Management competencies of Lenovo Group

Contents

1.0Introduction 2

2.0 Diversity management 3

2.1 Importance of diversity management 3

2.2 Lenovo and its diversity management practices 5

2.2.1 Diversity workforce management 5

3.0 Globalization 8

3.1 Importance of globalization 8

3.2 Globalization management in Lenovo 9

3.2.1 Supply chain globalization 10

3.2.2 International strategic alliance 12

4.0 Lenovo and its change management 14

4.1 Changes and related issue 14

4.2 Change management in Lenovo 16

5.0 Conclusion 19

Reference 20

Figures

Figure 1.0 Lenovo’s international supply chain………………………………………12

Figure 2.0 products categories in Lenovo Group…………………………………….18

  1. Introduction

This essay is aimed to investigate the management competencies of Lenovo Group in the turbulent business world nowadays, which includes the discussion of the properly used management functions and skills.

The body of this essay is made up of three parts such as the diversity management, globalization management as well as rapid change management, which all include a deliberate investigation of suitable functions and skills of Lenovo’s managers in dealing with the three issues with assistance of evidences from Lenovo’s management practices.

2.0 Diversity management

2.1 Importance of diversity management

As Daft (2010) advocated diversity means all the ways people differ from each other. And for managers there is seemed no choice but to deal with the diversity especially the diversity workforce, which has several reasons as below.

To begin with, in the field of service economy, an increasing rate has appeared in the service industry to have a deeper interaction with their customers in the areas such as banking, finance, healthy issues, travel issues, retailing and so on. While the needs from customers become more and more diverse due to their difference from culture, religion, gender, education background, sexual orientation and so on (McQueen 2007). For instance, as Cascio (2010) mentioned the buying power from people such as African Americans, disabled people and gay people are nearly $1.5 trillion, which for every company in the world is a great attract. That is to say, companies have to face the issue of diversity.

Due to the globalization, companies especially these doing international business face a broader customer market. And globalization also offers customers a wider range of choice from a global context. In another word, it is significant for companies to meet the needs of customers from different world region and to face the more picky requirements from customers. (Guest 2001)

Concerning with the importance of teamwork for an organization aspect, we can get these ideas. Diversity workforces in teams for organizations can be treated as a big treasure due to these differences in personal perspectives, capabilities, working experiences and educational background, more creative and innovative thinks and ideas can be come up with which may result in a better, more qualified, innovative business performance of these organizations. So for companies, it is necessary and also a must to deal with the issue of diversity workforce. (Guest 2001)

At last, when talking about diversity, we often think about firms’ cooperation with international business partners to integrate their resources together into the international field so as to profit more. While implementing this cooperation with international partners, the issue of culture diversity is important for firms to consider and deal with appropriately. A well management in the culture diversity issue may help firms to avoid culture barriers and conflicts when doing business in a foreign countries when their foreign partners and save operation cost as well. (Guest 2001)

By and large, the diversity in world market makes the diversity management a big issue for every company to well manage in the globalization period.

2.2 Lenovo and its diversity management practices

As the new star of world electronics industry and a Chinese company, Lenovo has made great efforts in diversity management to meet the different needs of customers all over the world.

2.2.1 Diversity workforce management

Diversity as the important issue is always valued and respected by Lenovo, the practice of which requires the well used management functions and skills from its managers (Dow Jones & Company, Inc 2006). And the following is the evidences reflecting the management functions and skills used by Lenovo’s managers.

Its diversity policy is aimed to retain and attract diverse workforce in its group and enable these extraordinary talents to spark more creativity as well as innovation so as to enable Lenovo to stand in the leading position of the market place. This perspective of well management workforce diversity cherished by Lenovo reflects its managers’ well trained conceptual skills that they can stand in the height of world market to conclude the importance of diverse workforce to their company in the world market broadening issues and come up the ideas of attract diverse workforce to assist their company’s future development. On the basis of diverse workforce, Lenovo is very skillful at leading these people, in which the splendid leading function and human skill are reflected. (Hu 2007)

On the one hand, Lenovo has launched the program named women in Lenovo leadership to emphasize the importance of female workers in the global range. This kind of program assisted by the human resource process is aimed to improve the work and life balance for its female workers at the global level. With the help of fantastic human skills to communicate, persuade, encourage its workers from its management especially from the human resource managers, a large number of female talents both original ones and new ones have appeared in Lenovo and they began to realize their values not only as a mother and wife but also a necessary member to their organization under all the management’s effort to coach, train and confidence build for them. For example, Ladousse as one of the women leader in Lenovo attended the meeting of women’s Forum for the Economy and Society in France, during which Ladousse’s charming as a female business people received a high applause. Lenovo’s contribution to the well performance of Ladousse can’t be ignored, which is the successful example of the positive outcome of the diversity management in workforces. (Hu 2007; Dow Jones & Company, Inc 2006)

On the other hand, the outstanding performance of Lenovo’s diverse employees in Thailand reflects the positive consequence of the leading function in Lenovo’s management. Because the customers’ needs largely differ nowadays, the marketing manager of Lenovo in Thailand has built a team with both local employees but foreign employees to meet the demands of this market. To lead this marketing team to fulfill their promotion tasks, the manager often uses different measures to motivate and energize these team members. (Hu 2007; Dow Jones & Company, Inc 2006)

For example, in one promotion campaign, there was a competition come up with by the manager to enhance the cohesiveness and creativity of this team. In the marketing promotion campaign, there were two kinds of ideas offered by team members, one of which was to package the sale of the personal computer with a no-eyes teddy bear offered by local employees and the other of which was to tie the sales with a Disney toy. And in the end, the bear with no eyes won more customers in this promotion which largely frustrated those arrogant foreign employees but also made them realize the importance of understand the preferences of customers in different region. And then, the manager held a series of events for these workers from different backgrounds to understand each other better, to cooperate with each other more under the guide of one shared goal that is to help Lenovo gain more market share in the personal computer market of Thailand. Under the right direction of the manager, this diversity workgroup has contributed a lot to Lenovo in Thailand market, which is thanks to the appropriate implementation of the leading function by this manager to motivate its employees so as to achieve the set goal. (Hu 2007; Dow Jones & Company, Inc 2006)

Moreover, the members in research and design labs of Lenovo also reflect the well management of diverse workforce, which is made up of a good mix of both senior engineers and young engineers. The well functioned human skills and leading function of its management are so crucial to manage the labs. To combine the experienced engineers and these creative engineers together, Lenovo’s managers has well balanced their conflicts and dispute with communication skills and lead them to work under a shared goal. With the appropriate built lab groups, Lenovo has become one of the leaders in the world personal computer market already. (Hu 2007)

By and large, Lenovo has done a good job in managing the diverse workforce, which not only helps it become a personal computer giant with a great competitiveness of creativity and innovation, but also attracts a great many working forces worldwide. The future of this Chinese personal computer maker will more prosperous under the help of proper management of the diversity in the globalization era. (Hu 2007)

3.0 Globalization

3.1 Importance of globalization

According to Daft (2010), globalization is the trend of the world economy becoming more and more integrated and a more interdependent system. It has several positive influences. Firstly, it makes people become depending on the market economy more and more as well as makes them began to believe these private capital and resources more. Meanwhile, globalization also makes the role of these international corporations more important especially in the development of several developing countries, which has brought a variety of different opportunities for these countries as well as better accesses to these developed markets worldwide. (Jaikumar & Bohn 2006)

Under the trend of globalization, many a company has made the decision to take the advantage of this trend to expand the business and reach more customers in the global market which includes five reasons at least. (Jaikumar & Bohn 2006)

At first, globalization offers companies more availability of supplies. For instance, many American oil companies have expanded their business outside their country in order to search for the cheaper or richer oil sources. Secondly, referring to the product life cycle aspect, many firms may find such as the cigarette making companies their products may has declined in the domestic market but they can still make profit from oversea business. Thirdly, the lower labor cost in some foreign countries may also drive firms to run their business overseas. Fourthly, there are still many firms entice to do business abroad under the prospect that capitals can be put up by some foreign companies or subsides may be offered by some foreign governments to attract foreign companies in order to create more jobs for domestic workers. At last, in order to avoid tariffs or import quotas, firms may create the subsidiary so as to make products in these foreign countries such as General Electric Company and Whirlpool have produced appliances abroad via foreign subsidiaries. (Ghoshal 2007)

Since there are a variety of advantages for companies to involve in the globalization trend and benefit from well manage it, we can get why Lenovo, a Chinese computer manufacturer.

3.2 Globalization management in Lenovo

To make Lenovo Company benefit from the globalization trend and well manage it, its management has resorted to many approaches including globalizing its supply chain, international strategic alliances and so on with the help of suitable management functions and skills. (Spencer & Jane 2006)

3.2.1 Supply chain globalization

When concerning with the supply chain globalization in Lenovo Company, we can get the following evidences.

In order to reach more customers and expand business in more countries in the umbrella of globalization, Lenovo management clearly defines its goal that is to be a new world firm which produces the award-winning personal computers for its customers via the assistance of world resources across its global teams, which reflects its management function of planning in organizational goals defining. And to fulfill this goal, the management of Lenovo has also figured out one of the means to achieve it via the globalizing its supply chain to standardize and globalize itself more. Figure 1.0 is Lenovo’s international supply chain, which is based on China mainland as its headquarters and encloses itself with overseas branches all over the world including United States, New Zealand, Norway, Philippines, Portugal, Singapore, and Vietnam and so on which is aimed to save distribution cost as well as tariff. (Hu 2007; Dow Jones & Company, Inc 2006)

At the same time, Lenovo Company also tries every efforts to complete and modify its selling system through IT to make nearly 90% of its products configured to be ordered and shipped directly to its customers globally which is a cost saving means to save the spending in middle men. At present, there are more than 100 countries and 20,000 customer locations can be reached by Lenovo Company directly with around 5,000 to 10,000 orders per day all over the world. Such kinds of outcomes are mainly due to the well used organizing function of Lenovo’s management team to well design the tasks and allocate its resources properly to assist its global management strategy in the world market. (Spencer & Jane 2006)

Furthermore, not only the two management functions including the planning and organizing, but also the excellent management skill applied by Lenovo’s management teams especially the conceptual skills have contributed to the success of Lenovo Company in well management the globalization. As Daft (2010) advocated, the conceptual skills involve managers’ abilities to think, process information and plan so as to stand on the role of the entire organization to solve problems in its business. The global goals setting to build Lenovo as a new world firm so as to meet customers’ needs in the world markets and these appropriate organizing methods such as the globalization of supply chain to save cost and enhance profit all reflect the management of Lenovo stands in the global region to foster such long term view that is expanding its market via cost saving approaches to ensure the sustainable development of this organization in the trend of globalization. It is the wonderful demonstration of the conceptual skills of Lenovo’s managers. (Spencer & Jane 2006)

Figure 1.0 Lenovo’s international supply chain

figure 1.0

Source: Lenovo.com

3.2.2 International strategic alliance

To catch these opportunities offered by globalization, Lenovo has adopted the strategy of international alliance to sweep these barriers in its road of globalization. Because, the process cost of globalization for a company may be a lot with the integration of R&D, production distribution, marketing and financial decisions in the world wide region, the cooperation with some business partners in the world market may enable firms to own necessary resources so as to effectively compete its rival internationally, which calls for effectively adopted management functions and skills. The following is the demonstration of Lenovo’s managers in dealing with globalization issue with the help of proper management functions and skills. (Spencer & Jane 2006)

International strategy alliance is such kind of means of international cooperation referring to the business arrangement used by two or more companies to cooperate with each other so as to win the mutual benefit, which often owns the benefits of ease of market entry, shared risk shared knowledge and expertise and the advantages of synergy and competitiveness (Griffin & Pustay 2010). For Lenovo, it chooses the functional alliance with IBM Company to ally their production line, marketing campaign, financial benefit as well as research and development practices in their personal computer aspect (Dow Jones & Company, Inc 2006).

The strategic alliance with the international Electronics giant- IBM is based on the deep consideration of its current situation and the benefits and drawbacks from the strategic alliance with IBM. For instance, directors of Lenovo held nearly one month long meeting to discuss how to help Lenovo to be a globalized firm. And then the plan of strategic alliance with IBM was finally made. Such kind of management practice reflects the well functioned management function and skills– the planning as well as the conceptual management skills. For the one side, these risks such as brand challenge, workforce resistance and limited sales talents involved in cooperating with IBM in the area of personal computer may be unpredictable. However, Lenovo’s directors aren’t so short-sighted and they are able to penetrate the dynamics of future market development for personal computer and finally implement their decision which is the perfect presentation of management conceptual skills in the real business world. For the other side, the decision to rely on the strategic alliance with IBM to help Lenovo globalize to win more profit is also a classical example of the well utilization of the planning management function to help Lenovo Company to pave the way for the future with fully use the available resources such as the help of the world electronics giant –IBM. Dow Jones & Company, Inc 2006)

4.0 Lenovo and its change management

4.1 Changes and related issue

In today’s business world, although the future is hard to predict, it is possible to do some preparations via the investigations of those changes which are as the following descriptions.

At first, there is a trend that the market place is more and more segmented as well as more and more Niche goods appear. In the past, managers in organizations often concerned with the mass market more such as the mass communication means, mass behaviors as well as the mass values compared with nowadays’ market in which the group of customers become more and more segmented and specialized. For example, companies such as Amazon and Apple Computer are more flexible to offer all kinds of products to their customers without too much limitation as before. Secondly, firms in today’s business world may face more competitors who provide a diverse products, which is a big pressure and indicates the importance of the fast speed to enter market or else the market share may be obtained by other competitors. Thirdly, these new market regions in China, India and other places offer the global market a new context especially cheap working forces with less salary requirements compared with these workers in developed countries. Fourthly, the new competitive advantage has already appeared – the knowledge. Unlike these routine works in past, knowledge endows works the concept of analytic and systematic. (Burkhardt & Gerard 2006; Daft 2010)

Due to these changes mentioned in the above, forces both from outside and inside the organization occurring to drive organizations’ managers to deal with the rapid change with appropriate measures and strategies. (Burkhardt & Gerard 2006)

Let’s take a look at these forces for change. In the external side, the first issue is the demographic characteristics in the workforce resulting in a diversity workforce, which requires managers to work out an effective way to deal with diversity. The changes in market also work as an external factor to force organizations to change the way they run their business. At the same time, the advanced information technology also gives organization managers the pressure to enhance the productivity of their organizations or else the products of the organizations may be substituted by others. In addition, changes in society and political situation also lead great pressure for organizations’ managers. In the internal aspect, there are two major factors. The first one is the employee problems. The job satisfaction rate from employees is the major signal for managers to realize the need for change. And under many circumstance, behaviors of organizational managers often causes some conflicts which also indicates the necessity of changes for organization to deal with. (Burkhardt & Gerard 2006; Daft 2010)

Hence, we can make the conclusion managing change is the importance issue for every manager in organization nowadays.

4.2 Change management in Lenovo

For companies like Lenovo, there forces both external and internal not only give it great pressure to develop its business but also various of opportunities to enhance its competitiveness in the world market with the more and more close relationship of world market region and help of high technology. (Dow Jones & Company, Inc 2006)

To make it more adaptable to the changing business world, the former CEO Liu Chuanzhi and the top management decide to use diversification strategy to enhance its competitiveness and flexibility both domestically and internationally to deal with these changes. Via appropriate using the planning management function, the top management of Lenovo has conducted a deliberate market investigation and raised all kinds of resources including 4 billion to support the diversification strategy so as to meet the goals of becoming the world top 500 multinational companies. The diversification strategy carried out by Lenovo’s CEO and senior management is divided into three sub-aspects including products diversification and sale model. (Spencer & Jane 2006)

In the products diversification areas, Lenovo has broadened its products into five major categories with the help of modern technology as in figure 2.0. For example, in the internet aspect, Lenovo’s manager has leaded this group to practice several significant activities. Lenovo realized the cooperation with New Oriental Education Groups of China and established the online website for this famous Chinese education group, which has contributed the great reputation and profit to Lenovo later. From the beginning of the negotiation with New Oriental Education Groups to the website maintenance, it all shows the strong human skills and technical skills of its managers charged in this project. In the negotiation process with New Oriental Education Groups, Lenovo’s vice director Xia Li, who made an excellent performance in this event, was professional at communication and negotiation to disclose the great meaning of the cooperation and the win-win consequences. He analyzed the current situation and great future market prospect for online education website to the CEO, Yu Minhong of New Oriental Education Groups, who finally moved by this cooperation idea and accepted Lenovo’s cooperation offer largely because Xia Li’s professional knowledge and analytical ability to help him realize the big market opportunity in the online education field. The success of cooperation with New Oriental Education Groups shows the manager of Lenovo own excellent human skills such as communication and negotiation as well as the technical skills such as the professional knowledge and analytical ability in related areas of its business, which help this Chinese enterprise broaden its business into a wilder aspect. (Daft 2010; (Spencer & Jane 2006; Burkhardt & Gerard 2006)

Figure 2.0 products categories in Lenovo Group

Source: Lenovo.com

And in sale model diversification strategy of Lenovo, its CEO and senior management have carried out a brand new sale model named double dual mode on the basis of experience both from big Giant in computer aspect such as Dell and its own. This mode is aimed to not only expand the transactional mode which is already in the leading position but also build the network with relational customers to provide large organizations with customized services via the same working forces so as to meet the continuing changes of market needs. This kind of strategy reflects the conceptual skills and organizing function of its manager team. Firstly, Lenovo’s managers are really wise and far-sighted, they learned from Dell’s pressure in the direct selling mode and the market potential from relational customers, which shows their well exercised conceptual skill that they own the ability and capacity to evaluate Lenovo as a whole system even in the changing environment. Meanwhile, its CEO and senior management also realized the fact that building two kinds of sale mode including the transactional one and relational customer one may cost Lenovo Group too much compared with the profit gaining from this two modes, but to build a combination mode based on the two is reasonable and low cost, which also indicates the managers excellent conceptual skill that they are able to think strategically from the long term development of Lenovo and indentify suitable measures–the dual mode to solve problems and gain profit. And from the two aspects, Lenovo’s managers’ well used organizing function is also reflected that they are capable to make full use of their working forces via properly tasks assignment to explore a new sale mode namely the relational customer model under skillful motivation on employees to facilitate Lenovo group to reach a wider range of customers in the world market in the changing environment. (Spencer & Jane 2006; Burkhardt & Gerard 2006)

By and large, with the assistance of the diversification strategy, Lenovo has enjoyed a successful development in the rapid changing business world and finally push itself in the rank of world top 500 multinational with $167.9 million annual revenue. (Hu 2007)

5.0 Conclusion

Under the research of Lenovo’s management practices in managing areas such as diversity, globalization and rapid change, this essay developed a discussion on the requirements of suitable management functions and skills to facilitate the business of Lenovo Group.

With the above management practices and help of suitable management functions and skills, the outcomes and achievements made by Lenovo Group under the leading of its managers are also figured out by this essay.

And we believe under the properly adoption of the management competencies, Lenovo’s future may be more brightening in the turbulent business world.

Reference

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Burkhardt, G. & Gerard, D. 2006, People: The lever for Changing the Business Model at Learning Point Associates, Journal of Organizational Excellence, p.31-43,

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Daft, R. L. 2010, New era of management, 9th edn, South- Western Cengage Learning, n.p.

Dow Jones & Company, Inc 2006, China’s aggressive buyers suffers setbacks on some overseas deals, The Wall Street Journal,

Griffin, R.W. & Pustay, M.W. 2010, International Business, 6th edn, Pearson, New Jersey.

Jaikumar, R. & Bohn, R. E. 2006, A dynamic approach to operations management: An alternative to static optimization, International Journal of Production Economics, P.265-282.

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McQueen, M. P. 2007, Workplace Disabilities Are on the Rise, The Wall Street Journal, electronic version, viewed 2 May, 2010

<http://www.online. wsj.com>

Spencer & Jane 2006, Lenovo Net Falls 16 Percent, Wall Street Journal, p. B2.

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