaoning Branch from Dalian and Shenyang Branch into a new provincial branch.
Michel Default, Director of Michelin China's Personnel Department, had been responsible for leading Michelin China, a company that manufactures and sells tires, to transform its personnel function since 2017. The ongoing transformation aimed to optimize the company's personnel function to align with both the outside business environment and the needs of the internal employees, with one goal of better helping manage people's careers at Michelin. In addition to the unavoidable resistance, Michel received an email in 2019 from a key account manager seeking an unexpected promotion. The manager also hinted at possibly quitting if he did not get a convincing reply, for the new practice implemented in Michelin China required him to do additional work. Michel would not want to see the company lose the key account manager, especially when Michelin's turnover rate was increasing. Knowing that he had to achieve the right balance between employee satisfaction and company situation, Michel faced a great challenge in his own career in China.
The Economist opened 2021 with a cover story headlined "Why Retailers Everywhere Should Look to China." It's not hard to see why. China is both a large and a fast-growing retail market--worth about $5 trillion in 2020--and highly digitized. And the pandemic has made digital every retailer's strategic priority. The authors draw from their research on Chinese retailers to explain five lessons that Western companies can learn from China as they develop their own digital market offerings: 1) Create single entry points where customers can access all their potential purchases. 2) Embed digital evaluation in the customer journey. 3) Don't think of sales as isolated events. 4) Rethink the logistical fundamentals. 5) Always stay close to the customer.
This series of case studies lift the veil of wellness tourism, a popular but relatively niche market. Case A describes how wellness tourism had become more mainstream in recent years. At the foot of the Alps, there is a low-key luxury resort called Grand Resort Bad Ragaz. The resort Group organically combines the tradition of a family business and Swiss innovation in its strategy. On the one hand, all group-level decisions put the protection of the spring with about 800 years history as a prerequisite, and on the other, the resort group explores business opportunities with an open and creative mindset. However, in Europe, where the market was mature and saturated while the population was aging, how could wellness hospitality businesses stand out? Should Bad Ragaz Group keep focusing on loyal European guests who had already visited multiple times, or should they focus on new guests from Asia, especially China who seemed to be willing and able to visit more frequently and spend more in the future?
It had been one year since Anita Basu joined the Grand Resort Bad Ragaz as the Director of the Medical Center and member of the Executive Committee. Basu believed that the Grand Resort Bad Ragaz differentiated itself from other high-end resorts because of the centuries-old thermal spring and five-star experience that integrated medical treatment and other facilities. However, would the diversification of the facilities lead to the dilution of Bad Ragaz brand? Did the concept of holiday recreation and healthcare services bring synergy or conflict with each other? How would the aging population of Europe affect the Medical Center of Bad Ragaz? Basu read reports that pointed out the huge growth potential of the Chinese and Asian markets, but the past year was her first time seriously considering business development with Chinese customers and partners. It seemed that a direct shift in target audience from Europe to Asia might help Basu to increase the performance of the Medical Center or even the resort, but challenges like lack of mutual trust, legal differences, mismatched expectations, and language barriers had to be taken into consideration as well. Basu had to report to the CEO but hesitated as to whether she should propose a greater focus on Asian guests. If she should, how?
This case recounts the story of Taiwan's electronic component distributors of the early 2000s, which innovatively pursued horizontal consolidation amid unprofitability and an ailing industry climate due to vicious competition. As a result, these companies had to address enormous challenges in effectively managing a post-merger organization. Specifically, it explains the background of the strategic marriage between WPI Group, Taiwan's leading electronic components distributor, and SAC, the third-largest player in the same industry. They joined hands under the umbrella of a holding company WPG Holdings through a share swap deal. The new firm was the result of an innovative industrial holding model formed from the alliance and set a precedent for the regional industry. For WPG's inaugural Chairman Simon Huang, managing such a complex organization would be one of the biggest challenges of his career.
This case describes how Richard Lou, KEMET's Director of China Operations, was offered an opportunity from the U.S. headquarters to integrate the Batam Plant in Indonesia after he had led his Chinese team to successfully integrate the Shanghai Plant and the Nantong Plant. The opportunity gave Richard mixed feelings, for he was aware that the task of integrating the Indonesian plant, which had a very complicated background and had been suffering losses for many years, would be fraught-a make-or-break moment of his career. Should he rest on his laurels or rise to the challenge? Richard had to make a critical decision.
This case tells how Richard and the Chinese team decided to act. After arriving at the plant, Richard (the integration team leader), Jack Chen (the newly appointed General Manager of the Batam Plant), and other team members implemented a series of transformational initiatives, such as conducting comprehensive communications, adjusting the organizational structure, making the plant operations more efficient and controllable, training the leadership of the local team, and dealing with the business crisis caused by the strikes organized by the trade unions.
This case relates how Richard finally decided to accept the great challenge, and thus formed an integration team of experts in different functions, and got prepared in every aspect he could consider. However, on their journey to Indonesia, Richard was informed of a death-threat e-mail from someone at the Batam Plant. Should he put himself and his team at risk to fulfill the integration?
This case series tells a story of post-merger integration, depicting a string of challenges faced by Guangxi LiuGong Machinery Co., Ltd. during its cross-border M&A. As a large SOE specialized in R&D, manufacturing and construction equipment sales, LiuGong was one of China's most internationalized companies, setting a prime example for local peers in the construction machinery sector with global aspirations. The case series comprises two parts: Case (A) and Case (B). Case (A) introduces the background of LiuGong's globalization strategy, summarizes the acquisition of the civil construction machinery division of Polish state-owned firm HSW as well as its wholly-owned subsidiary Dressta, and describes the integration process of LiuGong Poland, managed by former HR Director Teddy Wu, who was appointed General Manager of LiuGong Poland at a critical moment. China headquarters deployed him to Poland with a series of missions to carry out. After the acquisition, wholly-owned Dressta continued to operate independently, but its performance fell short of expectations, and a significant part of its operations overlapped with those of LiuGong Poland. One of the first major decisions Wu faced was to determine whether merging Dressta with LiuGong Poland was necessary.
Liu Peijin is the president of Almond China, a subsidiary of the German company Almond Chemical. Almond China's joint venture with Chongqing No. 2 Chemical Company, which is currently failing to thrive, involves a clash of views regarding business ethics. The Chongqing executives are chafing under European standards that preclude gifts and commissions-incentives routinely employed by Almond's competitors. And a huge sale for the joint venture may be at stake. But Liu is thinking of Almond's reputation and its future business dealings in China. Commentaries by Xu Shuibo, the CEO of TNT Mainland China's subsidiary TNT Hoau, and Zhang Tianbing, the global vice president and the director of the China Research Center at A.T. Kearney.
Liu Peijin is the president of Almond China, a subsidiary of the German company Almond Chemical. Almond China's joint venture with Chongqing No. 2 Chemical Company, which is currently failing to thrive, involves a clash of views regarding business ethics. The Chongqing executives are chafing under European standards that preclude gifts and commissions-incentives routinely employed by Almond's competitors. And a huge sale for the joint venture may be at stake. But Liu is thinking of Almond's reputation and its future business dealings in China. Commentaries by Xu Shuibo, the CEO of TNT Mainland China's subsidiary TNT Hoau, and Zhang Tianbing, the global vice president and the director of the China Research Center at A.T. Kearney.
Liu Peijin is the president of Almond China, a subsidiary of the German company Almond Chemical. Almond China's joint venture with Chongqing No. 2 Chemical Company, which is currently failing to thrive, involves a clash of views regarding business ethics. The Chongqing executives are chafing under European standards that preclude gifts and commissions-incentives routinely employed by Almond's competitors. And a huge sale for the joint venture may be at stake. But Liu is thinking of Almond's reputation and its future business dealings in China. Commentaries by Xu Shuibo, the CEO of TNT Mainland China's subsidiary TNT Hoau, and Zhang Tianbing, the global vice president and the director of the China Research Center at A.T. Kearney.
Mike Graves, the general manager of a U.S. apparel company's 50/50 joint venture with a Chinese manufacturer, has made the joint venture into a big success, at least in the eyes of its Chinese executives and local officials. Zhong-Lian Knitting has turned around three money-losing businesses and has increased its payroll from 400 to 2,300 employees. But Mike's boss, the CEO of the U.S. company, Heartland Spindle, doesn't share the rosy view. He's looking for a 20% ROI, which he says will require laying off 1,200 Chinese workers. He also wants to aim at the high end of the clothing market, meaning the JV will have to meet much tougher standards of quality than it has been able to do so far. To make matters worse, the Chinese executives now want to make a fourth acquisition, which they hope will position the venture to start its own brand of apparel--a move that could eat into profits for years. Can Mike keep the joint venture from unraveling? In R0308A and R0308Z, four commentators offer expert advice on this fictional case study: Eric Jugier, the chairman of Michelin (China) Investment in Shanghai; Dieter Turowski, a managing director in mergers & acquisitions at Morgan Stanley in London; David Xu, a principal at McKinsey in Shanghai; and Paul W. Beamish, the director of the Asian Management Institute at the University of Western Ontario's Richard Ivey School of Business in Canada.
Mike Graves, the general manager of a U.S. apparel company's 50/50 joint venture with a Chinese manufacturer, has made the joint venture into a big success, at least in the eyes of its Chinese executives and local officials. Zhong-Lian Knitting has turned around three money-losing businesses and has increased its payroll from 400 to 2,300 employees. But Mike's boss, the CEO of the U.S. company, Heartland Spindle, doesn't share the rosy view. He's looking for a 20% ROI, which he says will require laying off 1,200 Chinese workers. He also wants to aim at the high end of the clothing market, meaning the JV will have to meet much tougher standards of quality than it has been able to do so far. To make matters worse, the Chinese executives now want to make a fourth acquisition, which they hope will position the venture to start its own brand of apparel--a move that could eat into profits for years. Can Mike keep the joint venture from unraveling? In R0308A and R0308Z, four commentators offer expert advice on this fictional case study: Eric Jugier, the chairman of Michelin (China) Investment in Shanghai; Dieter Turowski, a managing director in mergers & acquisitions at Morgan Stanley in London; David Xu, a principal at McKinsey in Shanghai; and Paul W. Beamish, the director of the Asian Management Institute at the University of Western Ontario's Richard Ivey School of Business in Canada.
Mike Graves, the general manager of a U.S. apparel company's 50/50 joint venture with a Chinese manufacturer, has made the joint venture into a big success, at least in the eyes of its Chinese executives and local officials. Zhong-Lian Knitting has turned around three money-losing businesses and has increased its payroll from 400 to 2,300 employees. But Mike's boss, the CEO of the U.S. company, Heartland Spindle, doesn't share the rosy view. He's looking for a 20% ROI, which he says will require laying off 1,200 Chinese workers. He also wants to aim at the high end of the clothing market, meaning the JV will have to meet much tougher standards of quality than it has been able to do so far. To make matters worse, the Chinese executives now want to make a fourth acquisition, which they hope will position the venture to start its own brand of apparel--a move that could eat into profits for years. Can Mike keep the joint venture from unraveling? In R0308A and R0308Z four commentators offer expert advice in this fictional case study: Eric Jugier, the chairman of Michelin (China) Investment in Shanghai; Dieter Turowski, a managing director in mergers & acquisitions at Morgan Stanley in London; David Xu, a principal at McKinsey in Shanghai; and Paul W. Beamish, the director of the Asian Management Institute at the University of Western Ontario's Richard Ivey School of Business in Canada.