By the time I left the military, 186, 286, and 386 had dominated the computer world. The road to success for Huawei started in 1987 where it was founded in the economic testing zone of Shenzhen. It was analog technology, analog automatic control. Enterprises can now transfer their funds in other countries back to the US because of a low tax rate of 12%. He does not only consider this kind of power to be an important personal characteristic but sees it as an essential part of the Huawei culture. However, monopolies in these kinds of technologies will benefit the world, rather than harm it. Then a large number of our employees would resign, but I cannot leave. Arjun Kharpal: I want to go back a little bit to talk about the US-China trade war because Meng Wanzhou was arrested in Canada on behalf of the US authorities. The billionaire founder of Chinese telecoms equipment giant Huawei rarely. I only care about the growth of my company. Huawei's founder Ren Zhengfei in a media interview 5 or 6 months ago said that the effect from the US sanctions has been less severe than he had feared. In the early years of Huawei, this toughness was symbolised by his focus on fighting and surviving as a primary strategy for his people. So there is no need to worry too much about some comments posted on the Internet. Nevertheless, Zhengfei remained persistent in talking about his ambitions at all kind of occasions. Before I was able to settle into this new position though, China disbanded many of its military forces and everyone had to go find another job. And he left other core aspects of the business, such as steadily improving the retail offer (Every little helps), untouched. Specifically, in this section the leadership style of Huawei will be analysed, as well as its impact on the employee engagement and overall organisational performance, and findings and discussions will be presented. It incorporates respectability well and great lead . But even if it did happen, it would be at least 30 years from now. More and more companies are harnessing new technologies more quickly. This selective messaging was not popular, but it was highly effective. Arjun Kharpal: A bit about the US market. And its founder Ren zhengfei is thought be be one of the best leader in the business world. The US doesn't need to conquer the world through violence. Is that the right way forward? "Every generation produces its own great character, and each exerts impact for hundreds of years.". 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I had thought that this was an Internet rumor initially, so I said that without much thought. It's a wealthy country, so it has a lot to lose. I stuck our 180,000 employees together, and encouraged them to forge ahead. For example, in the desert and rural areas in China, rats were a plague for the telecom connections to customers. We live in a very connected world. As a result, I read a lot of books on law and learned that the market was about two things: the product and the customer. Our subsidiaries in other countries also have this relationship with local governments. We will need to sort out our problems with the US by ourselves. How do you respond to some of these very, very strong criticisms from governments around the world? What Industries are the Best Teachers for International Managers? Second, Huawei is being stuck in an extremely difficult situation the US is launching intense attacks against us. You have entered an incorrect email address! November 12, 2015. Underlying these beliefs is clearly an idea of sharing responsibility but also sharing the rewards that are earned because of these collective successes. This was because we were never intended to engage in military operations. Is only slower computing good for us? Today, only 30 years later, ultra-broadband has become accessible in most rural areas around the world. After he reduced taxes, he should have been friendlier to other countries and try to convince everyone that the US is a great place to invest. If a technology is 20,000 kilometers away, we can invest a little more, like an apple. The Opportunities and Challenges of Global Teams. Looking at the Fortune Global 500 list, Huawei is the only mainland Chinese company (out of 91 Chinese companies listed) earning more revenue abroad (67%). Living in such extremely harsh conditions and working on such a highly modernized project was really a good experience for me. CNBC is a division of NBCUniversal. In particular, we will build the simplest networks, ensure cyber security, and protect user privacy. Even with those qualities, many leaders fail at the top job often because they dont know how to get the organization to do what they want. Register as a Premium Educator at hbsp.harvard.edu, plan a course, and save your students up to 50% with your academic discount. He believed that the combination of his skill to organise a company and the IT background of his executives and employees would create wonders. Mr. Ren: First, it's understandable that government leaders would take pride in the great companies of their country. Firstly, being practical instead of seeking after useless fame. although employees even management employees were not used to it, since it need a thorough change. February 9, 2021. Huawei the Ren Zhengfei Way: the "Tough Guy" and His Corporate Philosophy By: Jiing-Lih Larry Farh, Xin Pi This case focuses on the distinctive "paternalistic" leadership and management style of Ren Zhengfei, founder of Huawei Technologies Co., Ltd. (hereinafter "Huawei") and considers whether he needed Length: 13 page (s) We'll buy them directly." Recommended Lists: Scorpio Entrepreneurs None. We obviously couldn't control our customers, so we had to get hold of the products. We can give you a copy if you want. Take machine translation as an example. One of the consistent qualities that have been attributed to Ren Zhengfei is his ability to inspire others. Arjun Kharpal: So would you say the US is scared of Huawei? As a result, we set our prices at a relatively low level, which made it hard for Western companies to compete with us. Ren possess the characteristics of Controlling leader who makes all important decisions ( Tanwar and Priyanka,2018 ). In that case, billions of dollars would be stuck in the US. Ren: First of all, we want to delegate the decision-making power to our experts. It takes a lot to get to the top of an organization: a high IQ, emotional intelligence, technical competence, and a variety of personal characteristics, such as fortitude and resilience. Arjun Kharpal: And part of that R&D budget has gone into 5G, into chips, you've got your own 5G chip. To reinforce the message, he sent congratulatory emails when faculty had acceptances in such journals (but not for acceptances in academic publications). We will rush towards and focus all of our efforts on this technology. Sheryl Sandberg is well-known for combining social skills and intelligence in a way that allowed her to break up the boys club at Facebook. This is thanks to Trump. Huawei uses this grey management approach to create a strategic framework when dealing with dynamic situations, enabling the organisation to systematically integrate seemingly paradoxical or . He has maintained the company as private and his management style has been extremely We just wanted to produce some small things that could easily be sold. The country paid little attention to technology and knowledge, but we were working on a project that required technology and knowledge. In particular, the emergence of AI has accelerated social progress. In 2019, soon after Metro Bank revealed an accounting error involving the misclassification of more than $1 billion in loans, Hill resigned. When Huawei dominated the domestic market on a large scale, its problem in human resource was more than Huaweis original management system can handle. As can be expected of a man with an army background he served in the Peoples Liberation Army he is known to be intense and tough and never loses control. As the dean of Rotterdam School of Management (RSM), one of us, George, set the strategic objective of persuading faculty members to publish in practitioner journals like HBR and MIT Sloan Management Reviewin addition to academic journals. We invest heavily in our focus area. Its success stems in no small part from its ethos, "the wolf spirit of Huawei," created by founder and chairman Ren Zhengfei at the start. But there are still more than 180,000 employees working at Huawei. As he spent decades building one of the biggest tech companies on the planet, Ren Zhengfei kept a low public profile. Over the next five years, we will invest more than 100 billion US dollars in R&D to restructure our networks. Mr. Ren: Huawei is based in China. Huawei is to a large extent no stranger to this system. So he emphasized action. And it needs to be communicated widely. I could not keep up with the times. According to him, Huawei should be focused on building a company where peoples minds are the main asset and resource to rely on. For more information, visit www.cnbc.com. For that reason he looked for alternative ways to attract customers. Wearing nice clothes or seeking further education was not what I wanted. But I don't think Huawei can help solve the disputes between the US and China. The number of Chinese companies investing and engaging in acquisitions in Europe has seen a steep growth curve. Huawei has indeed invested considerably in creating a learning driven culture where the power of the mind is visible. 5. Some governments have criticized the relationship between Huawei and the Chinese government. Secondly, we need to pay taxes to the Chinese government. It allows a leader to impose expectations and define the outcomes. I said I couldn't even imagine what it would look in two or three years. Ren has been described as more of a spiritual leader than a hands-on executive. An interesting consequence was that because of this purpose-driven strategy they acquired much experience in developing robust equipments and materials, which helped them later on to win several big business accounts in the Middle-East. His company reflects these traits. Do you still feel Europe is open to Huawei, or could one country blocking Huawei mean that the whole union stops Huawei from participating in 5G? For midlevel leaders, strategy is generally about persuading others of the need to change. But our strategy of focused investment never changed as our capital grew. The story goes that Zhengfei was so moved by the work done in those labs that he cried. But by 2003 Sainsburys had followed suit by which time Tesco had a five-year head start and an expanding user base. Mr. Ren: If they aren't scared of us, why are they advertising for us everywhere they go? He realized he would not be able to institute rapid change through persuasion, because the national culture emphasized slow, intensive consensus building. Huawei is to a large extent no stranger to this system. In the fiscal year of 2014 Huawei reached an all-time high sales revenue of CNY288.197 billion (US$46.515 billion) and CNY27.866 billion (US$4.49 billion) in net profit. Do you think that companies like yours are too powerful and need to be regulated? Add copies before, China Europe International Business School, A Better Way to Manage Corporate Alliances, Primerica: Sandy Weill and His Corporate Entrepreneurs, J. C. Penney: Activist Investors and the Rise and Fall of Ron Johnson, Competing in the Age of AI: Strategy and Leadership When Algorithms and Networks Run the World, Buy 5 - 10 He created a new position, director of external relations, and placed that director and the director of marketing on the management committee. Therefore, we will count on the law to address these issues. It is good for society and can greatly increase social wealth. In fact, we have too many. I lived through the great famine that hit China, and the economic recovery that followed. So he and his managers smashed the defective appliances. Ren's own military experience shaped Huawei's early corporate culture and management structure. Smartphone was badly hit. If a technology is just several thousand kilometers away, we will invest a lot more, like a watermelon. Will Europe understand us when they see how much effort we are putting into this? This case focuses on the distinctive "paternalistic" leadership and management style of Ren Zhengfei, founder of Huawei Technologies Co., Ltd. (hereinafter "Huawei") and considers whether. All references must be sourced to a "CNBC Interview'. We cannot deny the role that enthusiasm plays in the procedure. The US has highly developed technology, but it also has a shortage in labor. The authors describe seven characteristics of Zhengfei's leadership style, including 'adaptive vision', 'humble dedication' and 'winning by cooperating'. We set prices based on our costs, which were relatively low. China also didn't have its own testing instruments, so I invented one. Ren zhengfei himself attributes his success to several characteristics. There was no chance for us to step back and start another business. When I look back on how Huawei developed in the telecom market, we actually made some missteps. Your email address will not be published. Huaweis competitors assumed that they only had to provide the technology to the customer. These cookies will be stored in your browser only with your consent. There is nothing else that I want to share with him. It's not up to me to designate a successor. He has maintained the company as private and his management style has been extremely . Mr. Jobs was great not because he created Apple, but because he created an era, the mobile Internet era. Mr. Ren: Huawei's future iterative succession system is clearly defined in our Articles of Governance. But opting out of some of these cookies may have an effect on your browsing experience. I had a vague feeling at the time though, that the communications industry was about to explode and so I started looking for opportunities in this market with tremendous potential. The railway and machinery troops were let go along with us. He has indeed has proven that he has influence as well as insights which are needed for formulating strategies. Why cannot we edit human genes? Arjun Kharpal: You said you've not had any communication with Donald Trump. I think it's the right thing for them to do. Many of them thought at that time that he was crazy. When I was young, I had no ideals. For the rest, let the organization keep doing what it does well. Huawei, one of the biggest company focusing on making communication tools like cellphones, is famous all over the world. This fact inspired him to embrace the idea that one can win and still be cooperative. He took. For example, In the UK, Huawei has put much effort into convincing the British government and general public that they and their procedures can be trusted, by (a) Setting up the Cyber Security Evaluation Centre in Banbury to ensure the quality of their equipment, and (b) Cooperating with the GCHQ, the UKs signals-intelligence agency, to ensure that the networking equipment and software is reliable and secure. I also participated in a large project that brought equipment in from France. Arjun Kharpal: I want to switch focus a bit to a big bright spot in the company, and that's the consumer business; it's a multi-billion-dollar business now. After I was discharged from the army, I ran into a big trouble at work. I would have to repay tens of billions of dollars in debts. 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