Assignment Managing performance at Haier

Date : 29
th
November 2013




























Question No. 1 Use the Lewins Force Field Analysis to analyze the change(s) at
Haier.
In China, Haier introduced several changes in the organization to engineer a
turnaround in the companys fate. Firstly, 1984 onwards, the company diversified its
product line from 1 model to 86 different product categories. The company also
pursued a strategy of creating and then dominating market niches. Supporting this
innovation and diversification was an emphasis on product quality.
The second change that the company implemented were its new human resource
management policies. Third was the companys globalization, which meant not only
that the company was moving to new territories but also that changes needed to be
made according to the culture and law of the host country, in this case the US.
For this assignment, I have used the Lewins Force Field Analysis to evaluate the
changes made by the company in the broad categories defined above.
The scale used for the analysis is 1-4; with 1 being the least important and 4 being the
most important.
According to my analysis, the score for factors supporting change is greater than the
score for factors against change. Even if the scores were vice versa, we would still
support the need for change given the ailing state of the company at the time.
Forces for change

F
o
c
u
s

o
n

p
r
o
d
u
c
t

d
i
v
e
r
s
i
f
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c
a
t
i
o
n
,

i
n
n
o
v
a
t
i
o
n

&

q
u
a
l
i
t
y



Forces against change
Company needs change to climb
out of virtual bankruptcy
4 2 Diversification is risky and can result
in unrecoverable costs

Niche market strategies increase
market share

3

2
Customers may not respond
favorably to higher prices in return
for better quality

Focus on quality differentiates
product

2
2
Generating funds for innovation is
problematic

Diversification is important for
growth


2

3
Innovation has to be managed within
the constraints of the organizations
competing values and resource
strategies

Intense market competition
requires such measures
3

14 9


Forces for change

A
d
o
p
t

i
n
n
o
v
a
t
i
v
e

H
R
M

p
o
l
i
c
i
e
s


Forces against change
Company is making a loss 4 2 Employees resist change

Employees are undisciplined
resulting in inefficiency
(urinating on floor)
4 3 Hierarchies and guanxi networks not
only mean that the organization
should change but also hinder the
change process

Presence of hierarchy and guanxi
networks reduces response time
3 3 Implementing such stringent policies
could create employ resentment
(especially if it results in pay cuts)
Frequent and transparent
performance appraisals increases
competition between employees
resulting in increased productivity

3


3
Losing face is considered to be a
severe indictment that results in
immense embarrassment
Accountability means that
managers assume responsibility
for their actions
2 2 Chinese managers in SOEs are
professionally undereducated
Activities like reflecting on the
footprints effectively motivates
employees

2 2 Chinese managers information
conduits, not decision makers
Regular performance reviews
enables company to identify
employees who do not meet
expectations as well as recognize
creativity and success in the
organization

3
Job rotation ensures that
employees understand different
areas of the company

2
Bureaucracy and inefficiency,
with little regard for cost or
quality control and customer
needs
3
15 26


Forces for change

E
x
p
a
n
d

G
l
o
b
a
l
l
y

Forces against change
Access to new markets
3
2

Going global is costly

Maintain competitive edge

3
2 Successful management practices
may not be transferable to other
cultures

Diversification reduces risk and
helps steady cash flows

3
2
Regulatory standards in other
countries are different and require
adaptation
2 Forex fluctuations may reduce
profitability





Forces for change

A
d
a
p
t
i
n
g

H
R
M

p
o
l
i
c
i
e
s

t
o

U
S
A

Forces against change
Adapt to local culture to ensure
employee motivation

4


4

3
Non-compliance to laws may
result in heavy fines, destroy
brand image and create
resentment among employees

Need to comply to local laws
2


New policies may be
ineffective

8 5
8 9
Question No. 2 Do you think the management handled the change in USA
effectively? Why or why not?

I think management was very effective in handling the change. They retained their
unique performance measurement philosophy while adapting to the US culture and
local laws. President of Haier found the policies to be effective in correcting
undesired behavior. According to PR Newswire, the latest statistics show that whole
year-on-year growth of Haier's U.S. market in 2012 is 22.2%, 59.9% for refrigerators,
110.4% for washing machines, and 12.1% for air conditioners, making Haier one of
the most welcomed household appliances brands among local consumers.


































References

PR Newswire. "2013 CES Global Consumer Electronic Trends Research Report"
Highlights Haier. Accessed on 28
th
November 2013. Available at
<http://www.prnewswire.com/news-releases/2013-ces-global-consumer-
electronic-trends-research-report-highlights-haier-188817341.html>