Haier: A Reinventing Giant

The history of Haier can be traced back to 1955 when a group of people formed a handicraft-producers’ cooperative. The Chinese industrial classification described the organization as a Collective Enterprise (CE). A CE was formed by a group of skilled laborers or entrepreneurs who wanted to commercialize their skills. The profits and assets in the CEs were held by the state. CEs were, however, considered inferior to the state-owned companies because of their low cash reserves and enterprise size . (Refer to Exhibit I for more about China)

In the year 1958, the handicrafts producers’ cooperative was renamed Qingdao Electric Machinery Factory and it started producing motors, fans, and other electric products...