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romanizations start with “s.” Their rough translations: seiri (discard the unnecessary)。s Haier Power — Antony Paul better things. Zhang shocked his workers by muting with them every day. (Laotzu :“Let rule be entrusted to him who treats his rank as if it were his soul.”) As the Liebherr technology was introduced, Zhang placed samples of the German pany’s products in sight of his assemblyline workers so that they could see what quality looked like. By 1986, Haier had broken even. The refrigerator pany took over three other Qingdao whitegoods enterprises, and turned the whole lot into the Qingdao Haier Group in 1991. Unit Two China39。s Haier Power — Antony Paul Sovietstyle mand structure for local industry. With an eye on the future, he also absorbed, discreetly, Western and Japanese management texts. His chance to put his gleanings into practice came unexpectedly in 1984. As China opened to the West, foreign panies sought out Chinese factories to do business with. The Qingdao refrigerator factory, Haier’s own Website concedes, was then merely a “row of shabby buildings containing several lathes”with a production capacity of 84 units a month. And it was losing money: $179000 in 1984. LiebherrHaushaltsgerate, a leading German whitegoods manufacturer, offered to sell the factory modern refrigeratormaking technology. The city accepted. Pessimistic about the factory’s ability to absorb the technology, the managing director resigned. Zhang, by then vice manager of the municipality’s Household Appliances Division, was given the job. Unit Two China39。s Haier Power — Antony Paul Zhang, the only son of a worker in a Qingdao shirt factory, says his first love was ancient Chinese literature. As he tells it today, Laotzu (a sixth century . philosopher) and Sun Tzu (a military writer of the fourth century .) provide food for thought for modern businessmen as well as ancient warriors. Laotzu has advice about running a pany:“When the effective leader is finished with his work, the people say it happened naturally.”Sun Tzu is relevant on, among other things, marketing strategy:“Uproar in the East。s Haier Power — Antony Paul The pany that Zhang brought back from the dead is a “collective enterprise,”one of some 25 million quasisocialist mercial entities owned in principle by the workers but supervised by local bureaucracies and Communist Party officials. Though the problems of such small or middling, often citybased firms are not exactly the same as those of China’s vast, gangrenous stateowned heavy enterprises, both have suffered from a lack of accountability and poor management. Unit Two China39。 that’s more than 5000 times as much as in 1985, but less than a third of the revenue of No. 500 on Unit Two China39。s Haier Power — Antony Paul Watched by CEO Zhang Ruimin, then 36, the customer rejected dozens of imperfect refrigerators. Finally he settled on one and left, declaring himself satisfied. Zhang wasn’t. He went through his warehouse, rechecking the refrigerat