Page 18 - MS Perspectives 2014 YIR

"Corporate Culture is the 'Nuclear Bomb' of Huawei" - Part
Two

Dr. Eric Flamholtz
President & Founder, Management Systems

Huawei Technologies Co. Ltd (known more simply as "Huawei") is an extraordinary
company by any standard. Its development and success rival any of the classic
entrepreneurial stories of Apple Computer, Starbucks, or Amazon. Built from
virtually nothing, it has become a global leader as an "ICT" solutions provider." ICT
stands for information communications technology."

Huawei's Success has been Extraordinary

The development of Huawei is the story of a clearly brilliant and visionary founder,
Ren Zhengfei, who had none of the classic advantages required for success in
China. He had no money, and he had no "connections" or what the Chinese call
"Guanxi;" this is a central idea in Chinese society. It refers to personalized
networks of influence or connections. He was also over 50 when he founded
Huawei.

There are many aspects of Huawei that would or should be of interest to
management theorists and leaders of actual organizations. The one that for me was
most intriguing is the statement concerning corporate culture above and in the title
of this article: "Corporate Culture is the 'Nuclear Bomb' of Huawei"?

Corporate Culture is the 'Nuclear Bomb' of Huawei

Ren Zhengfei, Founder and Deputy Chairman of the Board, is the author of this
statement. This statement implies that corporate culture is the ultimate strategic
weapon, just as a nuclear bomb is currently the ultimate weapon of warfare. My
colleague ad co-author Yvonne Randle and I totally concur, as implied by the title of
our book: Corporate Culture: The Ultimate Strategic Asset1.

What does this mean? Huawei views itself as being in a battle or "war" with all of its
competitors. From Ren Zhengfei's perspective, it is a "continuous battle for
'survival'." In that battle, according to Ren Zhengfei, the ultimate weapon is
corporate culture.

The Nature of Corporate Culture

The essence of corporate or organizational culture is the "values" and "norms"
(expected or prescribed behaviors) of a company). "Values" are what is important
to the company and "norms" are the vehicle for the expression of values. The latter

1 Flamholtz and Randle, Corporate Culture: The Ultimate Strategic Asset, Op. Cit.

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