Question

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

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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?

Answer 1

1. The China Company’s corporate values are determined by employee contribution and a commitment to excellence has been key to the company’s success. along with those other elements responsible for corporate citizenship and operation management with integrity add the quality to the company's development. The company has changed its corporate slogan into reality.  

The core idea behind this slogan is the contribution of an employee is important, it refers to each one of the employees are important to the company's development and that gives an employee more confidence and comfortability to work in the company.

The second idea is the commitment to excellence is the enhancement of capability of an employee through providing accessibility to develop the idea and implementation. which is one of the best encouragement to an employee to bring out his/her talent for the development of the company. it an advantage for an employee to culture on his talent and get appreciated by the company.

2. a)China Company’s corporate value injected into five core values. First, it tries to value addition and growth with its customers.

b) second, it develops its own talent, particularly in relation to innovation, teamwork, and pursuit of excellence.

c) Third, China Company wants to create sustainable growth and give value to its investors and shareholders.

d) The fourth core value is to be a responsible corporate citizen and to do business with integrity, support its significant contribution towards CSR.

e) Finally, the company follows the philosophy of  “customer first” with the development of the employee. so the core training to the employee is based on customer satisfaction. so the main aim of the company to satisfy and care for its customer.

3. China Company is committed to the lifelong learning and career development of the employees. It helps the employee and the company to develop the talent, which will reflect in corporate development. The company uses to conducted operational and theoretical skill training for specialized operational personnel as a part of corporate culture, also extended to the CSR in terms of working 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 for all staff members around 27470 numbers and awarded with mayday medal and “Workers’ Vanguard” for an excellent performance.

4.  “The right culture with the right values will always produce the best organizational performance.” I agree with this statement as any of these point-like right cultures, the right values, and dedicated employees none of the company can achieve its hight. if anyone of it is missing either culture, value, or employee dedication the corporate value can't be justified. When all three of them work at its optimum level the company will achieve its best.