middle manager development in china

Allan Fu Tze Yu and Yuen-ching Sin Fu prepared this case under the supervision of Dr Gilbert Wong for class discussion. This case is not intended to show effective or ineffective handling of decision or business processes.

? 2007 by The Asia Case Research Centre, The University of Hong Kong. No part of this publication may be reproduced or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise (including the internet)—without the permission of The University of Hong Kong. Ref. 07/340C

GILBERT WONG

DEVELOPING EFFECTIVE MIDDLE

MANAGEMENT IN AN ENTREPRENEURIAL

FIRM IN CHINA

Liu Yuan (“Liu Junior”), CEO and sales director of Zhuhai Victory Idea Company Limited (“Victory Idea”), an IT and network security device manufacturer in southern China, was on his way to Zhuhai airport to catch a plane to his Shanghai marketing and sales office. As he looked out of the window of his air-conditioned chauffeur-driven sedan that fine spring morning in 2006, just a few months after assuming the position of CEO at the company his father had founded, he could see the beautiful, clean, coconut-tree-lined beach and momentarily thought that he was in an exotic tropical paradise instead of in China. Despite the inviting scenery, Liu Junior was feeling frustrated as he had just told his sales manager, for the second time, to pick the sales representative with the lowest sales volume in the last quarter and have him or her fired. He recalled a week ago when he was calling from his Beijing marketing and sales office—he had already asked the sales manager to make the personnel decision before he returned to Zhuhai. But when Liu Junior came back, his sales manager told him gingerly that it would be best for him, as the company’s owner and its CEO, to make the dismissal. Liu Junior had no qualms about firing employees, especially if it served to motivate the rest of the staff to strive harder. But in his attempt to take his company forward from a family-owned business to a professionally managed one, he encountered some difficulties, particularly in delegating certain decision-making tasks to his middle managers. And that concerned him. He wondered to what extent his company could expand if there were no middle managers who were willing to assume responsibilities and make decisions.

Industry Background

In 1997, China’s state council passed the “Provisions on the Administration of the Protection of Secrets on Internationally Networked Computer Information Systems” 1 to be administrated

1

Congressional–Executive Commission on China, Virtual Academy, “International Agreements and Domestic Legislation

Affecting Freedom of Expression”, https://www.wendangku.net/doc/ff13226789.html,/pages/virtualAcad/exp/explaws.php (accessed 26 August 2006); 《計算機信息系統國際聯網保密管理規定》https://www.wendangku.net/doc/ff13226789.html,/Law/law20000100.html (accessed 27 August 2006).

HKU 678

by the State Bureau of Secrecy commencing 1 January 2000. This regulation on computer security became the foundation and driving force behind the rush to develop a security system that would serve China’s unique needs.

In the ensuing years, information security had become one of China’s top national priorities. According to the “Decision on Enhancing the Executive Capability of the Communist Party of China” pronounced in the Fourth Plenary Session of the 16th Central Committee in 2002, information security became the fourth main theme, together with political, economic and cultural security, in the basic strategies to strengthen the Communist Party’s ability to govern. Several top Chinese leaders attended the 2004 National Information Security Conference including Executive Vice-Premier Huang Ju, Vice-Premier Zeng Peiyan, Minister of Public Security Zhou Yongkang, and the Deputy Chief of General Staff of the People’s Liberation Army, Xiong Guangkai.

According to CCID Consulting, a leading market research and advisory firm focused on the development of China’s IT market and information security market, investment in the IT industry and demand for network information security products were expected to be as shown in Figure 1 and 2 below.

M a r k e t s i z e (R M B 100 m i l l i o n )

Source:IDC,CCID

45004000

3500300025002000150010005000

Figure 1: Forecast of Investment 2 in IT Industry (2004–2007)3

2 Currency exchange used : US$ 1 = RMB 7.97

3

Victory Idea PowerPoint Presentation (January 2006), “Slide 23”.

M a r k e t S i z e (R M B 100 m i l l i o n )

2003 2004E 2005E 2006E 2007E 2008E

40.0%35.0%30.0%25.0%20.0%15.0%10.0%5.0%

0.0%

10090

80706050403020100

Source:CCID

Figure 2: Demand for Network Security Products (2003–2008)4

The market research also showed that while the share of the investment in network security in other countries was approximately 10–15% of the entire IT market, it amounted to only 1–3% in China, indicating a high potential for growth for the industry. Indeed, with the central government’s requirement for network security, the growth rate of the network security market was already double that of the IT industry and was expected to reach US$1.442 billion by 20095.

Company Background

Liu Jinhai (“Liu Senior”), the founder, chairman and president of Victory Idea, was a physician by training. He graduated in 1966 from the Shanghai Second Medical College (later renamed Shanghai Second Medical University), just as the Cultural Revolution was beginning. When it ended in 1978, he applied and got accepted to graduate school, majoring in immunology, and was among the first group of post-Revolution graduates in 1983. Liu Senior started working for a Shanghai state-owned pharmaceutical company in 19846 and was instrumental in developing a hepatitis diagnostic kit that is still in use today.

Desiring more autonomy, Liu Senior resigned from the state-owned company and went to Shenzhen in 1986 to start a joint-venture company with a Hong Kong investor to manufacture and market medical, biological and pharmaceutical products. At around the same time, China started a blood bank program. It was a prevalent thing among the working class and the poor at the time to sell blood to the government at local clinics. However, due to the lack of screening of donors before blood transfusions, hepatitis and AIDS spread like wildfire. In an attempt to prevent the spread of AIDS, the government required every foreign national to have an AIDS test done every three months. As the traditional diagnostic test took months to get results, the Chinese government asked Liu Senior to develop a rapid test, which he did in six months. This, among other medical inventions, brought a sizeable and steady income to the company.

4 Victory Idea PowerPoint Presentation (January 2006), “Slide 22”. 5

Victory Idea PowerPoint Presentation (January 2006), “Slide 7”,. 6

Lu Yi.”Gao qi dianying jie tiao zhan- ji Wei Si Jituan Youxian Gongsi zong cai Liu Jinhai xian sheng.” 《Zhongguo Jixuanji Bao 》 (魯意. “高起點迎接挑戰—記偉思集團有限公司總裁劉錦海先生.” 《中國計算機報》網絡與通信版 5 July 2001, p. 40.)

Since Zhuhai [see Exhibit 1] became a Special Economic Zone of China in 1980, it had been offering many attractive business incentives to potential investors. Seizing the opportunity, Liu Senior sold his share in the joint-venture company and in 1993 established his own company, Victory Idea, in Zhuhai in order to continue manufacturing and selling medical and biological products. The secret of his company’s success then was to keep developing new medical products that could command a high price. Once the prices dropped as a result of competition, Liu Senior would move on to other new products to maintain the company’s profit level.

Business Transformation

Through government officials with whom he had become acquainted in the State Health Department, Liu Senior became aware of the newly approved 1997 government regulation on computer security. He realised that there was an urgent need to develop a good computer security device for China.

Liu Senior also learned about the potential growth in the field of computer security through one of his company’s advisors, He Dequan, who was an academic at the Chinese Academy of Engineering (Information Security).7 He encouraged Liu Senior to start a business in this field. But to Liu Senior—who was in his 60s, had never used a computer, and could not even differentiate between hardware and software—the idea of starting a computer security business seemed far fetched. When He mentioned the need to develop a firewall for government computers, Liu Senior wondered how he, a physician, could get into the “firefighting business”! Besides, he lacked funding and he also knew that without government support it would be very difficult to venture into this new field. So his initial response to the proposal was less than enthusiastic.

But He, who was familiar with Liu Senior’s medical background, told him to think of computer security as the human immune system which protected the body from harmful viruses. The analogy clicked and Liu Senior began learning, methodically and diligently, about computers from his friends. With US$2.5 million seed money provided by a friend, Victory Idea branched off into the new field of IT and network security in 1998.

The first thing Liu Senior realised was that anti-virus or firewall software was at best a passive security measure which could only protect the computer against known viruses but left the computer open to attacks by any new viruses or worms that hackers invented. As a doctor, he believed in the age-old adage of “prevention is better than cure”, and that a similar concept could likewise be applied to safeguard computers. So rather than following others in the development of anti-virus software, he took instead the lead in finding a way to “immunise” computers. Taking He’s advice, he started exploring a way to secure not just individual computers but a computer network, separating the internet from the intranet.

Liu Senior found through research that Israel had developed advanced technology in computer security. He immediately organised and funded two business trips for Chinese government officials and specialists in charge of government information security to go to Israel. After visiting a number of IT companies, the specialists identified a technology that could physically separate internal computer networks from the world wide web—and hence its latent and potential viruses and worms—making it the cutting edge technology that China needed.

7 Victory Idea PowerPoint Presentation (January 2006), “Slide 21”.

Liu Senior acquired the patent for this technology from the Israeli company that had invented it and hired IT specialists in China to adapt it for Chinese use. A team of IT specialists at Victory Idea successfully developed about 20 models of a Physical Separation Card (“PSC”), which functioned as a physical barrier between the internet and intranet, and launched it in the domestic market in 2000 [see Exhibit 2].8

The PSCs were recognised by the State Secrecy Bureau in 2000 as an effective domestic physical network separation device, and the bureau endorsed the PSCs for extensive use in government units—particularly those which handled state secrets—and e-government projects. The device, which enjoyed a 60% market share then, still maintained between 30–35% market share in 2006, with a near monopoly in the high-end sector. Liu Senior expected that with the rapid growth in IT applications among Chinese enterprises (especially among manufacturers), the demand for PSCs would double in the period 2006–2010.9

In addition to the PSCs, Victory Idea also developed another major product in 2002, the patented ViGap Series (about 10 models). The device allowed the user to access the internet and intranet without first signing off from one and logging onto the other and allowed downloading of data from the internet, a big improvement in technology over that used in the PSC. However, since it was a new technology and because it was much more expensive than the PSC, the ViGap Series took until 2005 to gain market recognition; sales had since overtaken similar products from other domestic IT giants such as Lenovo and Langchao. Both PSC and ViGap also enjoyed a market share of over 20%, with a 30% premium in price over similar products offered on the market [see Exhibit 3].10 Liu Senior expected the demand for the device to top 5,000 pieces in 2006, and over 10,000 pieces from 2008 onwards.

Over the years, Victory Idea had invested a total of US$0.75 million into research and development (“R&D”) of computer security products and was given charge of four R&D programs in information security technology under the National High Technology Research and Development Program (or the 863 Program)[see Exhibit 4]. It had become a leading company in the development of PSC and ViGap products in China11and its products had received certificates of recognition and approval for use issued by the State Secrecy Bureau, the Chinese Police Department, the China Information Technology Security Certification Centre and the Information Technology Security Certification Centre of the People’s Liberation Army.12 The company was also the only provider of ViGap devices for domestic financial institutions which was used to protect the large amount of customer data stored on their computer systems [see Exhibit 5].13

Looking into the future, Victory Idea would continue to position itself as a major network security solution provider with new products like hardware-based firewalls, and an intrusion prevention system and its Linux computer security system were expected to be launched in 2007 and 2008, respectively. The company had experienced tremendous growth and the demand for its products was expected to increase in the years to come. Meanwhile, the medical business side of Victory Idea was reduced to marketing and selling medical products only.

Liu Junior, who was in charge of marketing and sales, was well aware of the importance of having a well-organised nation-wide distribution network and a highly motivated,

8 Victory Idea PowerPoint Presentation (January 2006), “Slide 2”,.

9 Victory Idea PowerPoint Presentation (January 2006), “Slide 10”.

10 Victory Idea PowerPoint Presentation (January 2006), “Slide 19”.

11 Victory Idea PowerPoint Presentation (January 2006), “Slide 2”.

12 Victory Idea PowerPoint Presentation (January 2006), “Slide 4”.

13 Victory Idea PowerPoint Presentation (January 2006), “Slides 5, 10 and 18”.

experienced and professional sales team. He established distribution subsidiaries in Beijing and Shanghai and adopted the sales distribution model of agent plus distributor plus strategic partner. A distribution network was set up covering over 30 provinces and cities, which amounted to over 10 provincial general agents, more than 30 provincial agents, almost 100 local agents and over 200 contracted distribution partners.14

To publicise the company and its products, starting in 2000, Victory Idea regularly took part in domestic exhibitions such as the annual National Information Security Products Exhibition organised by the Chinese Police Department, in seminars in the industry, and in technology conferences held by various ministries, the financial sector, and the army. Victory Idea also recognised the power of “soft” advertising through published articles on information security in newspapers, domestic magazines and IT journals. Its senior executives also accepted media interviews15 to maintain a high profile.

Victory Idea prided itself in providing quality product support and services through its customer management department and a call centre which had contributed greatly to its customers’ loyalty. The company offered a three-year guarantee on its products, which gave the customers assurance on the quality of its products and on its services [see Exhibit 6].16 Victory Idea had become a brand name for network security products in China and was regarded by its users as being a top ranker in the industry.

Organisational Transformation

Victory Idea, being a Chinese family-owned business, displayed many of the characteristics unique to those of Chinese family enterprises. It also shared the benefits, the management and succession problems, and the expansion limitations as other family-owned businesses, regardless of their ethnic background.

Early Management Style and Structure

In the early 1990s when China opened up its borders to investments, many businesses came in to establish manufacturing facilities. Jobs were plentiful and staff turnover was high. Liu Senior’s newly formed company, Victory Idea, was no exception.

Like any head of a family-owned business, Liu Senior only trusted members of his own family. He appointed his wife, his two sons, his daughter-in-law and his younger son’s girlfriend to senior management posts and built a circle of trust among the top echelon of his company. Relatives and friends were also involved in the business.17 Liu Senior said he adopted this family-style management because:

1.Family members were more reliable and they did not easily leave for better offers from

other companies.

2.Only family members could understand and endure the growing pains of starting up a

business. They would never abandon you.18

However, Victory Idea’s family-style management soon created a great deal of personnel problems in the company. Its centralised decision-making process and control by a patriarch,

14 Victory Idea PowerPoint Presentation (January 2006) “Slide 12”.

15 Victory Idea PowerPoint Presentation (January 2006) “Slide 18”.

16 Victory Idea PowerPoint Presentation (January 2006) “Slide 13”.

17 Interview with Liu Junior, 28 April 2006.

18 Interview with Liu Senior, 27 July 2006.

namely Liu Senior, gradually created a “bottleneck” situation. Liu Junior said his father used to assume a lot of responsibilities and kept himself very busy, which was typical of the patriarchal leader of a family business.19 Furthermore, although the middle management in his company had technical skills, they had few administrative skills. They were seldom asked to make decisions and they merely carried out instructions from upper management. Liu Junior worried that the middle managers were more concerned about their personal interests rather than those of the company. Compounding this management problem was the fact that financial and accounting managers did not know how to wisely and creatively manage the company’s funds.

After Victory Idea branched out into the computer security field, its management problems were exacerbated. Since neither Liu Senior nor his family members had any computer expertise, they relied on top-notch computer specialists hired from outside the family. In 2001, 70% of Victory Idea’s technical employees had a Masters or PhD degree, 90% of them were senior engineers and 52% were software specialists. The average age was 30 and most of the employees had graduated in computer science from top Chinese universities such as Tsinghua University, Harbin Industrial University and Fudan University.20These specialists, though very good in their own area of expertise, worked independently and did not form a cohesive work team.

Furthermore, Liu Senior was a fine physician and scientist but he admitted that he was not experienced in entrepreneurship and lacked management skills. In fact, his friends used to say that he was a good teacher but not a good manager. As time went by, his company encountered more problems in human resources, finance, management and even product manufacturing.21

New Management Style and Structure

In December 2005, Victory Idea underwent an administrative restructuring by removing most family members and relatives from the company in order to eliminate the problem associated with cronyism. Liu Senior became president of the company and chairman of the board; his responsibilities were limited to identifying a direction for the company’s development. Liu Junior became the CEO and director of sales and marketing while his elder brother was made vice-president in charge of administration and human resources.

As CEO, Liu Junior could see the company’s problems more clearly. He started introducing a number of changes and tried to transform the company from a family-owned business into a professionally managed enterprise. His first stage of reforms was to build a new solid management structure [see Exhibits 7 to9]. Instead of recruiting people with management experience, eg, those with MBAs, he promoted his own employees, asked middle managers to take management courses and groomed them to become members of the company’s board of directors. He planned to issue company shares to them so as to change the employer–employee relationship into a partner relationship. Together, Liu Junior and his employees set long-term goals for the next three years. While he was responsible for the annual corporate target, others were responsible for different sub-targets, such as technology, human resources, finance and sales, each taking charge of his or her own area.

19 Interview with Liu Junior, 28 April 2006.

20 Wang Yafei. 「 Wei Si Xin Dong：Qi Ge Yi - Ji Kuai Su Fa Zhan De Zhuhai Wei Si Youxian Gongsi」《China Information Security》(March 2001) p. 27 (王雅飛.「偉思心動: 七個億—記快速發展的珠海偉思有限公司」《信息安全與通信保密》).

21 Interview with Liu Senior, 27 July 2006.

Liu Junior also improved the efficiency of the R&D department by farming out most of the work to universities, exploiting the research facilities and talents there. He said he was an open-minded person and was not afraid of facing challenges or making mistakes. He liked changes and had tried different ways to solve problems. In order to relieve the administrative bottleneck that the company had been experiencing, he delegated decision-making to the lower echelon management. Liu Junior said he, unlike his father who liked to keep himself very busy all the time, preferred to share his burden with others. In doing so, Liu Junior said he could have a better quality of life.22

According to Liu Junior’s plan, the second stage of company reforms was to build a new company culture based on business ethics.23 He said he wanted to instil in his staff a culture that could distinguish doing the right thing from the wrong. He did not want situations where, for example, his sales staff received an order but sold the contract to a competitor, pocketing the money. Only when management and employees shared the same culture and had the same ethical standard could the company maintain its operations. He hoped that the management team would set an example for the whole company and that the new culture would gradually permeate throughout the company, building a sustainable and socially responsible business.

Challenges Faced

Soon after Liu Junior started restructuring the company, he realised that it might not be as easy as he had expected. In particular, he found that developing a responsible and accountable middle management in his company was more difficult than he had thought. He soon found out, just like in the spring of 2006 on his way to Zhuhai airport, that his middle managers were still hesitant about making important decisions such as staff dismissals. Liu Junior felt frustrated that his middle managers were still deferring these decisions to him. He did not want to see the return of the “bottleneck” situation that existed when the company was under his father’s direction. He wondered what else he needed to do so that his middle managers would feel confident enough to take charge. He had done some introspection and wondered if, deep down, he had not trusted his middle managers and that it had shown in his attitude towards them. He recalled the few times he became worried that his middle managers would make the wrong decision and kept checking back on them, questioning their decisions and eventually making the decisions himself.24 As he had great expansion plans for Victory Idea, he realised something had to be done before his company could expand further.

22 Interview with Liu Junior, 28 April 2006.

23 Interview with Liu Junior, 28 April 2006.

24 Interview with Liu Junior, 27 July 2006.

EXHIBIT 1: ZHUHAI SPECIAL ECONOMIC ZONE—BACKGROUND INFORMATION

Zhuhai is a prefecture-level city on the southern coast of Guangdong province, People’s Republic of China, with a population of 1.4 million in 2005. It is located in the Pearl River Delta and shares a strategic border with Macau and is only 36 nautical miles from Hong Kong. Zhuhai includes 190 islands and a coastline of approximately 604 km. 25

Zhuhai’s gross domestic product (“GDP”) in 2005 was US$8 billion, an increase of 13.1% over the previous year. Its per capita GDP was US$5,673.26 Zhuhai’s environmental protection program had been exemplary, with a per capita Green GDP of US$3,816 in 2003, which topped the whole Guangdong province. 27

Zhuhai became a Special Economic Zone in 1980 and the government planned to develop it into a powerful modern port city, a science and education city, a scenic and tourism-driven city, and a regional hub for transportation. Zhuhai’s outstanding geographic location, with a wide range of supporting infrastructures and a deep-water port, served as a big magnet for foreign capital. Indeed, the utilised foreign investment reached US$940 million in 2002. Of the top 500 global enterprises, 19 had investment projects in Zhuhai and included companies such as Esso Mobil, British Petroleum, Siemens, Carrefour and Matsushita.

Industrial development in Zhuhai is centred around five new high-tech and heavy industries including computer software, electronics, biotechnology and pharmacy, machinery and equipment, as well as petrochemical industries.28 Aiming to strengthen the existing industrial base and also to provide a better environment for the development of new high-tech industries, the local government took the initiative to develop five economic zones such as the Zhuhai High-Tech Industrial Development Zone. Attracted by the local government’s strong support, together with many concessions and tax breaks, a number of high-tech companies, including Victory Idea Company Limited, were established.

Besides industrial development, Zhuhai has also become a sought after holiday resort location for mainland Chinese. After 20 years of industrialisation, China’s economy has grown rapidly. More and more Chinese have become affluent and they know how to enjoy their hard-earned money by purchasing brand name products, luxury cars and indulging in expensive vacations. Fresh air, beautiful beaches, and a natural environment with modern facilities are Zhuhai’s most valuable resources that attract many wealthy Chinese to this coastal paradise to relax and enjoy the sun, the warm sea and the delicious seafood. Bao Jigang, a professor at Zhongshan University commissioned as city planner by the Zhuhai municipal government, commented that Zhuhai is more modern and westernised than other Chinese cities, such as Chengdu in Sichuan and Hangzhou in Zhejiang, which are also famous for their leisurely lifestyle.29

25 2005年珠海市国民经济和社会发展统计公报 2006年3月22日https://www.wendangku.net/doc/ff13226789.html,/bulletin/index.htm (accessed 2 October 2007).

26 2005年珠海市国民经济和社会发展统计公报 2006年3月22, 日http:// https://www.wendangku.net/doc/ff13226789.html,/bulletin/index.htm (accessed 2 October 2007).

27 “珠海：科學發展的城市樣本” 2006-07-24 07:10:00 CCTV《經濟信息聯播》https://www.wendangku.net/doc/ff13226789.html, 中小企

https://www.wendangku.net/doc/ff13226789.html,/cgi-bin/news/show_news.cgi?type=build&date=2006-07-24&id=300817 (accessed 25 August 2006).

28 Wikipedia, “Zhuhai” 28 September 2007 , https://www.wendangku.net/doc/ff13226789.html,/wiki/Zhuhai (accessed 2 October 2007).

29 “Zhuhai Travel China, Zhuhai Tour Guide” https://www.wendangku.net/doc/ff13226789.html,/China_Zhuhai_travel.html (accessed 25 August 2006).

EXHIBIT 2: VICTORY IDEA—HISTORY OF DEVELOPMENT

1998 Started R&D and production of information security products

2000 Initial launch of network security Physical Separation Cards in the domestic market

2000 Distribution companies set up in Beijing and Shanghai

products

2002 Launched

ViGap

2003-2005 Listed among top 100 e-government IT companies in three consecutive years, and ranked no. 39 in 2005

2005 Launched high-end ViGap products in the market

Source: Victory Idea (January 2006) “Slide 4”, PowerPoint presentation.

EXHIBIT 3: COST AND PRICE OF PHYSICAL SEPARATION CARD AND VIGAP

Source: Victory Idea (January 2006) “Slide 19”, PowerPoint presentation.

EXHIBIT 4: 863 PROGRAM

The National High Technology Research and Development Program (863 Program) was launched in March 1986 with the aim of enhancing China’s international competitiveness and improving its overall capability of R&D in high technology. The Program covers 20 subject topics selected from eight priority areas: biotechnology, information technology, automation, energy, advanced materials, marine, space and laser. The first six areas are managed by the Ministry of Science and Technology (MOST).

Source: The National High Technology Research and Development Program (863 Program) (1999) “Annual Report” https://www.wendangku.net/doc/ff13226789.html,/english/annual_report/annual_repor_1999.html (accessed 18 September 2006).

EXHIBIT 5: VICTORY IDEA’S CLIENTS AND THE YEAR THEY BECAME CLIENTS

Name of Client Year Organisation Department of the Communist Party of China Central Committee (中共中央組織部)

2003 Legislative Affairs Office of the State Council (國務院法制辦) 2003 All-China Women’s Federation (全國婦女聯合會) 2003

Branch Information Systems of People’s Bank of China and Commercial Banks (人民銀行及各商業銀行分行系統) 2003–2006

China National Electronics Import and Export Corporation (中國電子進出口

總公司)

2004 Ministry of Finance (國家財政部) 2004 State Bureau of Coal Industry (國家煤炭工業部) 2004 China State Ship-Building Corporation (中國船舶工業總公司) 2004 China Oil and Food Stuff Import and Export Corporation (中國糧油食品進

出口總公司)

2004 General Administration of Civil Aviation of China (國家航空局) 2005 Supreme People’s Court (最高人民法院) 2005 Hong Kong and Macao Affairs Office of the State Council (國務院港澳辦) 2005 State Administration of Foreign Exchange (Beijing, Shanghai and Guangdong branches) (國家外匯管理中心)

2005

Supreme People’s Procuratorate (最高人民檢察院) 2005 China Aerospace Science and Industry Corporation (中國航天科工集團) 2005 Diao Yu Tai State Guest House (釣魚台國賓館) 2006 State Administration of Religious Affairs (國家宗教事務管理局) 2006 Major Stock Exchanges (全國各大證券中心) 2006 General Administration of Press and Publication (國家新聞出版總署) 2006 Shanghai Gold Exchange (上海黃金交易所) 2006 People’s Bank of China Clearing Centre (人民銀行結算中心) 2006 China Ordinance Industry General System Department (中國兵器工業系統

總體部)

2006 Headquarters of Shenyang Military Area Command (瀋陽軍區司令部) 2006 Headquarters of Nanjing Military Area Command (南京軍區司令部) 2006 China Central Television (中央電視台) 2006 China Unicom (中國聯通) 2006 China Mobile (中國移動) 2006 Ministry of Public Security of the People’s Republic of China and the Police Information System (中國公安部及公安系統)

Pending

Commission of Science, Technology and Industry for National Defence Information System (國防科工委系統)

Pending China Post Information System (國家郵政系統) Pending Source: E-mail from Mr Liu Junior, 2 March 2007.

EXHIBIT 6: FOLLOW-UP PRODUCT SUPPORT AND SERVICES

1.Quality Guarantee: Provide product maintenance, free exchange of products and free upgrades within three years from date of purchase.

2.Initiative Service: Provide customers with initiative service and technological support through the telephone or the internet.

3.Follow-up: Initiate a telephone interview with customers within 3 months of purchase and product maintenance and upgrade once every three months.

Source: Victory Idea (January 2006) “Slide 13”, PowerPoint presentation.

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E X H I B I T 7: V I C T O R Y I D E A —O R G A N I S A T I O N C H A R T (E A R L Y S T A G E )

S o u r c e : E -m a i l f r o m L i u J u n i o r , 2 a n d 6 M a r c h 2007.

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E X H I B I T 8: V I C T O R Y I D E A —O R G A N I S A T I O N C H A R T (C U R R E N T )

S o u r c e : E -m a i l f r o m L i u J u n i o r , 2 a n d 6 M a r c h 2007.

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17

E X H I B I T 9: V I C T O R Y I D E A —O R G A N I S A T I O N C H A R T (

F U T U R E )

S o u r c e : E -m a i l f r o m L i u J u n i o r , 2 a n d 6 M a r c h 2007.

07/340C Developing effective middle management in an entrepreneurial firm in China

EXHIBIT 10: PERSONALITIES

Liu Jinhai (Liu Senior)—Chairman and president, Zhuhai Victory Idea Company Limited

Liu Yuan (Liu Junior)—CEO and sales director, Zhuhai Victory Idea Company Limited. Son of Liu Jinhai.

Source: Interview with Liu Senior and Li Junior, 27 July 2006.

人教版六年级上册、下册英语短语及词组总汇汇编

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