The Rendanheyi Model of Haier

Organizational Configurations (Mintzberg)
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Jaap de Jonge
Editor, Netherlands

The Rendanheyi Model of Haier

🔥NEW Haier, the worlds largest appliance maker, has developed a very innovative way of organizing their multinational firm. The corporation has been divided into 4.000 self managing micro enterprises, of which about 250 are market facing ("users"). The others are called "nodes". These are supplying the "users" with components and services such as HR, finance and IT.

The users may hire or fire nodes or outside providers as they see fit. All micro enterprises are ultimately accountable to the company's customers and a highly entrepreneurial culture is cultivated.

The Rendanheyi model has several innovative attributes:
1. OPEN SYSTEM OF MICROENTERPRISES: The enterprise has been transformed from a closed system to an open system, a network of self-governing microenterprises with free-flowing communication among them and mutually creative connections with outside contributors.
2. CUSTOMER-ORIENTED: Purchasers of our offerings are transformed from customers to lifetime users of products and services designed to solve their problems and increase their satisfaction.

3. LEADING TARGETS: A dynamic system in which each microenterprise is charged with pursuing ambitious goals for growth and transformation, not simply based on last year's results.
4. OPEN CONTRACTING: no internal monopolies of supplying departments like legal, IT, HR, etc., but freedom to shop outside if a better solution is available.
5. VOLUNTARY COOPERATION in so called "platforms". Platforms are aimed at serving a business industry (category, i.e. washing, gaming) or at developing a new capability, without top-down coordination.
6 OPEN INNOVATION: R&D has heavy involvement of clients, outside institutions and experts ("solvers"), and crowdsourcing is used for funding and feedback.
7. EMPLOYEE OWNERSHIP: Employees are transformed from executors of top-down directions to self-motivated contributors, in many cases choosing or electing the leaders and members of their teams.
Please add a reaction if you can contribute additional insights about this very interesting organization model.
Zhang Ruimin, "Why Haier Is Reorganizing Itself around the Internet of Things", S + B, Summer 2018, Issue 91
Gary Hamel and Michel Zanini, "The End of Buraucracy - How a Chinese appliance maker is reinventing management for the digital age", HBR Nov-Dec 2018, pp. 50-59

  Steven Cooke, Philippines

Rendanheyi Model is a Great Concept

I am so glad to see that a major company is actually doing this! Too many companies that I have been in try to resemble ...

  Paramathmuni srinivas Kumar

A Web of Things is the Way to Go

In fact using artificial intelligence concepts most of traditional functions can be automated by the occurrence of an ev...

  Gregory Johnson
Coach, United States

Rendanheyi Model is a Concentric Model by Design

I love it as it is presented. I am most interested in the dynamics of the "User Interaction" and the "Complements" featu...

  suresh Chintada, India

Rendanheyi Model is Novel and Exciting

On first reading the whole model sounds very exciting and appears to enable open innovation culture amongst the micro en...

  Paramathmuni srinivas Kumar

Integrating the Applications

@Suresh We can integrate the applications using an ontology, though conflict resolution and negotiations are possible by...

  Armando Aramayo
Business Consultant, Peru

Challenges to Success for Rendanheyi Model

The shown topic is very interesting as a way of managing complexity by distributing actions. Normally in theses cases w...

  Maurice Hogarth
Consultant, United Kingdom

Organisation Structuring

I vaguely remember (I think) that 3M structured themselves along similar lines and a number of organisations have set up...

  Carlos Alberto de Sousa
Project Manager, Brazil

Haier Model is Innovative

@Maurice Hogarth: I think Haier is innovative. Ther structured a business model that no company has, although there may...


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