Todd Bishop
The US’s suppression of China’s communications giant Huawei has brought the world to the company. Malaysian Deputy Prime Minister and Minister of Women, Family and Social Development Wang Azha paid an official visit to China from July 8th to July 11th. It is reported that Wang Azisha will visit the Chinese communications giant Huawei during his visit to China.
It is worth mentioning that during the visit of Malaysian Prime Minister Mahathir Mohamad on April 25, he also visited Huawei’s research institute in Beijing and met with Ren Zhengfei, the founder of Huawei.
Not only that, Mahathir also said on May 30: “Huawei’s technology far exceeds Malaysia’s technology and hopes to use (Huawei) technology as much as possible.”
The Malaysian leader “powered” Huawei, the founder of Huawei, Ren Zhengfei, was frequently interviewed and talked about the suppression of Huawei by the United States. He insisted that Huawei was already prepared and not afraid of the list of US entities. They fight.”
Ren Zhengfei’s self-confidence is not a “bluff.” According to the data, Huawei has obtained 46 fifth-generation mobile communication (5G) commercial contracts in 30 countries and has achieved shipments of more than 100,000 5G base stations worldwide. This data continues to increase.
At the same time, the United Kingdom, New Zealand, Cambodia and other countries also chose to ignore the US warning and announced cooperation with Huawei for 5G communication construction. According to the data, in the first five months of 2019, Huawei’s market share in Thailand increased from 15% in 2018 to 20%.
It can be seen that although the US government has been “catch-up” against Huawei in the international arena, it has won the support of many countries and has become the leader in this communication system competition.
Why is Huawei able to make a big splash in the 5G technology competition? What is the difference between Huawei and Huawei? Huawei’s success is certainly related to its leading 5G communication technology and the support of China’s huge market, but analysts believe that this has much to do with its “alternative” corporate system.
Compared with other international giants, Huawei is very special in the corporate system.
The first is Huawei’s experience model. Although Huawei is a private enterprise, it has never been listed and financed since its development. Ren Zhengfei also insisted that he would not let Huawei go public, and his approach is obviously inconsistent with the traditional multinational business management model.
In the theory of traditional economics, shareholders have a long-term vision, they will not pursue short-term interests, and will make very reasonable and well-documented investments in the future. In other words, if a company wants to go long-term and strong, and the necessary financing and listing are indispensable “equipment”, there are also examples to follow.
Looking at the current multinational companies, all are listed companies. For example, China’s Internet giant Alibaba, and Huawei are the communications giants of Ericsson, the US high-tech companies Qualcomm, Intel Corporation, Apple and other international giants are listed companies.
However, Ren Zhengfei’s business model of “not taking the usual path” broke this traditional theory. Ren Zhengfei has always believed that listing and a company are not necessarily inextricably linked. The foundation of Huawei is scientific research technology. Only by doing good research can enterprises be developed and powerful.
Ren Zhengfei said so, he did the same. According to the European Union’s officially published “Industrial R&D Investment Rankings for the 2018”, Huawei ranks fifth in the ranking of global R&D investment, and its research funding has reached 11.334 billion euros (1 euro or about 1.12 US dollars), occupying The company’s turnover in 2018 is 14.7%, much higher than Apple’s 5.1%.
Huawei’s R&D investment also paid off. By the end of 2018, Huawei had accumulatively granted 87,800 patents, making it one of the world’s largest patent holders.
From the leading of 5G technology to having a large number of patents, all the achievements Huawei has obtained are enough to prove that Ren Zhengfei insisted on being correct. Huawei’s success has also broken the dogmatic framework of the previous economic model, and it has emerged in an international perspective with a unique alternative economics. This is the biggest difference between Huawei and other Western giants.
Followed by Huawei’s share allocation system. In Ren Zhengfei’s view, if Huawei wants to grab the market and grab talents with world giants and Chinese companies, it will only allow more people to join Huawei if they continue to actively dilute their stocks.
Although Huawei borrowed from the Western “employee shareholding” model, it did not copy it, but on this basis, it innovated and formed a “Huawei model.” Under the operation of “Huawei Mode”, Ren Zhengfei currently holds only 1.4% of the shares, and the remaining 98.6% are held by employees.
The “Huawei model” seems to be the same as the traditional “employee shareholding” operation, but in fact the shares it sells are a special kind of stock – “virtual restricted stocks”. Every year, Huawei determines the number of shares it receives based on the employee’s work level and contribution to the company. Employees must purchase virtual shares according to the company’s net asset price for the year.
Employees with virtual shares can get a certain percentage of dividends and virtual company shares corresponding to the company’s net asset appreciation. However, the employee’s virtual shares are all held by the Huawei Trade Union Committee. They have no ownership or voting rights and cannot be transferred or sold. When an employee leaves the company, the stock can only be repurchased by the Huawei-controlled union.
Once the form of stocks is stripped, the “Huawei model” is actually a combination of collective ownership and personal income. This is also the ideal state that Marx pursues, “re-establishing personal ownership on the basis of collaboration and the common possession of the production materials produced by the land and labor itself. Such a unique enterprise system is obviously rare in the world enterprises.”
Huawei is relying on its own uniqueness to constantly grow bigger and stronger, break through the limitations of the dogmatic framework of traditional economics, and provide a new way for itself to provide a new reference for the world enterprise business incentive system. Benchmarking.
