Market Economy Model of Chinese Management -Case of Haier-

Abstract

To explore a new style of Chinese management by the case study of Haier is the objective of this paper. Haier is the largest consumer electronics company in China. Wages of workers are only based on piece rate and determined by the rightly done jobs and the defects in their jobs. The evaluation of workers for wages is individualistic, instantaneous, quantitative, monetary, competitive and open. There is practically no room for discretional evaluation by supervisors and managers. Engineers who want to become the heads of new product development projects apply for the position with new product development plans (open competitive bidding). The salary of project managers and their subordinate engineers is determined by the market performance of new products such as the sales, the quality claims from customers and the costs of new products. Haier's management is based on the market principles of economics. It is the market economy model of management. And it is spreading among growing Chinese companies. We may say that they are more capitalistic than Japanese companies and even American companies.