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14 - Task Performance 1

Lenovo acquired IBM's personal computer business in 2004. To manage its new global operations, Lenovo: 1) Moved its global headquarters to New York and appointed the former head of IBM's PC division as CEO to retain key managers. 2) Formed a top management team that was half Chinese and half American to represent its global workforce. 3) Committed to hiring the most qualified people regardless of nationality to build a truly global enterprise.

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127 views

14 - Task Performance 1

Lenovo acquired IBM's personal computer business in 2004. To manage its new global operations, Lenovo: 1) Moved its global headquarters to New York and appointed the former head of IBM's PC division as CEO to retain key managers. 2) Formed a top management team that was half Chinese and half American to represent its global workforce. 3) Committed to hiring the most qualified people regardless of nationality to build a truly global enterprise.

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Diane
Copyright
© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
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TASK PERFORMANCE ON GLOBAL HUMAN RESOURCES

MANAGEMENT

Lenovo

In late 2004 IBM announced that it was getting out of thepersonal computer business and would sell
its entire PC operations to Lenovo, the fast-growing Chinese manufacturer of personal computers, for
$1.75 billion. The acquisition turned Lenovo into the world’s third-largest PC firm. It also raised many
questions about how a Chinese enterprise with little global exposure would manage the assets of an
American firm that had 2,400 employees in the United States, 4,000 in foreign manufacturing
facilities, and 3,600 sales and distribution centers in over 60 countries around the world.
Lenovo moved quickly to reassure employees that it was committed to building a truly global
enterprise with a global workforce. Less than 24 hours after the two companies announced the
acquisition, the human resources department at IBM’s PC division released a 59-point question and
answer memo to all employees informing them that they would become employees of Lenovo, that
their compensation and benefits would remain identical or fully comparable to their IBM package,
and that they would not be asked to reallocate. The memo also made it clear that employees could
accept employment at Lenovo or leave, with no separationpay. IBM would not consider them for a
transfer within IBM or recruit or hire the new Lenovo employees for two years.
What really surprised many observers, however, was the composition of the top management team
at the new Lenovo and the location of its global headquarters. Top executives at Lenovo were smart
enough to realize that the acquisition would have little value if IBM’s managers, engineers, and
salespeople left the company, so they moved Lenovo’s global headquarters to New York! Moreover,
the former head of IBM’s PCdivision, Stephen Ward, was appointed CEO of Lenovo, while Yang
Yuanqing, the former CEO of Lenovo, became chairman, and Lenovo’s Mary Ma became CFO. The 30-
member top management team was split down the middle—half Chinese, half American—and
boasted more women than men. English was declared the company’s new business language. The
goal, according to Yang, is to transform Lenovo into atruly global corporation with a global workforce
that is capable of going head-to-head with Dell in the battle for dominance in the global PC business.
The choice of Ward for CEO, for example, was based on the presumption that none of the Chinese
executives had the experience and capabilities required to manage a truly global enterprise. For
Lenovo, when deciding who should hold management positions, the national origin of candidate is
not an issue. Rather, the decision focusesupon whether the person has the skills and capabilities
required for working in a global enterprise. Lenovo is committed to hiring the very best people,
wherever they might come from.
Commenting on the acquisition, Bill Matson, a former IBM executive who became senior vice
president of human resources at Lenovo, noted that the company would use the same set of
principles to guide workforce management in all locations. He noted that “You have to establish the
broad principles of how you want to manage your business, but then you have to be veryastute
about how those principles are applied in every local market so that you remain responsive to the
needs of people in different environments.”
Questions (4 items x 10 points):
1. What is the staffing policy that Lenovo is pursuing?
2. What strategy do you think the company is pursuing? Does its staffing policy match its strategy?
3. What are the strengths of Lenovo’s staffing policy? Can you see any potential weaknesses or
problems that the company might encounter as a result of this policy?
4. What should the HRM function do to enable Lenovo to become a truly global enterprise?

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