In this 2 min video, I explain the one thing everyone should know about how China became economically so successful. Huawei is just an example of a larger story.
By Xiaobo Wu, Johann Peter Murmann, Can Huang, and Bin Guo
The book is coming out in April 2020.
Huawei has become China’s most prominent multinational company and a leader in the ICT sector. Given unprecedented access to the company, the authors of this book examine the management transformation of Huawei from its inception in 1987 until 2019, observing in detail not only the creation of its organizational routines but also the breaking of routines across most major functional areas: management, product development, HR, supply chain, finance, R&D, intellectual property, and international business. “Dynamic capabilities” are central to theories of competitive advantage and this book highlights Huawei as an ideal case study for the successful implementation of change routines and change-supporting values. The chapters cover all the major change initiatives the firm has undertaken since 1996 to import best practices from the west, with the help of consultants. The insights presented in the book will be particularly interesting for academics in the field of strategy, management, and business history.
More Info on Book.
After reading Jacobides, MacDuffie, and Tae (2016), the success of Tesla in launching a new automobile company in a crowded sector puzzled us. Jacobides, MacDuffie, and Tae (2016) had convinced us that developing the capabilities to become the manufacturer of a complete, safe automobile system would be quite difficult. Researching the development history of Tesla, we have pieced together the key features of how Tesla achieved its successful entry into the automobile sector. From this we have concluded, based on the development time and costs associated with the Tesla Model S, that a well-funded company could develop a new electric vehicle (EV) from scratch and move it into production within 3 to 5 years, by spending $1–2 billion of capital for design, development, and manufacturing. Without a doubt, increasing production to the levels of mass producers would take much longer, but the Telsa example demonstrates that new entry into the industy has become feasible. Tesla’s trajectory, from start-up on the brink of bankruptcy to a company mass producing electric vehicles within 5 years, raises important questions about the future of the global automobile sector. What would prevent Apple and Google, two companies that clearly have the resources to fund $2B in R&D, from entering the market and contesting fiercely with the dominant OEMs such as GM, Ford, VW, Mercedes, and Toyota? There are already many ventures in the Chinese electric automobile sector, such as BYD, Qiantu, NIO, and many more. Inspired by the success of Tesla, why would Chinese software and internet giants such as Tencent and Alibaba not enter this large market given that Tesla did not have prior experience and was able to get a successful car ready for sale within 5 years? In this perspective piece, we offer our reflections on the implications of the success of Tesla for the dynamics of the global automobile sector. We will appraise the chances that Chinese firms will for the first time become leading players in pushing the frontier of automotive technology, a goal that has eluded them over the past 30 years despite massive government efforts to create strong home-grown auto companies.
There are three commentaries on our articles that make for a very spirited debate.
Finally, Liisa Välikangas provides an introduction to the “Forum on Tesla and the Global Automotive Industry” Management and Organization Review, 2018.
We could have perhaps saved a lot of money in Sydney if we had deployed this new Chinese technology.