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Founded in 1984 by Zhang Ruimin, current CEO of the company, Haier has rapidly grown from a small refrigerator plant in Qingdao, China, to a global leader in home appliances. As one of the most valuable brands in China, Haier designs, manufactures and sells various home appliances including refrigerators, air conditioners and washing machines in over 100 countries. Since 2006, Haier has aggressively expanded its international presence, aiming to turn each localized brand into a mainstream product in its respective market. In line with this strategy, in January 2012 Haier acquired the home appliances business of its long-term partner Sanyo both in Japan and in Southeast Asia, directly challenging dominant market players such as Panasonic, Sharp and Mitsubishi. In addition to addressing potential cultural differences between China and Japan and retaining former Sanyo employees after the acquisition, Haier needed to instill its new management system that CEO Zhang put in place in 2007. Haier had always promoted a performance-driven culture emphasizing individual responsibility and meritocracy. Recently, Haier developed a management system consisting of an inverted organizational triangle with self-managed units. This structure put employees in direct contact with clients and empowered them to take initiative to serve the market instead of responding to orders from a boss. Furthermore, if their performance was superior, young talent could be readily promoted to higher positions than longer-tenured colleagues. However, Haier faced the challenge of this system being at odds with the Japanese tradition of equality, seniority and lifelong employment. Therefore, Japanese workers had difficulty not only understanding but also implementing this innovative system.
The case details the challenges of an emerging-market multinational in developing an innovative management system and implementing it in its foreign operations as the company expanded globally. Specifically, the case focuses on the challenges of national and corporate culture integration that Haier faced when acquiring a Japanese operation. The case lends itself to be used in courses on cross-cultural management, human resource management, organizational change management, and international strategy.