Huawei's corporate strategy

Author: Wen Liyan
Publisher:
Publish Date: 2006-10-01
Features: Democracy and autocracy are contradictory forces. This is true in political activities, just as it is in business activities. In political activities, people understand the fundamental difference between democracy and autocracy as follows: Should we obey the majority? Or should we obey the elite? Democratic thinking advocates obedience to the majority, as it believes that the intellectual differences between people are limited, and everyone has the ability to independently judge things, so the principle of "the minority obeys the majority" should be adopted. Autocratic thinking, however, holds that the intellectual differences between people are significant, and not everyone has the ability to independently judge things. Most people are fools and mediocre individuals who cannot lead themselves, so they need wise people to rule over them. Ren Zhengfei introduced the concepts of democracy and autocracy into Huawei's business operations, first proposing that "autocracy is the foundation of democracy." He skillfully utilized the natural contradictions and complementary relationships between the two, successfully achieving management and control over Huawei. Throughout Huawei's development, the existence of this contradiction and the process of its transformation can be clearly seen. Telecommunications companies face contradictions both domestically and internationally, as well as among multinational companies, state-owned enterprises, state-owned and private enterprises, and private enterprises. However, based on the long-term high-price monopoly of multinational companies in the Chinese market, obstructing the development of China's telecommunications industry, the contradiction between domestic manufacturers and multinational companies has become the primary contradiction. In the early stages, technological breakthroughs were the main aspect of the contradiction, while in later stages, the opposite is true. In internal development, Ren Zhengfei recognized the existence of several contradictions: autocracy and democracy; individual decision-making by entrepreneurs and professional management; decentralization and centralization; capital and knowledge capital; the spirit of Lei Feng and the idea that contributors do not suffer losses; respecting individuality and collective struggle; reform and improvement, etc. Regarding autocracy and democracy, Ren Zhengfei believes that democracy arises from autocracy. Without autocracy, democracy cannot grow, and it cannot emerge in a state of anarchy. Whether former or current employees of Huawei, whether they have personal biases against the company or fully endorse it, whether they have been praised by Ren Zhengfei or recently cursed at by him, all deeply admire him from the bottom of their hearts. When talking about him, they show reverence, and they are utterly impressed by his extraordinary leadership skills and entrepreneurial spirit. In the eyes of many, Ren Zhengfei is almost like a stern teacher. Decision-making mechanisms in domestic telecommunications manufacturing companies can largely be divided into two types: one is leader-led, and the other is bylaws-led. Most private enterprises belong to the former, while state-owned enterprises and those reformed from research institutions mostly fall into the latter. In the entrepreneurial stage of private enterprises, the focus of operations is on market sales, with all work revolving around the market. Organizational structures are unclear, and informal organizations become the primary mode of operation. Entrepreneurs drive the company with personal authority, transmitting market pressure, and members' goals are primarily measured by market performance. The ownership of the entrepreneur in the enterprise becomes the basis for rewards. The founders of private enterprises generally establish authority as the company grows.