CASE # 2 (China Company)

What could be more self-explanatory about corporate values than naming your business “China
Company?” Zhong and Wang are Chinese characters for loyalty, dedication, and prosperity. It
certainly worked out for the Liaoning Province–based Chinese aluminum developer and
manufacturer.
Founded in 1993, it had total assets of US$3.9 billion. In 2014, the company’s revenue was
around 16 billion RMB ($2.5 billion). The company is the largest producer of extruded
aluminum in Asia and the second largest in the world, with its product being used in many
industries—from rail carriages to power plants. From the outset the business sought to be
sustainable, prosperous, and contribute to society.
The aluminum industry is highly competitive, and China Company is not only interested in value
creation, but also in encouraging its customers to expand their businesses. The company is
looking to expand their operations in Europe and the U.S., with Lu Changqing, the executive
director and vice president saying, “We’re actively seeking cooperation in Europe and the U.S.,
including potential acquisitions.”
Employee contribution and a commitment to excellence have been key to the company’s success.
Certain elements— like responsible corporate citizenship and operation management with
integrity—are built into corporate values. The trick was transforming a corporate slogan into a
corporate reality. In 2012 the Chinese government certified China Company as a “State
Accredited Enterprise Technology Centre.
China Company was recognized not only for its technology, leadership, and strategy, but also for
the fact that its management practices were inspirational to other companies in China. Li Beibei,
the director of public affairs of China Company, believed the award showed that the company’s
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achievements went beyond its production and technology. It was recognized for its innovative
business culture, management practices, and broad vision.
The company’s single principal shareholder, Liu Zhongtian—a self-made billionaire, who
according to Forbes had a net worth of US$3.2 billion as of May 2015—said the company’s
rapid growth has been a result of “perseverance and determination.”
As a result of its long-held desire for the business to become a world-class international
producer, the company has initiated a shift toward high-end, high-value-added products. The
business has expanded not only by increasing its production capabilities, but also through
horizontal expansion. This expansion has allowed it greater dominance in the domestic Chinese
market, as well as the export market.
China Company’s core values are fivefold. First, it tries to add value and grow alongside its
customers; second, it develops its own talent, particularly in relation to innovation, teamwork,
and pursuit of excellence. Third, China Company wants to create sustainable earnings growth
and reward investors and shareholders. The fourth core value is to be a responsible corporate
citizen and to do business with integrity, which includes supporting charities and community
events. Finally, it is to establish a business that is trusted by customers and to retain and develop
key employees to push the business forward into the future. The company also professes a
“customers first” philosophy. Employee training focuses on responding to customer
requirements and changing market needs in order to achieve high levels of customer satisfaction.
The aluminum business had to position itself carefully, responding to the demands of the
external environment. Rather than react to environmental issues, organizations like China
Company have taken immediate steps to cut down on energy use and reduce waste. Globally, the
industry can boast that aluminum is the most commonly recycled metal in the world. Clearly,
this approach permeates enterprises such as China Company as part of its overall commitment to
social responsibility.
China Company is committed to the lifelong learning and career development of the employees,
helping each person to effectively combine their talent development goals with corporate
development. The company conducted operational and theoretical skill training for specialized
operational personnel; they also worked with local government bodies to offer Pre-appointment
Bridge-up Training,” a training program for laid-off workers to help develop their professional
skills and operation capabilities. Training programs were organized with a total participation of
27,470 individuals, with all staff members having enrolled. To acknowledge the achievements of
the employees, China Company awarded titles of “May Day” medal and “Workers’ Vanguard”
for excellent performance.
As a member of the Hong Kong Stock Exchange, China Company continues to have great access
to potential investment. The company is ranked first among the major Chinese aluminum
companies and continues to expand. In retaining its core values of commitment, diligence,
responsibility, and innovation, the business has become a major developer and manufacturer of
high-quality aluminum products in the world, and at the same time reflects thoughtful response
to demands from the external environment.
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Case # 2- Discussion Questions
1. What are China Company’s corporate values? How do you think these values influence
the way employees do their work?
2. Using the company’s corporate values, describe the organizational culture. In which areas
would you say that the company’s culture is very high (or typical)? Explain.
3. How is China Company’s corporate culture maintained?
4. “The right culture with the right values will always produce the best organizational
performance.” What do you think of this statement? Do you agree? Why or why not?