CASE # 2 (China Company)
What could be more self-explanatory about corporate values
than naming your business “China Company?” Zhong and Wang are
Chinese characters for loyalty, dedication, and prosperity. It
certainly worked out for the Liaoning Province–based Chinese
aluminum developer and manufacturer.
Founded in 1993, it had total assets of US$3.9 billion. In
2014, the company’s revenue was around 16 billion RMB ($2.5
billion). The company is the largest producer of extruded aluminum
in Asia and the second largest in the world, with its product being
used in many industries—from rail carriages to power plants. From
the outset the business sought to be sustainable, prosperous, and
contribute to society.
The aluminum industry is highly competitive, and China Company
is not only interested in value creation, but also in encouraging
its customers to expand their businesses. The company is looking to
expand their operations in Europe and the U.S., with Lu Changqing,
the executive director and vice president saying, “We’re actively
seeking cooperation in Europe and the U.S., including potential
acquisitions.”
Employee contribution and a commitment to excellence have been
key to the company’s success. Certain elements— like responsible
corporate citizenship and operation management with integrity—are
built into corporate values. The trick was transforming a corporate
slogan into a corporate reality. In 2012 the Chinese government
certified China Company as a “State Accredited Enterprise
Technology Centre.
China Company was recognized not only for its technology,
leadership, and strategy, but also for the fact that its management
practices were inspirational to other companies in China. Li
Beibei, the director of public affairs of China Company, believed
the award showed that the company’s
achievements went beyond its production and technology. It was
recognized for its innovative business culture, management
practices, and broad vision.
The company’s single principal shareholder, Liu Zhongtian—a
self-made billionaire, who according to Forbes had a net worth of
US$3.2 billion as of May 2015—said the company’s rapid growth has
been a result of “perseverance and determination.”
As a result of its long-held desire for the business to become
a world-class international producer, the company has initiated a
shift toward high-end, high-value-added products. The business has
expanded not only by increasing its production capabilities, but
also through horizontal expansion. This expansion has allowed it
greater dominance in the domestic Chinese market, as well as the
export market.
China Company’s core values are fivefold. First, it tries to
add value and grow alongside its customers; second, it develops its
own talent, particularly in relation to innovation, teamwork, and
pursuit of excellence. Third, China Company wants to create
sustainable earnings growth and reward investors and shareholders.
The fourth core value is to be a responsible corporate citizen and
to do business with integrity, which includes supporting charities
and community events. Finally, it is to establish a business that
is trusted by customers and to retain and develop key employees to
push the business forward into the future. The company also
professes a “customers first” philosophy. Employee training focuses
on responding to customer requirements and changing market needs in
order to achieve high levels of customer satisfaction.
The aluminum business had to position itself carefully,
responding to the demands of the external environment. Rather than
react to environmental issues, organizations like China Company
have taken immediate steps to cut down on energy use and reduce
waste. Globally, the industry can boast that aluminum is the most
commonly recycled metal in the world. Clearly, this approach
permeates enterprises such as China Company as part of its overall
commitment to social responsibility.
China Company is committed to the lifelong learning and career
development of the employees, helping each person to effectively
combine their talent development goals with corporate development.
The company conducted operational and theoretical skill training
for specialized operational personnel; they also worked with local
government bodies to offer Pre-appointment Bridge-up Training,” a
training program for laid-off workers to help develop their
professional skills and operation capabilities. Training programs
were organized with a total participation of 27,470 individuals,
with all staff members having enrolled. To acknowledge the
achievements of the employees, China Company awarded titles of “May
Day” medal and “Workers’ Vanguard” for excellent performance.
As a member of the Hong Kong Stock Exchange, China Company
continues to have great access to potential investment. The company
is ranked first among the major Chinese aluminum companies and
continues to expand. In retaining its core values of commitment,
diligence, responsibility, and innovation, the business has become
a major developer and manufacturer of high-quality aluminum
products in the world, and at the same time reflects thoughtful
response to demands from the external environment.
Case # 2- Discussion Questions
1. What are China Company’s corporate values? How do you think
these values influence the way employees do their work?
2. Using the company’s corporate values, describe the
organizational culture. In which areas would you say that the
company’s culture is very high (or typical)? Explain.
3. How is China Company’s corporate culture maintained?
4. “The right culture with the right values will always
produce the best organizational
performance.” What do you think of this statement? Do you
agree? Why or why not?