CEO gives a global market perspective

As the American economy suffers, so does the world market. And foreign managers now face crucial decisions about how to deal with the these market changes. On Tuesday afternoon, Zhang Ruimin, founder and CEO of The Haier Group, spoke to a 100-member audience, comprised of mainly faculty and MBA candidates, about his own management decisions during this difficult time. "When we ask people who is the number one CEO in China, the answer is so clearly Zhang Ruimin," said Wharton professor Ming-Jer Chen, Founding Director of the Global Chinese Business initiative. "This is why we asked him to speak to us about these issues." Ruimin brought The Haier Group, which manufactures household appliances such as refrigerators and washing machines, back from bankruptcy in the late 1970s. "He is a representative of how much the Chinese culture has changed," said Emma Freeman, project coordinator for the initiative. "Haier began as a failing state owned company and Ruimin changed it into the success it is today." According to Ruimin -- even in this age of globalization -- worldwide business communication still remains inefficiently slow. "When we communicate with a multinational firm it often takes two weeks to gain a response out of all the bureaucratic tape," Ruimin said. In the global market, as well as at home in China, Ruimin stressed that large companies need to focus more on quality and consumer wants. He repeated before his audience the now famous story of his personal sledgehammer assault on 76 defective refrigerators in one of his factories. He said it was the only way to make his workers understand the need for quality. "Many of those workers had never used a refrigerator," Ruimin added. "It used to take them two years to make enough money to even buy a fridge." "One percent defective leads to 100 percent disaster with our customers," Ruimin said. Tuesday's lecture was initiated by Chen, a Chinese business professor, in light of his new book Inside Chinese Business. Chen, who teaches an undergraduate management class, is seeking to bridge the gap between eastern and western business practices through his classes. "The Chinese always think that it is important to learn about Western culture, but there is a lot that American students can learn about Chinese culture," said Phillip Li, a Wharton sophomore and student of Chen's. "I think it's really interesting to have the CEO of one of the most successful Chinese companies to talk to us about Eastern culture."