Haier in Japan

Group 3
Deqsha Novendra (2006488612)
Patricia Devina Anandaputri (2006488682)
Pricilia Devita Anandaputri (2006519750)
Vivi Sofiana(2006490352)
Content
1. Case Overview
2. Theory
3. Trigger question
4. Recommendation
 Company Background and Development
09

CASE OVERVIEW
1984- 1991- 1998- 2005- 2012-
1991 1998 2005 2012 Present

Brand Building Diversification Internationalization Microenterprising

Globalization

Haier's transformational journey in Japan, which began with the acquisition

of Sanyo Electric's home appliance business in 2012. After the acquisition,
MAIN STRATEGY: Haier implemented a new organizational structure based on the principles
HAIER CONCENTRATED ON of self-managed units (ZZJYT) and the Rendanheyi principle. This new
MANUFACTURING BETTER-QUALITY OF structure allowed employees to behave like they were their own bosses,
PRODUCTS
making their own decisions and taking responsibility for their own
performance
 Stages of Expansion
Diversification Internalization Microenterprising
the natural
acquiring underperforming a focus on entering
evolution of the self-
Chinese companies with difficult, mature markets,
advanced technology in like Europe and the US, managed units, charged
home appliances and before easier markets with the task of
implementing the OEC achieving their own
approac performance by making
their own decisions

HAIER'S TRANSFORMATIONAL JOURNEY IN JAPAN, WHICH BEGAN WITH

THE ACQUISITION OF SANYO ELECTRIC'S HOME APPLIANCE BUSINESS IN
2012
THE CONCEPT OF SELF MANAGED
UNITS
Definition: an inverse triangle of traditional top management level
This new structure allowed employees to behave like they were their own bosses,
making their own decisions and taking responsibility for their own performance

self-managed units for marketing ing and R&D functions that would directly face
First level customers.The employees didn't get orders rs from executives but actively listened
to the market

comprised a number of platforms to support first-level ZZIYTs, induding R&D, human

Second Level resources, finance and accountin

identifying and formulating strategic opportunities that ZZIYTs at the first level might
Third Level not be in the best position to ascertain
RELATED THEORIES
NEOCLASSICAL
01 GROWTH THEORY
Countries with higher levels of physical and
human capital, efficient markets, and
technological advancements tend to experience
faster economic development.
INSTITUTIONAL
02 THEORY
Formal institutions (laws, regulations, property
rights, governance structures) and informal
institutions (cultural norms, social values,
traditions) impact economic development.
They shape economic behavior, investment
decisions, and market effectiveness.
03
HUMAN CAPITAL
THEORY
Countries that invest in human capital
development through education and training
tend to experience higher productivity,
innovation, and economic growth.
COMPARATIVE
04 ADVANTAGE
Comparative advantage teveloped by David
Ricardo, suggests countries specialize in
industries where they have a relative advantage.
This leads to increased efficiency, specialization,
and economic growth through trade.
CULTURAL & SOCIAL
05 CAPITAL
Cultural and social factors, including values,
social networks, trust, and social cohesion, can
influence economic development.
THEORIES RELATED
TO THE CASE
NEOCLASSICAL
01 GROWTH THEORY
Haier’s focus on capital
accumulation, technological
progress, amd labor productivity.
The company has invested in
RnD, innovation, and advanced
technologies to enhance its
product offerings.
By leveraging efficient markets
and technological advancements,
Haier has contributed to its
growth and success in Japan.
INSTITUTIONAL
02 THEORY
Haier’s understanding and
adaptation to the institutional
environment in Japan.
The company complied with local
laws, regulations, and industry
standards, building trust with
stakeholders.
Haier's navigation of formal &
informal institutions in Japan
contributed to its positive
reputation & market acceptance.
HUMAN CAPITAL
03 THEORY
Haier’s investment in human
capital development is in line with
human capital theory.
The company has priortized talent
acquisition, training, and
development programs in Japan.
By enhancing the skills &
knowledge of its employees,
Haier has increased productivity,
innovation, and competitiveness
in Japanese market.
 COMPARATIVE
04 ADVANTAGE

Haier’s focus on specialization and leveraging its core

THEORIES competencies which aligns with comparative advantage theory.

RELATED TO The company has identified its strengths, such as technological

expertise and customer-centric approach, and applied them
THE CASE strategically in Japanese market.

Haier’s ability to offer unique & differentiated products has

contributed to its competitive position in Japan.

05 CULTURAL & SOCIAL CAPITAL

Haier has adapted its products, marketing strategies, and business practices to align with
Japanese cultural values and preferences.

By building relationships, fostering trust, and engaging with local stakeholders, Haier has
leveraged social capital to gain acceptance & establish a strong presence in the Japanese market.
 Previous Strategies
Haier strategy in difersification period:
Acquisition of over 20 Chinese
companies (1998):
Acquired mostly Chinese companies that had a weak
management but owned advanced technologies and
succesfully turned them around
Introduced the OEC approach
Practice of planning, executing, and
clearing every task and performance
dimension on a daily basis.
Haier group in Japan
Internationalization period
Entering the most difficult market first and later
the easier one
This strategy adopted, is rationale because entering those
market would force bigger improvements and much easier
expansion to the rest of the world
On the globalization era (2006-2012)
The concept of Self-Managed Units (ZZJYT)
Haier differentiated between three levels of units
The first level: manufacturing, marketing, and R&D functions
The second level: Human resource, finance, and accounting
The third level: identifying and formulating strategic
opportunities
A new organizational structure based on the principles of
self managed (ZZJYT)
Some units even functioned to some extend as
microenterprises
People saw a positve future for the company
 RECOMMENDATION

Partnership and Localization Talent investment

Collaboration
Collaborating with local Respect the Japanese culture Atrracts and training young
businesses, fostering and innovate products and talent who were and has a
partnerships, or alliances that strategies to suit the specific mindset of entrepreneural, has
can offer insights into the needs and preferences of the decision-making skills, and has
Japanese market Japanese market a knowledge of market and
products
So they could create their
own microenterprises within
the Haier ecosystem
TRIGGER
QUESTION
(Class Activities)
Q1. WHAT ARE THE KEY FEATURES OF HAIER’S CULTURE? WHAT ROLE DOES
THIS CULTURE PLAY IN HAIER’S JOURNEY TO EXCELLENCE?
Rendanheyi principle
The principle focuses on aligning employees' capabilities with the value they create for users and resources, is at
the core of Haier's culture. It redefines the organization as a network between users and employees, emphasizing
the integration of employees' capabilities with customer needs and value creation.

The culture also emphasizes the importance of self-managed units, where employees are empowered to make
their own decisions and act as microenterprises. This structure fosters a more entrepreneurial and performance-
driven focus, allowing employees to take ownership of their work and be accountable for their own success. The
meritocratic compensation system further motivates employees by linking individual performance with rewards,
reducing fixed salaries and offering potential for greater variable gains.

Fostering a sense of ownership, agility, and proactivity among employees. It encourages

Role
them to think in terms of what they can do to achieve global leadership and meet customer
needs.
The culture also promotes collaboration and knowledge sharing among microenterprises,
leveraging the capabilities and resources of the entire Haier group. By aligning employees'
capabilities with customer value and providing a supportive ecosystem, Haier's culture
enables the company to continuously improve and excel in the global market.
Q2. WHAT KIND OF TENSIONS COULD ARISE FOR HAIER WHEN IMPLEMENTING
THEIR MANAGEMENT SYSTEM IN JAPAN
SCORE
China Japan Tensions that Could Arise
China scores higher than does Japan in terms of power distance. Therefore, China
Power typically goes with a hierarchical frame and Japan tends towards an egalitarian
Distance outlook. However, conflicts may appear if Japanese workers are not comfortable
about a system that appears too authoritative or hierarchical

China scores lower in individualism (20) than Japan (46), which means that Japanese
Individualism/ culture places a higher value on individual autonomy and freedom. Haier's
Collectivism management system, which may emphasize collective efforts and team dynamics,
might clash with the individualistic tendencies of Japanese employee

Japan has a much higher uncertainty avoidance score (92) compared to China (30).
Uncertainty
Japanese employees may have a strong preference for structured and well-defined
Avoidance processes, while Haier's system may be more adaptable and open to change

Both China (66) and Japan (95) score relatively high on the masculinity scale,
Masculinity/ indicating a preference for assertiveness and competitiveness. However, the degree
Feminity may differ. Haier's management system, which might emphasize competition and
achievement, could align with the Japanese preference for masculinity
Q2. WHAT KIND OF TENSIONS COULD ARISE FOR HAIER WHEN IMPLEMENTING
THEIR MANAGEMENT SYSTEM IN JAPAN

ZZJYT is currently working in China. With having a low score in masculinity and uncertainty
ZZJYT avoidance, it’s most likely to make sense to the employees. In Japan, they have a score in
uncertainty avoidance along with masculinity, meaning the ZZJYT is going to be very different
from what they are used to.

Japan has a relatively high collectivism score (46) on Hofstede's scale. The self-managed units
Self-Managed
model, which emphasizes individual accountability and autonomy, may not align with the
Units collectivist mindset that values group harmony and consensus decision-making.

Hard concept for Japan to grasp. Ended up starting slow in Japan, but they eventually adopted
Win-Win the ZZJYT strategy. China seems to be comfortable with such, catering to the market and not
the company.
Q3 Looking at the experience in Japan, what type of bridging mechanisms has Haier adopted
to convey its management system and culture, culturally integrate its foreign operations, and
further develop its own system?

Employees feeling after the acquisition:

FEAR OF
INSECURITY THE FUTURE

Bridging mechanism that has Haier adopted:

frequent trips and visits between member of Haier HQ and Haier Japan for the development of
mutual understanding and task
Japanese employees have also spent time in Qingdao to learn from their Chinese counterparts and
obtain a broader picture of the business beyond their immediate position. These mechanisms have
helped to instill a sense of agility and proactivity in Haier Japan and made it more competitive.
Created three guiding commitees to facilitate communication across areas of new product
development, supply chain, and marketing and sales for the implementation of microenterprises
Atrract young talent who were and has a mindset of entrepreneural, has decision-making skills, and has
a knowledge of market and products so they could create their own microenterprises within the Haier
ecosystem
Q4. What types of cultural challenges might Haier face in other cultures? What would you
suggest that Haier improve in order to better manage the cultural complexity of its global
footprint? Use a conceptual/theoretical framework from the textbook to explain your analysis.
Challenges
Differences in Cultural Norms and Management
Communication Styles Values Practices

Hofstede’s Cultural Dimensions

China Japan
Japan has a relatively high power distance, where respect
Japan has a long-term orientation. Haier should adopt a
for authority is emphasized. Haier may encounter similar
Uncertainty patient and strategic approach in the Japanese market,
Power Distance challenges in adapting to hierarchical structures and
managing authority relationships in the Japanese market.
Avoidance emphasizing long-term partnerships and demonstrating
commitment to quality and reliability.

Japan has a collectivistic culture, emphasizing group

Haier may encounter cultural variations in time orientation,
harmony and cooperation. Haier should promote teamwork
Individualism vs Long-term vs which can influence strategic decision-making,
and collaboration among employees and stakeholders in
Collectivism Japan, fostering a sense of unity and shared goals.
Short-term relationship-building, and expectations for returns on
investments.

Japan exhibits a high uncertainty avoidance culture,

emphasizing the need for structure and stability. Haier Haier may need to consider cultural differences in
Masculinity vs should consider this cultural characteristic and ensure that
Indulgence vs indulgence and restraint, which can impact consumer
Femininity its business practices and products align with the risk-
Restraint behavior, marketing strategies, and product design.
averse nature of the Japanese market.
Q4. What types of cultural challenges might Haier face in other cultures? What would you
suggest that Haier improve in order to better manage the cultural complexity of its global
footprint? Use a conceptual/theoretical framework from the textbook to explain your analysis.
Suggestions
Haier should invest in cultural training and awareness programs
to educate its employees about the cultural dimensions and
Cultural Awareness &
variations they may encounter. This can help develop cultural
Sensitivity
sensitivity and enhance understanding of diverse cultural
perspectives.

Haier should adopt localization strategies that involve tailoring its

products, marketing, and business practices to align with cultural
Localization &
norms and values. This includes adapting communication styles,
Adaptation
product features, promotional strategies, and organizational
structures to address cultural differences.

Haier should focus on building cross-cultural competence among

Building Cross-Cultural its employees and managers. This involves developing skills in
Competence intercultural communication, conflict resolution, and cultural
adaptation to effectively navigate cultural challenges.
THANK YOU!