Market Economy Model of Chinese Management -Case of Haier-

Hideki Yoshihara and Tao Hua Ou-yang
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Hideki Yoshihara: Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan
Tao Hua Ou-yang: Tsinghua University and Zhongshan University, China

No 131, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: To explore a new style of Chinese management by the case study of Haier is the objective of this paper. Haier is the largest consumer electronics company in China. Wages of workers are only based on piece rate and determined by the rightly done jobs and the defects in their jobs. The evaluation of workers for wages is individualistic, instantaneous, quantitative, monetary, competitive and open. There is practically no room for discretional evaluation by supervisors and managers. Engineers who want to become the heads of new product development projects apply for the position with new product development plans (open competitive bidding). The salary of project managers and their subordinate engineers is determined by the market performance of new products such as the sales, the quality claims from customers and the costs of new products. Haier's management is based on the market principles of economics. It is the market economy model of management. And it is spreading among growing Chinese companies. We may say that they are more capitalistic than Japanese companies and even American companies.

Pages: 18 pages
Date: 2002-12
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https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/dp131.PDF First version, 2002 (application/pdf)

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