International Analysis of Organization Design

INTERNATIONAL ANALYSIS OF ORGANIZATION DESIGN 1

InternationalAnalysis of Organization Design

Huawei TechnologiesCo. Ltd is a multinational based in China dealing withtelecommunications and networking equipment. The company’sheadquarters are located in Shenzhen, Guangdong. From the year 2012,it is the largest telecommunication equipment manufacturer aftersurpassing Ericsson. Ren Zhengfei founded the company in 1987 afterworking as an engineer with the People’s Liberation Army. In itsinitial years, the company primary operation was the production ofphone switches. With its growth, the company diversification has seenit venture into construction of telecommunications networks, offeringconsulting and operational services and associated equipments toenterprises, and the manufacture of communication devices for endconsumers. The company employs more than 170,000 employees with76,000 employees involved in the company’s research anddevelopment. The company has 21 research and developments institutesaround the world located in countries such as United States,Pakistan, France, Turkey, United Kingdom, Canada, and othercountries. Research and development is a key element of theorganization with the organization investing $6.4 billion in researchand development in the year 2014. Huawei’s products are used inmore than 140 countries and its services are applied by 90% of theworld’s largest telecoms operations. The organization’scommitment to perfection and impeccable organizational culture andcorporate strategies have resulted with the company becoming the onlyChinese company listed on Fortune Global 500 list because it earnsmore revenue abroad than in China. The organization design of Huaweiis critical in ensuring that the organization is successful in theinternational market and analyzing the organization design willhighlight the strengths of the company that has contributed to thegrowth and success of the organization.

ChineseCulture

There are variousChinese cultural elements critical in developing Huawei to itscurrent position in the international market. One of the culturalelements is innovation. The Chinese are behind some of the worldchanging innovations in the world. For instance, China wasresponsible for the innovation of paper, cast iron, chain suspensionbridge, wheelbarrow, gunpowder, compass, sailboat, and porcelain.These inventions have had a profound impact on the way in whichdifferent societies operate. This innovative culture manifests itselfin Huawei where apart from inventing basic telecommunicationequipment, the organization adopts different innovative and creativemanagement elements that have been very critical in the success ofthe company.

The Chinese culturefundamentals derive on a number of aspects including religiousbeliefs, fairy tales, languages, social custom, national tradition,Confucianism, and the thinking mode. This implies that the conditionsthat enable the innovative culture of China are different fromdiverse perspectives. Some of these elements manifest themselves inHuawei’s culture. For instance, it is imperative to note that thecompany has incorporated a more realistic and practical mode ofthinking in terms of its innovation and management. The company hasalso incorporated the Chinese social customs in its approach to humanresources and marketing. These factors have had a positive influenceon the operations of the company, which has subsequently led to thecompany’s success in the international market.

Huawei’sCulture

The characteristicsof Huawei’s organizational culture are associated with itsrecognizance that customers are the driving force of anyorganization’s success. In this respect, the organization has acustomer-first attitude rooted from the founder of the company. Thecompany primary concern is customer satisfaction. Although manycompanies have tried to adopt this organizational mantra, most ofthem do not live it primary because of the need to impressshareholders through increasing profits over ensuring that thecustomers are fully satisfied. It is also important to note that inthe early years of the organization, employees were trained to focuson the customers and if need be, they were allowed to ignore thatbosses (Yan et al., 2016).

Another importantcultural element is employee dedication. In this respect, theorganization instills a culture where employees are trained that toobtain opportunities, hard work is mandatory. The fact that in itsinitial years the employees were given blankets and mattresses toenable them to work late into the night, sleep in the offices, andstart working early the following day attests to this organizationalculture of hard work. These employee sacrifices have been verycritical in ensuring that the organization achieves its objectivesand goals despite the aggressive competition in the market (Schuler &ampJackson, 2014).

The company alsofosters an organizational culture of thinking in the long-term. Theorganization adopts an employee-ownership arrangement that iscritical in attracting and retaining dedicated employees. Thisstrategy also affords the company the opportunity of planning for thelong term. This strategy is also critical in enabling the company tofocus on their long-term vision and goals. Huawei plans the companydevelopment by decade whereas most of its competitors plan by year orfinancial quarter. This is beneficial because the company’s plansare not affected by short-term fluctuations, which affects theperformance of most of its competitors.

Huawei’sOrganization Design

OrganizationStructure

Board of Governance

Theorganizational structure of Huawei reflects on the product /divisional organizational structure. This is type of organizationstructure is characterized by grouping employees, products, services,clients, and regions. The structure is ideal for the organizationbecause Huawei operates in an uncertain environment, it is a largeorganization, and it focuses on customer satisfaction (Guadalupe etal., 2013). This enables the organization to efficiently integrateinternal divisions and handle diversified goals and environmentdemands. The organizational structure of Huawei incorporates variousstructural and systems elements that define the internal system. Thegovernance structure of Huawei incorporates a board of governance,supported by key function committees and departments. There is also aclear definition of business groups under the umbrella of HuaweiCorporation. These business groups have a well share group primarysupport functions. The different departments of Huawei efficientlyadopt the shared service model, which is critical in consolidatingglobal resources. Innovation is critical in the organizationalstructure because without innovation some of the department may failin meeting their objectives.

The organizationstructure of Huawei enables the organization to be agile andinnovative in its adoption to changing business environment. Thishelps the organization to respond rapidly to prevailing markettrends. This is reinforced by the fact that the organization employsstate of the art management systems that are based on ISO9001 andTL90000. Through the application of these international standardssystems, the corporation has enhanced its abilities to self-assessand improve its products and services on a continuous basis. Thesemanagement organizational approaches have enhanced the success of theorganization to such an extent that it is now the leading provider oftelecommunication equipment. These approaches to product developmentand corporate strategies are evident of how the Chinese culture hasinfluenced Huawei. The organization structure fosters innovation,which is one of the primary characteristics of the Chinese culture.It is also important to note that the corporate strategies applied byHuawei reflect on the Chinese cultural elements such as thinking modeand language to ensure that it earns more revenue from outside Chinaunlike other Chinese corporations.

JobDesign

The organizationhas adopted a mechanistic approach to its job design. This can beattributed to the verity that the organization bases its productionon scientific management and industrial engineering. The organizationfocuses on increasing employee productivity, flexibility, andefficiency.

The job design ofthe organization relies heavily on the organizational culture of theorganization. The innovative culture of the organization has resultedwith the organization depending entirely on scientific methodsdesigned to ensure efficiency and precision. In this respect, it isimportant to note that customer satisfaction is the primary objectiveof the organization. In this respect, the organization has empoweredthe employees to contribute to the organization’s products andservices. The organizations invests heavily in research anddevelopment, which is critical in ensuring that the organization’sproducts meet the highest standards and subsequently ensure that thecustomers are fully satisfied. It is also important to note that theorganization designs products that meet the requirements and needs ofthe customer, which ultimately leads to the customer deriving valuefor their money (Yan et al., 2017).

The organizationhas diversified its products to cater for both large-scaleorganization and end consumers. This means that there are differentdepartments mandated to develop products designed to meet theconsumer needs. This also means that the organization has investedheavily in different aspects of product development, which arecritical to meeting the organization’s objectives. This scientificapproach to product development is informed by the mainstream Chineseculture of innovation and adaptability. This reflects on theorganization’s ability to meet its customers’ specifications. Theproduction of high quality products indicates that the organizationis at a position of competing efficiently in the market.

EnvironmentalScanning

Huawei engages inthree fundamental environmental scanning practices: Irregular,regular, and continuous. In irregular environmental scanning, theorganization tends to look at the short-term performance andintroduce changes that will address the shortcoming. This approach isfocused on past performance and offers the organization short-termsolutions. The other environmental scanning practice applied byHuawei is regular where the organization engages in periodicallyupdates studies, focusing on current issues, and address futureimpacts of current events to the performance of the organization. Theother environmental scanning practice and the most important to theorganization is the continuous environmental scanning. Theorganization engages in structured data collection focusing on abroad range of sectors. The primary purpose of this practice is toensure continuity through monitoring for opportunities and threats inthe long-term. This enables the organization to plan in decadesunlike other competitors who plan in the short-term.

The continuous environmental sector scanning is critical in thesuccess of Huawei. The continuous environmental scanning model iscritical in the identification of the company’s core competencies,capabilities, and resources. The company’s competencies,capabilities, and resources are critical for the growth anddevelopment of the organization. However, environmental factors alsoplay a critical role in ensuring that the organization is in aposition of attaining its mission and vision. Some of theenvironmental sectors that are critical to this analysis includeindustry, raw materials, human resources, financial resources,market, technology, economic conditions, legal and regulatoryaspects, political, cultural, socio-demographic, and physicalenvironment. All these factors combine to ensure that theorganization is either in a stable condition or in instablecondition. The environmental scanning also indicates the uncertaintyof the company in different perspectives.

An analysis of theorganization’s environmental sectors reveals that the organizationhas its core competence as being the ability of Huawei to competestrategically in the market. Huawei core competence is its investmentin research and development. This combined with an intensive laborforce present in its home country ensures that the organization has anotable advantage over its international competitors. Theorganization also integrates research and development with itsmarketing staff ensuring that communication associated withcustomers’ needs is efficient and flawless. Huawei also has closeties with the Chinese military, which has been critical in ensuringthat the organization is the only company that serves the Guanxicommunication network. This huge contract enables the organization tomaintain some of its capital incentive projects.

The other importantfactor is that the organization puts into consideration thedemographics that use its products and their financial status. Inthis regards, the organization has identified the fact that most endusers of its devices need high quality products at low costs. This isanother core competence of the organization, which results with theorganization offering low prices for its products compared to itscompetitors. These products are of high quality, which subsequentlyresult with highly satisfied customers.

This indicates thatthe company is stable and competent in the market because most of itsproducts are highly competitive and Huawei has enabled to capitalizeon the environmental factors to improve its efficiency and customersatisfaction (Guadalupe et al., 2013).

The table abovepresents Huawei’s environmental sectors scanning. This identifiesthe right environmental sectors that contribute to the success of theorganization. The environmental sectors that are highlighted asregular indicate that they are primary to the operations of theorganization. The irregular environmental sectors do not have a majorinfluence on the operations of the organization because they cannotbe directly influenced by the organization. However, there are someenvironmental sectors that although they cannot be controlled by theorganization, the organization can realign its operations toinfluence the outcomes associated with these environmental sectorssuch as socio-demographic sector.

HumanResources Systems

Huawei’s organization design also incorporates elements of humanresource management. The company employs more than 150,000 employeesin all countries that the company has operations. The company hasincorporated its innovative nature in its organizational structurehighlights organization’s commitment to the wellbeing of theemployees. The organizational culture influences the organization torely primarily on local employees in its foreign operations althoughat the initial startup of the operations, the organization hiresChinese expatriates. As the organization’s foreign operationscontinue to thrive, the organization increases locals in itsoperations and moves the Chinese expatriates to new operations inforeign countries. This has the effect of ensuring continuity in allregions that the organization has operations.

Chinese expatriatesare critical to the growth of the organization and entry into neweconomies. This motivates the organization to treat the employeesbetter. This is attested by the fact that the organization is notpublicly owned but owned by the employees. The organization’s humanresource approach and employee ownership ascertains theorganization’s employee dedication to meet the objectives of thecompany. The organization also prioritizes employee satisfaction inall its operations throughout the world. The organization understandsthat a dedicated and committed staff is primary to enhancing thecompetitiveness of the organization. In this respect, theorganization has incorporated a number of incentives including theemployee ownership of the company. The employee shareholding strategyensures that responsibility sharing among employees and managementresults with the desired achievements (Bengtsson &amp Wang, 2016).

The human resourcesystem of the organization fosters a culture of self-actualizationamong the employees. In this respect, the organization ensures thatthe employees view the job as a primary element of their lives. Theorganization also ensures that employees are offered full engagementfor their job descriptions. This also enhances the development ofemployees’ full potential and creates avenues for career growthreinforced by organizational support.

Huawei’smanagement style follows the transactional leadership mantra. In thisrespect, the organization is noted for clearly stating what isexpected of employees during their engagement with the organization.The organization also facilitates interaction between human,physical, and fiscal resources, which is critical in ensuring thatcommunication channels are efficient fostering an environment ofgrowth. The management offers benefits to self-interest of theworkers if they contribute positively to the achievement of theorganization’s objectives. The organization has an internal conceptreferred to as the silver handcuff, which ties the employees’performance to the organization’s success and associated employeebenefits including ownership.

Conclusion

The organizationdesign of Huawei has been critical in ensuring that the organizationis one of the leading telecommunication and technology companies inthe world. The organization’s organizational structure isinfluential in fostering growth and development. The organization’sreliance on scientific approach for product development has alsoplayed a critical role in ensuring that the organization is at aposition of continuously improving its products. This is a directresult of Huawei’s investment in research and development. Otherfactors that are critical in ensuring that the organization issuccessful include the human resource system, which focuses onemployee development and wellbeing including employee ownership ofthe company, which enables the organization to distributeresponsibility across different levels. The organization has alsocapitalized on the environmental sectors in the market to ensure thatit has a stable and competent outlook enhancing its competitivenessin the market.

References

Yan, M., Yu, Y., &amp Dong, X. (2016). Contributive roles ofmultilevel organizational learning for the evolution oforganizational ambidexterity. Information Technology &amp People,29(3), 647-667.

Schuler, R., &amp E. Jackson, S. (2014). Human resource managementand organizational effectiveness: yesterday and today. Journal ofOrganizational Effectiveness: People and Performance, 1(1),35-55.

Guadalupe, M., Li, H., &amp Wulf, J. (2013). Who lives in theC-suite? Organizational structure and the division of labor in topmanagement. Management Science, 60(4), 824-844.

Yan, J., Yan, J., Wang, L., Wang, L., Xiong, J., &amp Xiong, J.(2017). Alcatel-Lucent falls, Huawei ascends: new product developmentmakes the difference. Journal of Business Strategy, 38(1),22-30.

Bengtsson, L., &amp Wang, W. (2016). Cost innovation in globalsupply chains: the case of Huawei Technologies. InternationalJournal of Logistics Systems and Management, 23(2),189-208.