Abstract

Rendanheyi, meaning integration of people and goals, was a platform of management practices implemented by China-based Haier Group. It helped the company transform from a conventional appliance manufacturer to an entrepreneurial company that was highly responsive to customer needs, and thus achieve ‘zero distance from the user’. Introduced by its CEO, ZHANG Ruimin (Zhang), Rendanheyi was implemented in several phases lasting over a decade. In each phase several new practices were introduced which challenged the existing conventions of the way organizations were run. Rendanheyi changed Haier from a huge conglomerate to a highly nimble company of several microenterprises, each run by a CEO, and operated with its own agenda. Over the years the model became more encompassing, and Haier collaborated with customers, developers, research organizations and universities, and even competitors, in order to provide customers with what they wanted. For the next phase Zhang was looking at taking advantage of the Internet of Things (IoT), and using the gathered user data for user engagement and feedback, customization of products, and integration of users into manufacturing processes. It remained to be seen if Rendanheyi would be adopted by organizations across the world.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the concept of corporate entrepreneurship and examine its evolution.
• Study the drivers of management innovation in organizations and understand how companies can benefit from innovations.
• Examine the role of corporate entrepreneurship in driving innovation and see how it can be sustained.

Keywords

Haier; Transformation; Leadership; Change Management; microenterprises; entrepreneurship culture; co-creation through internet platforms; Internet of Things;