SlideShare a Scribd company logo
1 of 4
Download to read offline
Volume 4, Issue 1, 2009
                                                            casestudy
Tsingtao: Culture Transformation in China’s Oldest Beer Company

                               What does culture                    Transformation: Promoting a New Culture
                               reform look like in                  The 100-year-old beer company is steeped in
                               China’s oldest beer                  tradition, history, and culture and they recognized
                               company? Tsingtao                    that to keep their position and grow in the
                               Beer, China’s largest                international stage, they would need to make
                               exporters of beer,                   some transformations. As early as 2001, Tsingtao
                               was established in                   began to implement their “stronger then larger”
                               1903 by German                       growth strategy, encompassing deep organizational
                               settlers in Qingdao,                 reforms. The task in front of them was to improve
China. They have a national marketing network with                  the organizational culture and use it as a competitive
over 50 production plants and export to over 50                     advantage, while keeping in line with the new
countries and regions globally. Today, their vision is to           organizational strategy. They understood that this
become a large international company with a globally                shift would be a process and involve many areas of
influential brand and they are poised to confirm their              the organization over time.
strategic position as the “Chinese Beer Industry
Leader and International Market Pioneer.”                           In 2005, they focused their efforts by embarking on
                                                                    a transformation model with thee key focus areas, to
In the recent decade, Tsingtao has been taking a                    transform from:
hard look at their culture. Mobilizing their organization
to move from a “larger then stronger” growth                        1. A production oriented model to a market oriented
mentality to that of a “stronger then larger” strategy,                model
they’ve initiated deep organizational reforms from top              2. Product management to brand management
to bottom keeping culture central every step of the                 3. Expansion of production capacity to optimize
way. In this process, they reorganized their business                  operations capabilities
models and integrated many functions and systems
as they transitioned from a traditional Chinese state-              After doing substantial work within the organization
run organization to an organization tooled and skilled              to communicate the new culture at the upper
for the future on the international stage.                          levels, they explored the relationship between the
                                                                    company’s culture and their operational functions.
Their challenges have been many. With mergers                       They established the operational system of Tsingtao’s
and acquisitions having been their primary growth                   culture with four major modules: organization,
mechanism, Tsingtao had aquired over 40 factories                   institution, transmission, and evaluation.
throughout China. In this highly fragmented
environment they now needed to really focus on and                  • Organization: At the organizational level, they
emphasize their own brand. They had to change                         set up two coaches and two employees within
their strategy from simply producing a product to                     each unit to carry out training. In this way, they
understanding and commanding a market. Tsingtao                       enabled everyone to take responsibility for the
knew they needed to devise a strategy that would                      company culture project and reinforced the
address these important issues.                                       communication of the cultural messages at a
                                                                      personal level.

     All content © copyright 2005-2009 Denison Consulting, LLC. All rights reserved.   l   www.denisonculture.com   l   Page 1
• Institutional: “Corporate Culture Strategy                        newsletters were also used, as were special events
  Planning” was a plan developed for providing                      and training.
  guidance for the establishment of long term
  goals. This standardization, including templates                  Evaluating the Culture
  for out-of-town companies, guaranteed the
                                                                    Tsingtao had done extensive work developing
  alignment of strategy and the continuity of
                                                                    their own model to measure culture and employee
  implementation across the larger organization.
                                                                    satisfaction along with other quantitative data
• Methods of Transmission: Tsingtao integrated
                                                                    collections. The Denison Organizational Culture
  management training, communications, press,
                                                                    Survey also played an important role in evaluating
  intranet, social activities and other methods at the
                                                                    Tsingtao’s culture. Having first learned about it
  grass roots level to spread and reinforce the new
                                                                    in the Harvard Business Review China article
  cultural message.
                                                                    “Organizational Culture: Measuring and Developing
• Evaluation: The evaluation component included
                                                                    It in Your Organization” (March, 2005), they
  the independent development of assessment and
                                                                    administered the survey internally. In 2006/2007
  evaluation tools. Accumulating the data based
                                                                    Tsingtao turned to Mobley Group Pacific (MGP),
  on unique characteristics within the company’s
                                                                    Denison Consulting’s partner in Asia, for help with
  culture allowed them to develop a basis for future
                                                                    their survey results. Working in partnership with
  corporate culture strategic plans.
                                                                    MGP, Tsingtao was able to objectively evaluate the
                                                                    strengths and challenges of their current culture.
In promoting the new corporate culture,
                                                                    MGP helped Tsingtao review their results and turn
communication played an active motivational role
                                                                    them into action plans that integrated with their
for the employees. Each work unit had a different
                                                                    existing culture initiatives.
understanding of the culture. Measures were taken to
reinforce the culture through focus groups by sharing
                                                                    One component of this was to develop a balanced
their ideas and best practices. They found that this
                                                                    scorecard approach that included awards based
kind of face-to-face communication was effective
                                                                    on how well units integrated and embodied the
for most people within the organization. Written
                                                                    company’s new culture messages. Awards such
communications in the form of policies, books,
                                                                    as “Corporate Culture Star Work Units” and
 The Denison Model




 The Denison Model applies solid organizational culture priciples across industry, geographic region and
                                                                                            Copyright © Denison Consulting LLC, All Rights Reserved




 sector. Tsingtao Beer used the Denison Organizational Culture survey to measure their organization’s
 health and achievement of their goals. English and Chinese Simplified circumplex graphs shown above.



    All content © copyright 2005-2009 Denison Consulting, LLC. All rights reserved.   l   www.denisonculture.com                                      l   Page 2
“Outstanding Corporate Culture Workers” were                        rather than books and classes. It is their belief that
personally handed out by the chairman annually.                     this type of knowledge transfer will better enhance
Using the scorecard approach provided them with                     the transformation of a worker from a traditional
constant data about how well they were achieving                    employee to a knowledgeable and innovated
their goals while also allowing opportunities for                   employee.
feedback among each of the work units and groups.
                                                                    Participation in the “Knowledge Channel” has
Overcoming Challenges                                               expanded since its beginning with over 2000
                                                                    registered users. The knowledge channel has
The foundation of the company was based in the era                  covered the headquarters, marketing and work units
of China’s planned economy with a production model                  within production and manufacturing.
that was fairly closed. Legacy ideas with regards to
personnel such as “once promoted, never demoted”                    Finally, a third way they focused on Capability
and “once in, never out” still lingered in the company.             Development, was through the revision and
Still, there was a sense that the culture work done                 implementation of an employee behavior code. They
up to this point was starting to pay off and measures               encouraged employees to provide opinions on the
were being taken to change that mindset. The                        employee code of behavior. The company set forth
company believed that constant reflection allowed                   the overall employee code and then asked each
them to improve. Employees reflected not on what
                                                                    work unit to detail out plans for certain aspects of
they had done that day but rather on whether                        the code. For example, the museum planned out
they were able to make the changes necessary to                     details for appearance and etiquette, while sales
improve their culture. A significant change in their                and marketing looked at character and ethics. They
thinking here was to find good employee skills for                  were allowed flexibility in how each unit presented
each position. They consciously found people to fit                 these concepts to the rest of the company. Units
the right jobs; valuing performance over seniority.                 were able to present through cartoons, animations,
They also stopped the practice of promoting                         movies, and stories, etc. As a result of this increased
employees simply based on seniority.                                involvement and empowerment, the company
                                                                    reports employees have improved in their code of
Another area of focus was Capability Development.                   behavior.
When the organization redefined and raised the
company’s objectives, the employees themselves
believed their abilities to be inadequate. The                      Training programs have seen significant increase
company now had clear and specific definitions for                  throughout the organization. Tsingtao made strides
each job and role; the employees were now being                     to standardize their training program management
molded to fit the company’s requirements and better                 and expanded their training opportunities. Their
satisfy the needs of the business strategy. To aid this,            training materials include over 760 works. In 2007,
Tsingtao established the “Tsingtao Beer Management                  they implemented over 90 training programs, 320
Institute” to develop resources, training courses,                  workshops with 13,751 participants. In Qingdao,
and to continue to cultivate the culture message                    training fees for 2007 were up 16% from 2006.
throughout the organization.
                                                                    Business Awards and Growth
Another way they were focusing on Capability                        In 2007, they were named number one in “China’s
Development is through knowledge management.                        500 Most Valuable Brands” by the World Brand
The “Knowledge Channel” was launched in                             Laboratory. They also won the “2007 Most Globally
September of 2007. The “Knowledge Channel” is                       Competitive Chinese Company” award and the
a forum employees can use to access information                     “2007 Chinese Implementation of Strategy Star
and share experiences and best practices. It was                    Organization Award.” In 2008, they received the
based on the idea that transferring knowledge is                    “Best Management Practice Award” of Chinese
best done through shared stories of work experience                 companies.


      All content © copyright 2005-2009 Denison Consulting, LLC. All rights reserved.   l   www.denisonculture.com   l   Page 3
Key economic indicators such as sales volume,
revenue and retained profits continue to increase.
In 2008, they saw a $2.2 Billion revenue with $100                                       Tsingtao Beer
Million in profits. Early 2009 reports show they have
maintained a 26.7% growth in their gross revenue                                      Joint Stock Co, Ltd.
even in tough economic times. They have also been
expanding and in March of 2009 announced a joint
venture with a group of investors in Thailand to                        1903
establish their first brewery outside of China.                         Founded by German Brewers
                                                                        1915
Tsingtao attributes much of its growth in the last                      Taken over by the Japanese in WWI
decade to the changes in their culture. The new                         1945
culture system helped them keep key talent in the                       Under supervision of Nationalist government
right positions with a better understanding of what                     in Nanjing
was expected of employees. They feel optimistic                         1949
about the progress they have made.                                      Became a State Owned Enterprise under the
                                                                        People’s Republic of China
                                                                        1972
                                                                        Tsingtao Beer introduced in the United States
                                                                        1990s
 Related Resources                                                      Company privatized
 “Tsingtao Beer Joint Stock Co., Ltd.” Harvard                          1993
 Business Review China (February, 2008)                                 Merged with three other breweries in
 http://www.hbrchina.com/c/action_prize_article.                        Qingdao
 do?layoutId=7&columnId=6&cateId=23&articleId=                          2009
 830                                                                    Asahi aquired 20% ownership from
                                                                        Anheuser-Busch InBev
 “Organizational Culture: Measuring and                                 Formed a JV to open a brewery in Thailand
 Developing It in Your Organization” Harvard                            - the first venture outside China.
 Business Review China (March, 2005)

 “Tsingtao Brewery” http://en.wikipedia.org/wiki/
 Tsingtao_Brewery

 “China’s prized Tsingtao Beer setting up here.”                                               This case study was written in
 Ekvitthayavechnukul, Chalida. The Nation (March                                               cooperation with our partners
 28, 2009)                                                                                     Mobley Group Pacific with offic-
 http://www.nationmultimedia.com/2009/03/28/                                                   es in Shanghai and Hong Kong.
                                                                                               To learn more about MGP, visit:
 business/business_30099081.php
                                                                                               www.mobleygrouppacific.com


Contact Information                                                Copyright Information
Denison Consulting, LLC                                            Copyright 2005-2009 Denison Consulting, LLC
121 West Washington, Suite 201                                     All Rights Reserved.
Ann Arbor, Michigan 48104                                          Unauthorized reproduction, in any manner, is prohibited.
Phone: (734) 302-4002                                              The Denison model, circumplex and survey are trade-
Fax: (734) 302-4023                                                marks of Denison Consulting, LLC.
Email: TalkToUs@denisonconsulting.com                              Version 1.0, April 2009


    All content © copyright 2005-2009 Denison Consulting, LLC. All rights reserved.   l   www.denisonculture.com   l   Page 4

More Related Content

Similar to Tsingtao: Culture Transformation in China’s Oldest Beer Company

Mergers & Acquisitions: How Organizational Culture Can Make or Break Your M&A...
Mergers & Acquisitions: How Organizational Culture Can Make or Break Your M&A...Mergers & Acquisitions: How Organizational Culture Can Make or Break Your M&A...
Mergers & Acquisitions: How Organizational Culture Can Make or Break Your M&A...Denison Consulting
 
aAdvantage Consulting-Design and Build a Culture that Supports Your Vision
aAdvantage Consulting-Design and Build a Culture that Supports Your VisionaAdvantage Consulting-Design and Build a Culture that Supports Your Vision
aAdvantage Consulting-Design and Build a Culture that Supports Your VisionaAdvantage Consulting Group Pte Ltd
 
Npd presentation-g6-latifi,mostafavi,felfeli
Npd presentation-g6-latifi,mostafavi,felfeliNpd presentation-g6-latifi,mostafavi,felfeli
Npd presentation-g6-latifi,mostafavi,felfeliOmid Aminzadeh Gohari
 
article_transforming_culture_in_larger_organizations
article_transforming_culture_in_larger_organizationsarticle_transforming_culture_in_larger_organizations
article_transforming_culture_in_larger_organizationsDario Gnoato
 
Avaya: Culture Transformation through Alignment
Avaya: Culture Transformation through AlignmentAvaya: Culture Transformation through Alignment
Avaya: Culture Transformation through AlignmentDenison Consulting
 
Ways to Develop Innovation Culture
Ways to Develop Innovation CultureWays to Develop Innovation Culture
Ways to Develop Innovation CultureSeta Wicaksana
 
Making the most out of corporate social responsibility
Making the most out of  corporate social responsibilityMaking the most out of  corporate social responsibility
Making the most out of corporate social responsibilityAneesh Suresh
 
Building a culture of collaboration and innovation wp
Building a culture of collaboration and innovation wpBuilding a culture of collaboration and innovation wp
Building a culture of collaboration and innovation wpJordi Pera Segarra
 
Blue Beyond's Approach to Evolving Organizational Culture
Blue Beyond's Approach to Evolving Organizational CultureBlue Beyond's Approach to Evolving Organizational Culture
Blue Beyond's Approach to Evolving Organizational CultureBlue Beyond Consulting
 
organizational culture
organizational culture organizational culture
organizational culture UthishAravind
 
C com bgfirms_engl
C com bgfirms_englC com bgfirms_engl
C com bgfirms_englANISH KUMAR
 
research project - organizational change
research project  - organizational changeresearch project  - organizational change
research project - organizational changeAdelia Kolbe
 
Organizational Culture Is The Most Important Variable That...
Organizational Culture Is The Most Important Variable That...Organizational Culture Is The Most Important Variable That...
Organizational Culture Is The Most Important Variable That...Debra Perea
 
Current issues in hrd
Current issues in hrdCurrent issues in hrd
Current issues in hrdPriya Guleria
 
Organizational Culture
Organizational CultureOrganizational Culture
Organizational CultureKaustubh Barve
 

Similar to Tsingtao: Culture Transformation in China’s Oldest Beer Company (20)

Mergers & Acquisitions: How Organizational Culture Can Make or Break Your M&A...
Mergers & Acquisitions: How Organizational Culture Can Make or Break Your M&A...Mergers & Acquisitions: How Organizational Culture Can Make or Break Your M&A...
Mergers & Acquisitions: How Organizational Culture Can Make or Break Your M&A...
 
Communicating corporate culture
Communicating corporate cultureCommunicating corporate culture
Communicating corporate culture
 
aAdvantage Consulting-Design and Build a Culture that Supports Your Vision
aAdvantage Consulting-Design and Build a Culture that Supports Your VisionaAdvantage Consulting-Design and Build a Culture that Supports Your Vision
aAdvantage Consulting-Design and Build a Culture that Supports Your Vision
 
Npd presentation-g6-latifi,mostafavi,felfeli
Npd presentation-g6-latifi,mostafavi,felfeliNpd presentation-g6-latifi,mostafavi,felfeli
Npd presentation-g6-latifi,mostafavi,felfeli
 
article_transforming_culture_in_larger_organizations
article_transforming_culture_in_larger_organizationsarticle_transforming_culture_in_larger_organizations
article_transforming_culture_in_larger_organizations
 
Avaya: Culture Transformation through Alignment
Avaya: Culture Transformation through AlignmentAvaya: Culture Transformation through Alignment
Avaya: Culture Transformation through Alignment
 
Ways to Develop Innovation Culture
Ways to Develop Innovation CultureWays to Develop Innovation Culture
Ways to Develop Innovation Culture
 
Making the most out of corporate social responsibility
Making the most out of  corporate social responsibilityMaking the most out of  corporate social responsibility
Making the most out of corporate social responsibility
 
Building a culture of collaboration and innovation wp
Building a culture of collaboration and innovation wpBuilding a culture of collaboration and innovation wp
Building a culture of collaboration and innovation wp
 
Innovation, Corporate Culture and the Game of Ping Pong
Innovation, Corporate Culture and the Game of Ping PongInnovation, Corporate Culture and the Game of Ping Pong
Innovation, Corporate Culture and the Game of Ping Pong
 
Live culture
Live cultureLive culture
Live culture
 
Blue Beyond's Approach to Evolving Organizational Culture
Blue Beyond's Approach to Evolving Organizational CultureBlue Beyond's Approach to Evolving Organizational Culture
Blue Beyond's Approach to Evolving Organizational Culture
 
organizational culture
organizational culture organizational culture
organizational culture
 
C com bgfirms_engl
C com bgfirms_englC com bgfirms_engl
C com bgfirms_engl
 
research project - organizational change
research project  - organizational changeresearch project  - organizational change
research project - organizational change
 
Organizational Culture Is The Most Important Variable That...
Organizational Culture Is The Most Important Variable That...Organizational Culture Is The Most Important Variable That...
Organizational Culture Is The Most Important Variable That...
 
Thesis outline
Thesis outlineThesis outline
Thesis outline
 
Npd final
Npd finalNpd final
Npd final
 
Current issues in hrd
Current issues in hrdCurrent issues in hrd
Current issues in hrd
 
Organizational Culture
Organizational CultureOrganizational Culture
Organizational Culture
 

Recently uploaded

BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John MeulemansBCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John MeulemansBBPMedia1
 
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...AustraliaChapterIIBA
 
Anyhr.io | Presentation HR&Recruiting agency
Anyhr.io | Presentation HR&Recruiting agencyAnyhr.io | Presentation HR&Recruiting agency
Anyhr.io | Presentation HR&Recruiting agencyHanna Klim
 
7movierulz.uk
7movierulz.uk7movierulz.uk
7movierulz.ukaroemirsr
 
Plano de marketing- inglês em formato ppt
Plano de marketing- inglês  em formato pptPlano de marketing- inglês  em formato ppt
Plano de marketing- inglês em formato pptElizangelaSoaresdaCo
 
A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.mcshagufta46
 
MoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor PresentationMoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor Presentationbaron83
 
To Create Your Own Wig Online To Create Your Own Wig Online
To Create Your Own Wig Online  To Create Your Own Wig OnlineTo Create Your Own Wig Online  To Create Your Own Wig Online
To Create Your Own Wig Online To Create Your Own Wig Onlinelng ths
 
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for BusinessQ2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for BusinessAPCO
 
Lecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb toLecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb toumarfarooquejamali32
 
Introduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxIntroduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxJemalSeid25
 
Entrepreneurship & organisations: influences and organizations
Entrepreneurship & organisations: influences and organizationsEntrepreneurship & organisations: influences and organizations
Entrepreneurship & organisations: influences and organizationsP&CO
 
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...Brian Solis
 
Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..dlewis191
 
Developing Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, OursDeveloping Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, OursKaiNexus
 
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...TalentView
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access
 
NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023Steve Rader
 

Recently uploaded (20)

BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John MeulemansBCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
 
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
 
Anyhr.io | Presentation HR&Recruiting agency
Anyhr.io | Presentation HR&Recruiting agencyAnyhr.io | Presentation HR&Recruiting agency
Anyhr.io | Presentation HR&Recruiting agency
 
7movierulz.uk
7movierulz.uk7movierulz.uk
7movierulz.uk
 
Plano de marketing- inglês em formato ppt
Plano de marketing- inglês  em formato pptPlano de marketing- inglês  em formato ppt
Plano de marketing- inglês em formato ppt
 
A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.
 
MoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor PresentationMoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor Presentation
 
To Create Your Own Wig Online To Create Your Own Wig Online
To Create Your Own Wig Online  To Create Your Own Wig OnlineTo Create Your Own Wig Online  To Create Your Own Wig Online
To Create Your Own Wig Online To Create Your Own Wig Online
 
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for BusinessQ2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
 
Lecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb toLecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb to
 
Introduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxIntroduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptx
 
Entrepreneurship & organisations: influences and organizations
Entrepreneurship & organisations: influences and organizationsEntrepreneurship & organisations: influences and organizations
Entrepreneurship & organisations: influences and organizations
 
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
 
Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..
 
WAM Corporate Presentation Mar 25 2024.pdf
WAM Corporate Presentation Mar 25 2024.pdfWAM Corporate Presentation Mar 25 2024.pdf
WAM Corporate Presentation Mar 25 2024.pdf
 
Developing Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, OursDeveloping Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, Ours
 
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024
 
Investment Opportunity for Thailand's Automotive & EV Industries
Investment Opportunity for Thailand's Automotive & EV IndustriesInvestment Opportunity for Thailand's Automotive & EV Industries
Investment Opportunity for Thailand's Automotive & EV Industries
 
NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023
 

Tsingtao: Culture Transformation in China’s Oldest Beer Company

  • 1. Volume 4, Issue 1, 2009 casestudy Tsingtao: Culture Transformation in China’s Oldest Beer Company What does culture Transformation: Promoting a New Culture reform look like in The 100-year-old beer company is steeped in China’s oldest beer tradition, history, and culture and they recognized company? Tsingtao that to keep their position and grow in the Beer, China’s largest international stage, they would need to make exporters of beer, some transformations. As early as 2001, Tsingtao was established in began to implement their “stronger then larger” 1903 by German growth strategy, encompassing deep organizational settlers in Qingdao, reforms. The task in front of them was to improve China. They have a national marketing network with the organizational culture and use it as a competitive over 50 production plants and export to over 50 advantage, while keeping in line with the new countries and regions globally. Today, their vision is to organizational strategy. They understood that this become a large international company with a globally shift would be a process and involve many areas of influential brand and they are poised to confirm their the organization over time. strategic position as the “Chinese Beer Industry Leader and International Market Pioneer.” In 2005, they focused their efforts by embarking on a transformation model with thee key focus areas, to In the recent decade, Tsingtao has been taking a transform from: hard look at their culture. Mobilizing their organization to move from a “larger then stronger” growth 1. A production oriented model to a market oriented mentality to that of a “stronger then larger” strategy, model they’ve initiated deep organizational reforms from top 2. Product management to brand management to bottom keeping culture central every step of the 3. Expansion of production capacity to optimize way. In this process, they reorganized their business operations capabilities models and integrated many functions and systems as they transitioned from a traditional Chinese state- After doing substantial work within the organization run organization to an organization tooled and skilled to communicate the new culture at the upper for the future on the international stage. levels, they explored the relationship between the company’s culture and their operational functions. Their challenges have been many. With mergers They established the operational system of Tsingtao’s and acquisitions having been their primary growth culture with four major modules: organization, mechanism, Tsingtao had aquired over 40 factories institution, transmission, and evaluation. throughout China. In this highly fragmented environment they now needed to really focus on and • Organization: At the organizational level, they emphasize their own brand. They had to change set up two coaches and two employees within their strategy from simply producing a product to each unit to carry out training. In this way, they understanding and commanding a market. Tsingtao enabled everyone to take responsibility for the knew they needed to devise a strategy that would company culture project and reinforced the address these important issues. communication of the cultural messages at a personal level. All content © copyright 2005-2009 Denison Consulting, LLC. All rights reserved. l www.denisonculture.com l Page 1
  • 2. • Institutional: “Corporate Culture Strategy newsletters were also used, as were special events Planning” was a plan developed for providing and training. guidance for the establishment of long term goals. This standardization, including templates Evaluating the Culture for out-of-town companies, guaranteed the Tsingtao had done extensive work developing alignment of strategy and the continuity of their own model to measure culture and employee implementation across the larger organization. satisfaction along with other quantitative data • Methods of Transmission: Tsingtao integrated collections. The Denison Organizational Culture management training, communications, press, Survey also played an important role in evaluating intranet, social activities and other methods at the Tsingtao’s culture. Having first learned about it grass roots level to spread and reinforce the new in the Harvard Business Review China article cultural message. “Organizational Culture: Measuring and Developing • Evaluation: The evaluation component included It in Your Organization” (March, 2005), they the independent development of assessment and administered the survey internally. In 2006/2007 evaluation tools. Accumulating the data based Tsingtao turned to Mobley Group Pacific (MGP), on unique characteristics within the company’s Denison Consulting’s partner in Asia, for help with culture allowed them to develop a basis for future their survey results. Working in partnership with corporate culture strategic plans. MGP, Tsingtao was able to objectively evaluate the strengths and challenges of their current culture. In promoting the new corporate culture, MGP helped Tsingtao review their results and turn communication played an active motivational role them into action plans that integrated with their for the employees. Each work unit had a different existing culture initiatives. understanding of the culture. Measures were taken to reinforce the culture through focus groups by sharing One component of this was to develop a balanced their ideas and best practices. They found that this scorecard approach that included awards based kind of face-to-face communication was effective on how well units integrated and embodied the for most people within the organization. Written company’s new culture messages. Awards such communications in the form of policies, books, as “Corporate Culture Star Work Units” and The Denison Model The Denison Model applies solid organizational culture priciples across industry, geographic region and Copyright © Denison Consulting LLC, All Rights Reserved sector. Tsingtao Beer used the Denison Organizational Culture survey to measure their organization’s health and achievement of their goals. English and Chinese Simplified circumplex graphs shown above. All content © copyright 2005-2009 Denison Consulting, LLC. All rights reserved. l www.denisonculture.com l Page 2
  • 3. “Outstanding Corporate Culture Workers” were rather than books and classes. It is their belief that personally handed out by the chairman annually. this type of knowledge transfer will better enhance Using the scorecard approach provided them with the transformation of a worker from a traditional constant data about how well they were achieving employee to a knowledgeable and innovated their goals while also allowing opportunities for employee. feedback among each of the work units and groups. Participation in the “Knowledge Channel” has Overcoming Challenges expanded since its beginning with over 2000 registered users. The knowledge channel has The foundation of the company was based in the era covered the headquarters, marketing and work units of China’s planned economy with a production model within production and manufacturing. that was fairly closed. Legacy ideas with regards to personnel such as “once promoted, never demoted” Finally, a third way they focused on Capability and “once in, never out” still lingered in the company. Development, was through the revision and Still, there was a sense that the culture work done implementation of an employee behavior code. They up to this point was starting to pay off and measures encouraged employees to provide opinions on the were being taken to change that mindset. The employee code of behavior. The company set forth company believed that constant reflection allowed the overall employee code and then asked each them to improve. Employees reflected not on what work unit to detail out plans for certain aspects of they had done that day but rather on whether the code. For example, the museum planned out they were able to make the changes necessary to details for appearance and etiquette, while sales improve their culture. A significant change in their and marketing looked at character and ethics. They thinking here was to find good employee skills for were allowed flexibility in how each unit presented each position. They consciously found people to fit these concepts to the rest of the company. Units the right jobs; valuing performance over seniority. were able to present through cartoons, animations, They also stopped the practice of promoting movies, and stories, etc. As a result of this increased employees simply based on seniority. involvement and empowerment, the company reports employees have improved in their code of Another area of focus was Capability Development. behavior. When the organization redefined and raised the company’s objectives, the employees themselves believed their abilities to be inadequate. The Training programs have seen significant increase company now had clear and specific definitions for throughout the organization. Tsingtao made strides each job and role; the employees were now being to standardize their training program management molded to fit the company’s requirements and better and expanded their training opportunities. Their satisfy the needs of the business strategy. To aid this, training materials include over 760 works. In 2007, Tsingtao established the “Tsingtao Beer Management they implemented over 90 training programs, 320 Institute” to develop resources, training courses, workshops with 13,751 participants. In Qingdao, and to continue to cultivate the culture message training fees for 2007 were up 16% from 2006. throughout the organization. Business Awards and Growth Another way they were focusing on Capability In 2007, they were named number one in “China’s Development is through knowledge management. 500 Most Valuable Brands” by the World Brand The “Knowledge Channel” was launched in Laboratory. They also won the “2007 Most Globally September of 2007. The “Knowledge Channel” is Competitive Chinese Company” award and the a forum employees can use to access information “2007 Chinese Implementation of Strategy Star and share experiences and best practices. It was Organization Award.” In 2008, they received the based on the idea that transferring knowledge is “Best Management Practice Award” of Chinese best done through shared stories of work experience companies. All content © copyright 2005-2009 Denison Consulting, LLC. All rights reserved. l www.denisonculture.com l Page 3
  • 4. Key economic indicators such as sales volume, revenue and retained profits continue to increase. In 2008, they saw a $2.2 Billion revenue with $100 Tsingtao Beer Million in profits. Early 2009 reports show they have maintained a 26.7% growth in their gross revenue Joint Stock Co, Ltd. even in tough economic times. They have also been expanding and in March of 2009 announced a joint venture with a group of investors in Thailand to 1903 establish their first brewery outside of China. Founded by German Brewers 1915 Tsingtao attributes much of its growth in the last Taken over by the Japanese in WWI decade to the changes in their culture. The new 1945 culture system helped them keep key talent in the Under supervision of Nationalist government right positions with a better understanding of what in Nanjing was expected of employees. They feel optimistic 1949 about the progress they have made. Became a State Owned Enterprise under the People’s Republic of China 1972 Tsingtao Beer introduced in the United States 1990s Related Resources Company privatized “Tsingtao Beer Joint Stock Co., Ltd.” Harvard 1993 Business Review China (February, 2008) Merged with three other breweries in http://www.hbrchina.com/c/action_prize_article. Qingdao do?layoutId=7&columnId=6&cateId=23&articleId= 2009 830 Asahi aquired 20% ownership from Anheuser-Busch InBev “Organizational Culture: Measuring and Formed a JV to open a brewery in Thailand Developing It in Your Organization” Harvard - the first venture outside China. Business Review China (March, 2005) “Tsingtao Brewery” http://en.wikipedia.org/wiki/ Tsingtao_Brewery “China’s prized Tsingtao Beer setting up here.” This case study was written in Ekvitthayavechnukul, Chalida. The Nation (March cooperation with our partners 28, 2009) Mobley Group Pacific with offic- http://www.nationmultimedia.com/2009/03/28/ es in Shanghai and Hong Kong. To learn more about MGP, visit: business/business_30099081.php www.mobleygrouppacific.com Contact Information Copyright Information Denison Consulting, LLC Copyright 2005-2009 Denison Consulting, LLC 121 West Washington, Suite 201 All Rights Reserved. Ann Arbor, Michigan 48104 Unauthorized reproduction, in any manner, is prohibited. Phone: (734) 302-4002 The Denison model, circumplex and survey are trade- Fax: (734) 302-4023 marks of Denison Consulting, LLC. Email: TalkToUs@denisonconsulting.com Version 1.0, April 2009 All content © copyright 2005-2009 Denison Consulting, LLC. All rights reserved. l www.denisonculture.com l Page 4