Book Review - The Lenovo Affair by Ling Zhijun
Category Book Reviews
When Lenovo bought the IBM PC division, I think many Americans saw it as an ominous sign of increasing dominance by a foreign juggernaut. In reality, Lenovo has just as many problems as any other international firm. The story is laid out pretty well in the book The Lenovo Affair - The growth of China's computer giant and its takeover of IBM-PC by Ling Zhijun (translated by Martha Avery).
The book covers the history of Lenovo, or Lianxiang as it is known in China, and its founder Liu Chuanzhi. The history goes back to 1984 when a small group of people from the academy got permission to start a business enterprise. This is the first major mind-shift you'll undergo as you read the story, as the Chinese culture and government make for vastly different rules in the business world. During their formative years, there was a tight connection between the academy and the business, so much so that workers in both areas could go back and forth between the two groups, drawing salaries from both. While it may sound like the government backing would guarantee success, the reality is that you have far more expectations and political gamesmanship to account for. And if you fall out of favor with the ruling party, your demise is pretty much assured.
As the years unfolded, up to and through the internet bubble, Lenovo earned the reputation of a company having nine lives. On numerous occasions, personality issues could have torn the company apart (and nearly did). Supply and cost considerations, along with foreign competition, almost caused the company to go bankrupt a number of times. The same business forces at work in the West (profit margins, competition, labor costs, etc.) also affect Chinese companies. You realize that the mere fact of being a Chinese company with government support doesn't automatically pave the way to success. The chapter on the IBM purchase is almost dealt with as an after-thought in the book. There's not much ink devoted to that particular event, but the rest of the book does a good job in setting the stage for what something like that means to a company like Lenovo.
This isn't a particularly easy read for a westerner. My unfamiliarity with Chinese names made it hard to follow the cast of characters. I'm sure the translation factor also comes into play in terms of readability. But it's a book I'd recommend for a number of reasons. You'll see how China's communist, war-driven history flavors business strategy at all levels. Companies looking to operate in China will start to understand how the culture is so very much different than ours, and how ignoring that fact dooms you to failure before you even start. But most of all, you'll see that it *is* possible to compete with companies like Lenovo, because they are just as human and prone to misjudgements as any other business...
When Lenovo bought the IBM PC division, I think many Americans saw it as an ominous sign of increasing dominance by a foreign juggernaut. In reality, Lenovo has just as many problems as any other international firm. The story is laid out pretty well in the book The Lenovo Affair - The growth of China's computer giant and its takeover of IBM-PC by Ling Zhijun (translated by Martha Avery).
The book covers the history of Lenovo, or Lianxiang as it is known in China, and its founder Liu Chuanzhi. The history goes back to 1984 when a small group of people from the academy got permission to start a business enterprise. This is the first major mind-shift you'll undergo as you read the story, as the Chinese culture and government make for vastly different rules in the business world. During their formative years, there was a tight connection between the academy and the business, so much so that workers in both areas could go back and forth between the two groups, drawing salaries from both. While it may sound like the government backing would guarantee success, the reality is that you have far more expectations and political gamesmanship to account for. And if you fall out of favor with the ruling party, your demise is pretty much assured.
As the years unfolded, up to and through the internet bubble, Lenovo earned the reputation of a company having nine lives. On numerous occasions, personality issues could have torn the company apart (and nearly did). Supply and cost considerations, along with foreign competition, almost caused the company to go bankrupt a number of times. The same business forces at work in the West (profit margins, competition, labor costs, etc.) also affect Chinese companies. You realize that the mere fact of being a Chinese company with government support doesn't automatically pave the way to success. The chapter on the IBM purchase is almost dealt with as an after-thought in the book. There's not much ink devoted to that particular event, but the rest of the book does a good job in setting the stage for what something like that means to a company like Lenovo.
This isn't a particularly easy read for a westerner. My unfamiliarity with Chinese names made it hard to follow the cast of characters. I'm sure the translation factor also comes into play in terms of readability. But it's a book I'd recommend for a number of reasons. You'll see how China's communist, war-driven history flavors business strategy at all levels. Companies looking to operate in China will start to understand how the culture is so very much different than ours, and how ignoring that fact dooms you to failure before you even start. But most of all, you'll see that it *is* possible to compete with companies like Lenovo, because they are just as human and prone to misjudgements as any other business...
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Comments
I don't get it either. Maybe our pseudonymous friend is referring to the Teddy Roosevelt administration? TR certainly wasn't shy. But as far as I know, the US has always focused most strongly on dominating our own hemisphere (Manifest Destiny [Go west, young man...], Spanish-American War, and various adventures in Central and South America). We meddle globally, of course, as does every other major country in every era in world history, but I've never heard of a plan for the US to rule Europe in particular...
Posted by Rob McDonagh At 13:46:40 On 07/08/2006 | - Website - |
In history, wasn't there also another ominous promise of US to rule Europe over a century ago? People today are just too young to know history. But at least they know Japan bashing over a decade ago. China bashing seems to be the propaganda in fashion now.
Posted by See It All At 22:46:53 On 05/08/2006 | - Website - |
Just a note on picking up Chinese (or Karean or Japanese) names. It helps to read a pronunciation primer on pin-yin (peen yeen), which is the romanization of Hanzi (chinese characters - similar to Kanji).
Chinese Outpost is a great one I've used in the past.
http://www.chinese-outpost.com/language/links.asp
And, if the story doesn't end with the the ominous promise of China to rule the west, it's all state propaganda.
Posted by Jerry Carter At 05:28:30 On 31/07/2006 | - Website - |
Posted by Duffbert At 06:14:20 On 31/07/2006 | - Website - |
http://en.wikipedia.org/wiki/Anti-Americanism#Early_Twentieth_Century_and_Cold_War
"I've never heard of a plan for the US to rule Europe in particular", yes, you are right. My point is, some Europeans still thought US had one, just like some Americans think China has one. BTW, I stay anonymous because in today's US, nationalism, arrogance and blindness (refuse to face the bitter truth) is so pervasive. That's why there is a big gap between how the world views American foreign policy and how Americans view their own foreigh policy.
"every other major country in every era in world history" "meddle globally". Does that apply to China? I am interested in any well-researched history on that, especially "globally", not just some changes of country borders (for example, US grew from 13 states to 50, but that is not something "globally".)
Posted by See It All At 20:51:22 On 13/08/2006 | - Website - |
"ominous promise of US to rule Europe over a century ago?"
Source? To my knowledge, no - and I'm pretty up on world history from about 1700 forward. I think maybe you've consumed some propaganda.
And, getting a chuckle at the expense of the comunist party in China is a far cry from China bashing.
Posted by Jerry Carter At 11:49:23 On 07/08/2006 | - Website - |