Classical report

Assessment 3 Written report

Classical management in the Haier group

Author: Emma-Louise Teichmann

1101IBA Management Concepts
Student number: s5072262
Tutor: Xanthe Golenko
Word count: 1, 484
Table of Contents
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1. Introduction and problem identification ............................................................................. 3

2. Discussion ........................................................................................................................... 4

2.0 Concurrent Control ......................................................................................................... 4

2.1 Bureaucratic control ............................................................................................................. 5

3. Recommendations .............................................................................................................. 6

4. Conclusion .......................................................................................................................... 7

5. References .......................................................................................................................... 8
 1. Introduction and problem identification

The concept of this report is to highlight areas of poor control in Haiers workplace, and the
influence it has on productivity in the workplace, alongside; making recommendations that will
be suitable for solving the management control issue detectable in Haier. When people are left
with minimal periods of time to complete household jobs, they turn to their appliances to make
life easier and complete the job faster and more efficiently (Johnson S. , 2015). One company
who know supplies the world with their household appliances, is Haier. Originally being based
in China, Haier which now supplies their products all over the world (since growing in the
industry, in the early 2000s) started distributing household appliances in the 1980s. By taking
advantage of the increasing industry demand and meeting customer requirements of having
products readily accessible at any time and any place (Hamel, 2000), Haier, is one of the best
household appliance companies, being ranked in the top five in the world (VK, 2016). In a
workplace, it is critical to have a proactive management team and a management theory that
best compliments the business place. This positions the manager to have a more resourceful
workforce, therefore; resulting in greater productivity for the company (McQuerry, 2015 ). Due
to having a high percentage of failures in their products, Haier hired Zhang Ruimin a leader
that is valued greatly around the world (Ye, 2003 ) to increase product quality and team
initiative, alongside; introducing a new management theory.

The implementation of the new management theory saw the business grow and gain
acknowledgement as one of the worlds finest appliance manufacturer, as well gaining an ISO
9001 approval in 2008. One of the prime goals of introducing a new management theory was
for employees to have a 1% increase of what was achieved during the previous
day (Schermerhorn, 2017). To accomplish the goal Ruimin had set he implemented a
Western Management Theory recognised as the OEC management-control system. As the
company was still based in China, he observed the way of life of Chinese people lived and
found that implementing a tough management system that offers workers with rewards is a
viable system to have to achieve maximum performance (Lin, 2005 ). Despite having
implemented new management techniques, a clear control problem is still detectable. Haiers
employees began becoming competitive and lacking initiative, the synergy that arose
throughout the workplace was problematic. Despite businesses style of operating and
technology advancing, it is still highly important that a management system Is in place to have
an efficiently run company. (Otley, 1994 ). Finding control in the workplace is crucial to create
a well-run environment which encourages employees to give full potential, and leave
customers with a good impression. With a lack of control, problems in the workplace arise as
feelings that are triggered by control issues, alongside other problems, are major causes of work
stress and pressure (Lacovides, 2003 ). With the burden of employees feeling under pressure
and experiencing competitiveness, due to the control issues that are prominent in Haier, this
creates an unhealthy environment to work.

2. Discussion
2.0 Concurrent Control

Practise Concurrent control is a management technique that monitors an individuals

behaviour, assuring they are adhering to set protocols and regulations set by the workplace.
The monitoring of the individual occurs in real time, often when one is completing a task, with
the goal of making obligatory improvements and eliminating error in the
workplace (Dontigney, 2017). One way companies implement the concurrent control in
management technique is by MBWA (Management by walking around). Management by
walking around emphasizes the importance of the interpersonal contact, open appreciation and
recognition, being one of the most important ways to build civility and performance in the
workplace (Serrat, 2009 ). MBWA is a practice has gained attention by companies around the
world, particularly, science and business practices. (Luria, 2012 ). Having effective workplace
policies and procedures is a critical part of changing workplaces today (NSW government,
2013 ). By having a manager on the floor working with employees to assure high achievements,
this then will provide customers with a valuable experience, resulting in sales. Depending on
the type of business or organisation that uses concurrent control, they would all approach it
in a unique way. Haier had an aim that every employee finishes on his or her job every day,
with a 1% increase over what was done the previous day (Schermerhorn, 2017), this therefore
means Haiers would be using MBWA to assess their employees are making the set goals.
By equipping employees with a 3E card and asking them to record their daily process, it is
easy for the management to monitor the behaviour and the work ethic of the employees. By
monitoring employees performance, managers can gather crucial information, which will
assist with future decision making and provide feedback to staff (Henshaw, 2011 ). By
monitoring employees work and showing that you value their contribution to the business, this
will benefit the business, due to employees putting in creditable effort.

2.1 Bureaucratic control

Bureaucratic control is an organisational control system that assists the company and
individuals through applying standardised guidelines, approaches and authentication
measures (dictionary, 2017). To assure peoples behaviour is staying dependable with the
organisations interest, authority, direction and clear job descriptions are put in place. A major
advantage of implementing a bureaucratic control system is that not only are guidelines clear,
authority is conspicuously centralised, as well as having comprehensive job descriptions in
place (Johnson S. , 2015 ). By having a clear unity of command, this is beneficial to a
business as ambiguity and confusion is eliminated (Chand, 2016).

It is noticeable that Haier has implemented certain elements of bureaucratic control, into their
management style, in attempt to better the company. We see that Zhang Ruimin was employed
as the CEO to implement a better style of management, and have someone who is of
authority. Having authority is vital as employees and customers know who to consult
problems, or propose ideas with (Doucette, 2015). By efficaciously making use of the 3E card
(a card which records all work conducted by employees), analysing employees behaviour to
see if they are meeting the businesses guidelines and procedures is made simpler. Policies and
procedures are a critical part of making sure all individuals know what is expected of them and
a large part of guaranteeing a steady bureaucratic control structure works (Power, 2012 ). By
advising employees that it is expected of them to make a 1% increase in what they achieved
the following day, this means a clear and consistent response across all staff is
developed (Power, 2012 ).
 3. Recommendations

By analysing the research that has been done, it is clear to see that having control is crucial to
have a commendable organisation. To accomplish and maximise the organisations proficiency
and productivity, having an operative management control theory in place is critical (Ashe-
Edmunds, 2016). Only certain elements of both the theories that have been analysed in this
report, are prominent in management style that Haier uses. To increase the companys
credibility, the company could start a reward program that offers benefits to customers who
give the company a review. This would not only assist customers who are loyal to the company,
but would also give the management team of Haier an insight to what customers think, and
could assist them in future decision making.

Because of focusing highly on individual performance, the teamwork within the company is
suffering. To stop the teamwork of Haier suffering, more focus should be put on not only
receiving individual goals, but also goals as a team. A system where team work is encouraged
and an overall team goal to be achieved by the end of the month could be implemented, which
would result in the team to work more efficiently. It is understandably obvious, that for an
organisation to run smoothly, and achieve goals, alongside being a commendable organisation,
teamwork needs to be implemented (Baker, 2006). The company could improve the teamwork
issue, by sending out an email, or leaflet that explains to employees the need for good team
communication, and reassure them that all staff is equally valued by the company.

Another way Haier could benefit their company is by implementing more elements of
concurrent control. Management by walking around is a wonderful technique that not only
assists managers in monitoring the workplace, but also builds a stronger relationship with the
staff and customers. By monitoring daily, the work of the staff, it is easy to analyse if they are
doing their work in adherence to company standards and build a relationship. Customers will
see this relationship between staff and employees and this is will make their experience at Haier
better.
 4. Conclusion

It is clear to see that Haier is a world leading company in terms of household electrical
appliances. The company was struggling after being struct with poor failure rates in products
and poor managerial techniques, this was changed once a new CEO was hired and implemented
a new management control system. Although the company improved its sales, and acted on the
poor control, there are still complications. By using recommendations and learning more about
different control systems, Haier could overcome all problems faced.
 5. References

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