There are many struggles that a company in China faces in order to become global. Being a little company in a “hierarchical society that often makes it difficult to practice Western management theories of empowerment and delegation” (Moran, Harris, Moran, p. 332) can be a huge feat to overcome and that is what Lenovo did. Lenovo did really well in its home country of China but when it tried to go global it ran into some hiccups. It all came together when Lenovo bought IBM in 2005 and eight years later becomes a fortune 500 company.
In order for Lenovo to become a global company they had to choose a leader that understood personal development, growth, and monetary rewards (Moran, et. al. p. 333) to entice employees and ensure they stick around. Once Lenovo had a grip on the small business portion they began to work on negotiations. In their negotiations they decided they wanted to go global, they bought IBMs corporate PC business division (“From guard shack to global giant”, 2013). From the economist an article was posted on how Lenovo became such a large company with all of the pitfalls and issues it endured. Bringing the Chinese culture to the United States was tricky and figuring out what works took some trial and error and it almost ruined the company trying to implement a strict culture into an American workforce.
Cultural differences made it trickier. IBMers chafed at Chinese practices such as mandatory exercise breaks and public shaming of latecomers to meetings. Chinese staff, said a Lenovo executive at the time, marvelled that: “Americans like to talk; Chinese people like to listen. At first we wondered why they kept talking when they had nothing to say.” Two Western chief executives failed to turn things around. By 2008, as the financial crisis raged, Lenovo was bleeding red ink. (“From guard shack to global giant”, 2013).
Lenovo then appointed a new leader, Yang Yuanqin, and started cleaning house. Yuanqin made changes in the company that were not typical Chinese culture practices. Saving face was no longer something he was highly concerned about. Guiding the company into success was most important. After many changes Lenovo became a fortune 500 company and is quite successful. Understanding the Chinese culture may not work in America was a key component to their success. “Yang sought to integrate IBMs organizational culture and promote cross cultural teamwork (Moran et. al, p. 329)” which improved the overall business and created a synergy employees were happy to work in.
The company is in a race against Hewlett-Packard and is improving while Hewlett-Packard is declining. The image below shows Lenovo on the incline in the PC business.
As the company adapts to coming into the global market and overcoming some hiccups Lenovo is in line with the large companies we have all known for many years. Coming from a small business in China to a large global business with a presence in America can be hard but learning about what the workforce is like and how to work with the people are the key components to success.
From guard shack to global giant. (2013, January 12). Retrieved March 31, 2015, from http://www.economist.com/news/business/21569398-how-did-lenovo-become-worlds-biggest-computer-company-guard-shack-global-giant
Moran, R., Harris, P., & Moran, S. (2011). Doing Business with Asians and Australians. In Managing cultural differences global leadership strategies for cross-cultural business success, eighth edition (8th ed.). New York, New York: Butterworth-Heinemann.
Worldwide Quarterly PC Tracker. (n.d.). Retrieved March 31, 2015, from http://www.idc.com/tracker/showproductinfo.jsp?prod_id=1