Haier: Management Control on a Tactical Level
Haier Group was China's largest white goods manufacturer and one of the world's fastest growing white goods companies. The company started out as a nearly bankrupt refrigerator plant in Qingdao, China, equipped with a group of low-skilled and undisciplined workers, low productivity, inferior product quality and a loss making business. Its current CEO, Zhang Ruimin, first took over the company in 1984 and established corporate rules and culture, revamped business strategy and set up an incentive-based management control system. All of these transformed Haier into a global player in less than 2 decades. This case study examines the establishment of Haier's management control system and how it was adapted into the company's internationalization strategies, how it motivated employees to reach high performance goals and how it structured the business units to obtain optimal operational efficiency.