How Chinese Auto Companies Avoid Smearing Big Business Diseases (2)

Avoid infections "big business diseases"

Han Desheng issued an open letter on the first day of the establishment of the new GM. The letter said: "We will change the 'culture' of GM. The new corporate culture will pay more attention to the spirit of consumers, efficiency, responsibility and risk taking. We will fundamentally change the overall structure of the company: flattening the organizational structure, Simplify the management level, broaden the scope of management, and empower people who are close to the consumer to make decisions.The old business model has been terminated at GM, and now everyone on GM must be aware of this and be prepared to do so. Change, and rapid change."

Han Desheng’s remarks are actually the basic method to solve the problem of “big business diseases.” Specifically, Chinese companies must avoid three major innovations in order to avoid "big business sickness."

Rely on mechanism innovation to keep companies viable

The root cause of SOE “big corporate disease” is the employment mechanism. The formation of the employment mechanism is also a complex issue. To solve this problem, we must establish a market-oriented, customer-oriented, process-oriented performance appraisal management system. This system is the core of curing "big business diseases."

Only relying on performance can truly achieve the reasonable flow of personnel. The OEC management method used in Haier’s human resources management and the transformation of the “three workers” itself are not complicated. Many companies are also learning, but they always fail to learn. For example, Haier's "Three-Work Transformation" adopts the principle of "40% excellent, 50% qualified, and 10% trial", and the division itself adjusts itself. However, one company adopts a ratio of "10:70:20" and it is eliminated by department. Haier’s “Three-Worker Transformation” embodies incentives. However, this company has shown punishment, and it is of course difficult for employees to accept it. Haier’s mechanism innovation is to embody the concept of “horse racing is not a horse” and speaks with performance and results.

Rely on organizational innovation to allow companies to maintain flexibility

Organizational innovation is not simply to compress organizations and eliminate personnel, but to combine them with corporate strategies and business choices. For example, expanding new business areas or reengineering processes will involve changes in the organization. This will promote organizational change and personnel adjustment more smoothly.

In order to establish a market-oriented organizational structure, Haier has integrated its internal resources, adjusted its organizational structure based on the business division to a process-based organizational structure, and built three major operation centers, namely, "function center, product headquarters, and promotion headquarters." Haier also proposed that everyone is an SBU (Strategic Business Unit), and has established an assessment method for the upper and lower nodes of the process. This adjustment allows Haier to maintain its flexibility as a small business.

Do not be afraid of organizational innovation. Nearly all of the 500 largest companies listed in the Fortune magazine of the United States have made adjustments in their organizational structure to varying degrees, and the vast majority of them have adopted organizational deflation. General Electric Co., Ltd., through the flattening of its organizational structure, has successfully cured "big business diseases." From more than 10 years from the beginning of the revolution to the completion of the revolution, its sales increased from 20 billion U.S. dollars to 100.4 billion U.S. dollars. Its profits have increased substantially, its strength has risen to the second place in the world, and the number of employees has dropped from 410,000 to 293,000. This efficient transition is due to the organization’s flattening strategy implemented by President Welch. When Welch became CEO in 1981, there were as many as 24-26 floors of GM's management from the chairman to the site manager. Through the implementation of "borderless operations" and "zero management", the company's management level has been reduced to 5-6 layers. The drastic reduction at the management level has disintegrated the bureaucracy that had been embedded in the GM since the 1960s. It not only saved a lot of expenses, but also effectively improved the management functions. The efficiency of the company has also greatly improved.

Rely on cultural innovation to keep companies competitive

Fundamentally speaking, "big business disease" is itself a cultural phenomenon. To cure this disease, system innovation is indispensable, but in the end it still depends on the power of culture. Culture is not only the soul of the system, but also determines the effectiveness of the implementation of the system. Corporate change begins with culture and finally culture. Must promote a kind of corporate culture of cooperation, sharing, orderly competition, in order to eradicate the "big business disease" breeding.

In 2001, Lenovo Group exclaimed that it had suffered from “big corporate disease” and its competitiveness has declined. Therefore, a series of reforms have been carried out. President Yang Yuanqing's approach is to start from the highest level and start a virtual meeting. Everyone must review himself and find where he really needs communication and lacks communication. When the communication really found a problem, such as a good person to get a shelf, difficult to communicate, the company let him put a mirror in the room, often look at their own look. For those who are preoccupied with others and are calculating too much, the company has to allow him to do two things that are completely irrelevant to his work every month, and list it as his work goal.

General Electric's "cooperation" program is more effective. The program mainly includes two aspects: First, employees must be able to make recommendations to the management face to face; Second, management should make employees get back on the spot as much as possible. The “Cooperation” program has brought about significant economic benefits, allowing employees to participate in management and injecting a sense of participation and belonging, which has greatly improved the enthusiasm of employees. Now, "cooperation" has become a daily activity of General Electric and can be held at any time according to needs. The participants also expand from employees to customers, users and suppliers.

“China's state-owned enterprises want to avoid becoming infected with the diseases of large companies. They must prevent them from doing so, and through sustained changes, they should maintain their vitality and competitiveness.

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