Modern methods shape companies
By Sun Min (China Daily)
Updated: 2004-03-01 10:43

If a bus could deliver your mail, would you take it more often?

What if it also serves tea, airs weather forecasts and even provides karaoke?

For residents in some remote communities in Qingdao, such a multi-functional bus is their natural choice when going out.

The bus is operated by the Qingdao Jiaoyun Group, a transportation and logistics company in the northeastern port city.

It has set up mailboxes on buses on the routes to some remote communities, where mail delivery is inconvenient for postal workers.

A staff member is assigned to collect the mail there and send it to the post office every day.

On the buses that run medium- and long-distance routes, the attendants serve tea, and karaoke is available.

"A happy trip full of love" read the banners on the fronts of the buses. This was even registered as a trademark for the transportation company as early as 1999, the first such service trademark registered in China at the time.

"We have always made brand promotion and service innovation top priorities in our work," said Qingdao Jiaoyun General Manager Zhao Yingchun.

"We make friends and deliver happiness," he said, quoting the company's slogan which summarizes its market-orientation and the essence of its outlook.

Shaping the core values of the enterprise and delivering them to employees and customers are challenging jobs for Chinese entrepreneurs, who have to tackle mounting competition as the Chinese economy shifts to a market-driven model.

The concept of corporate culture, which covers brand promotion, human resources, services, innovation and other management issues, was introduced to China two decades ago when the country started to adopt the reform and opening-up policy.

In the past, corporate culture was often better established in service companies.

But today it has become more acknowledged in other businesses, said Jin Siyu, a researcher with the Chinese Research Institute of Corporate Culture.

In Qingdao, where many famous Chinese enterprises are located, including Haier, Tsingtao Beer, Aucma and Hisense, the promotion of corporate culture has become a common tool to sharpen competitiveness.

Local residents in Qingdao were invited to visit Haier Group as the company initiated its "Experienceing Haier Culture" event last year. [newsphoto/file]

Many are taking a people-oriented culture that emphasizes personal values, innovation and service upgrades.

Visitors to Haier's headquarters in Qingdao, for example, would be impressed by the "Haier cartoons and words" posters that hang over the office passageways and factory billboards.

Each cartoon has been created by a Haier employee and tells a corresponding story.

One shows three monks standing around a water-storing vat and the caption says: "It is our own responsibility whether to let the vat (representing Haier) become empty (loss-making) or full (profitable)."

Haier has even made these cartoons into playing cards and given them as gifts to guests.

It has also established a Haier "university" in a traditional compound in its industrial park, providing training for the group's senior executives and more importantly, a tranquil place where they can sit together and exchange views.

A good corporate culture is the driving force for innovation and interaction within the corporation's development strategy, said Haier CEO Zhang Ruimin.

The group, developed from a near-bankrupt refrigerator factory two decades ago, is one of China's top electronic appliance producers. It is also making its mark in appliance markets overseas, with exports to more than 160 countries and regions.

How an enterprise positions itself in the marketplace will determine what type of culture it should develop. And how well it develops that culture tells whether the development strategy can be properly implemented, Zhang said.

"If we want to be an international company, then our culture also has to be international and our staff too," he said.

Haier has set up companies and production bases in many overseas markets and recruited a large number of local employees there.

In its domestic factories, performance evaluations of the staff are often directly posted on billboards. But to adapt to western culture, a manager of an Haier subsidiary in the United States thought of the idea to use toy bears and pigs to assess the staff's work instead if you have a bear sitting on your desk, it means good job, while having a pig means you should catch up.

Similar changes have also taken place at other Chinese companies which are entering the global market, though many of them still have a lot to learn before truly becoming internationally competitive.

The integration of eastern and western cultures is a process of handling conflicts and making compromises, said John Lombard, chief consultant of Newleaders International Corporation, an international consulting company.

The question of how to combine the two cultures and strike a balance between the different management styles is crucial to the success of Sino-foreign partnerships, said Lombard, who has been studying Sino-foreign co-operation cases in China for many years.

If they want to work together and have an effective partnership, then both Chinese and foreign enterprises have to be flexible and adjust their cultures to changes in the business environment, he said.

For example, Chinese companies normally give more respect to interpersonal relationships and uniformity, while foreign companies favour diverse opinions and a willingness to change.

"These enterprises need to stand somewhere in the middle (of the two cultures). Normally it takes two to three years to implement cultural changes," Lombard said.

Partnerships with foreign companies are not just about the introduction of capital, technology and expertise. They are also about the redesigning of corporate culture, said Li Jirong, deputy secretary of the Party Committee of the Shanghai Automotive Industry Corporation (Group), which has 58 joint ventures that contribute 95 per cent of its sales and profits.

"The automotive industry is one of the most globalized industries, so if we want to become one of the world's top 500 companies, we must have a globalized corporate culture," said Li.

Such cultural re-orientation is also crucial for businesses which are rapidly expanding, either domestically or globally.

Teng Angong, deputy Party secretary of Tsingtao Brewery Co, one of China's biggest breweries, said an important part of the company's expansion in China is the integration of its culture with that of the subsidiaries it acquired from other companies across the country.

"One of our first jobs after the acquisition is to send special teams to the subsidiaries to express our core management values and listen to the opinions of the new members, so that the transition will be smooth," he said.

The group has acquired more than 40 subsidiaries over the past decade. In the cases of the few acquisitions that did not work out well, disparities in corporate culture were mostly to blame, Teng said.

Private entrepreneurs in China are learning the same lesson.

Family businesses also need to have modern and adaptable corporate cultures, said Mao Lixiang, chairman of the Ningbo Fotile Kitchen Ware Co in East China's Zhejiang Province.

Many private businesses in Zhejiang have blossomed under the nation's economic reforms while many have also vanished quickly.

Mao founded Fotile eight years ago. It has now become a brand name in the kitchenware sector and maintained its leading position for years.

"We think personnel is the basic element for the development of an enterprise, so we chose to gradually weaken the family-management concept and introduced more professionals from the outside to take senior positions," Mao said.

The company spends as much as 3 million yuan (US$362,300) on personnel training each year, which is not a small figure for a medium-sized private company.

Instead of simply pursuing expansion, it has carefully designed its market-positioning first and followed up with brand promotion.

"Corporate culture seems intangible, but it exists everywhere in our operations and management. It is the soul of an enterprise," Mao said.

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