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UPDATED: October-18-2007 Web Exclusive
CPC Delegate: Harmony Within Company Essential for Harmonious Society
"The relationship between scientific development and building a harmonious society is mutual causality," Zhang Ruimin, CEO of Haier Group, told the press
By HUANG WEI

"The relationship between scientific development and building a harmonious society is mutual causality," Zhang Ruimin told the press at Beijing Media Center on Tuesday afternoon. Zhang is Chief Executive Officer of the Haier Group and delegate to the 17th National Congress of the Communist Party of China (CPC).

As head of the world's fourth largest whitegoods manufacturer and widely regarded as an eminent representative of the "new social stratum", Zhang was invited to explain the role a company should play in the building of a harmonious society.

The aim of building a harmonious society, according to Zhang, is to make a better life for everyone. "When it comes to business, how can a harmonious society be built if my company loses money?" he queried.

In fact, he stated, the aim of a well-operated company is in accord with the aim of building a harmonious society.

"There are two things crucial to a harmonious company," he said. "One is to make every effort to put additional value to your products, so that the company will have stronger earning power; another is to make your employees realize their value.

"The latter is extremely important to the electrical appliance industry."

In this particular industry, it is almost a common phenomenon when manufacturers earn little money, or even worse, lose it. Under such circumstances, plenty of companies cut employees' salaries, which provokes complaints in return. Most entrepreneurs scarcely think about how to create a favorable environment for the staff. As a result, the relationship between staff and the company is purely employment-based.

From an entrepreneur's standpoint, Zhang compares the relationship between staff and company to a coin having two sides.

"On the one hand, you must spare no effort in making your company earn more money," he said. "On the other hand, you have to make your employees conscious of their own value. These two factors complement one another. Your products will be more competitive if your staff is conscious of its value and becomes more creative.

"A profitable company in return will create more opportunities for the staff. Based on such a starting point, creativity plays a crucial role."

So far, human resources rank first on the Haier Group's agenda.

"The concept of the use of human resources is changing, as the Haier Group develops," he declared. "In the past, we set objectives based on the staff we already had; but today employment standards tend to be based on the aims and achievements that we want. For example, some management positions in our company are open to intellectuals worldwide, and many employees come from the United States and Europe."

The route to building a harmonious company in a harmonious society, according to Zhang, is by realizing the value of man.

"Ordinary employees in Haier Group will have access to training courses in Haier University," he said. "Moreover, we will name the invention after the inventor if a member of the staff creates a DIY thing. This is a step forward in respecting them as well as their creativity, which in return will stimulate their creativity much more."

Profile of Zhang Ruimin

Chairman of the Board of Directors, CEO and Party Chief of Haier Group. Born in January 1949 in Qingdao, in 1984 Zhang was appointed as the Director of Qingdao Refrigerator Factory, a small factory with a debt of 1.47 million yuan ($182,759). Zhang began the company's turnaround with an order to destroy 76 defective refrigerators, laying into one himself with a sledgehammer -- now preserved for its symbolism in Haier's museum. That singular act of destruction impressed on employees that poor quality would not be acceptable. He reinforced the message with an aggressive Western-style quality control program. The factory has since grown to become what is now known as the Haier Group, China's top home appliance brand name.

Zhang works over 12 hours every day, and has few weekends or holidays on his schedule. Thursday is usually his day off if he has a business trip, for he can make better use of the weekends to work and be back in the office on Monday.

He writes a diary, and is fond of reading. His favorite books are Lun Yu (The Analects of Confucius), Dao De Jing (The Moral) and Sun Zi Bing Fa (The Art of War by Sun Tzu). Matsushita Konosuke and Jack Welch are among the people he admires most.

Background of Haier Group

Haier is the world's fourth largest whitegoods manufacturer and one of China's Top 100 IT Companies. Haier has 240 subsidiary companies and 30 design centers, plants and trade companies. It employs more than 50,000 people throughout the world. Haier specializes in technology research, manufacture industry, trading and financial services. Haier's global revenue in 2006 was 107.5 billion yuan.

Haier's market share in the electrical appliance sector in China in 2006 -- according to statistics from China Market Monitor, China's leading market research institute -- is 25.5 percent, which makes the company number one in its field. Moreover, the Haier Group ranks foremost among the 25 most honorable Chinese companies, in the cover story of Forbes (Chinese edition), October issue. It also remains number one in the electronic industry and the electronic appliance industry, according to Forbes (Chinese edition).



 
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