Haier, a Chinese multinational consumer electronics and home appliances company, has been on a transformational journey for 30 years. Its radical approach to management, called the “Rendanheyi Model”, has been at the core of this change. This model eliminates middle management, instead dividing the organisation into small, self-managing units called microenterprises (MEs).
Each ME operates as an independent start-up with its own profit and loss responsibility. Haier’s 4,000 MEs are encouraged to innovate and compete with each other. They are free to choose their projects, set their targets, and decide how to achieve them. This autonomy has led to impressive innovation and growth.
Haier’s employees are not just workers, but also entrepreneurs. They can choose to join an existing ME or create a new one. They are also shareholders in their MEs, which means they directly benefit from their success. This unique approach has been successful, with Haier becoming the world’s largest white goods manufacturer.
Haier’s radical management style has caught the attention of academics and business leaders worldwide. Many are studying it as a blueprint for the future of work. Despite its success, Haier continues to evolve, constantly challenging traditional management ideas and pushing for further innovation.
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