With the rapid expansion of Chinese market, Tuthill Corp. moved the regional headquarter of East North Asia from Hongkong to Shanghai to give better service to our valued Chinese customers. Tuthill Shanghai Representative Office was established in September, 2003. I was appointed as the Chief Representative and the Regional Director to mainly cover the region of China and Korea. Tuthill Shanghai office is primary responsible for the sales & marketing and service in Chinese and Korean market on behalf of all the overseas subsidiaries of Tuthill Corp. and also involves the creation of a dynamic organizational structure, the development of a strong leadership team, and the accumulation and leveraging of Chinese market knowledge in China in the future.
Tuthill Corporation is a multinational company with over one hundred years’ history. The headquarter is located in Chicago USA and there are about 40 plants all over the world. The annual turnover of Tuthill Corporation is USD1billion. The products were classified to 9 major business units: vacuum and blower systems, pump group, coupling group, controls group, energy system, linkage group, transfer systems, plastic group and transportation technologies. The brands such as Kinney Vacuum, M-D pneumatics blower, Coppus and Murray turbine, GlobalGear pump, Reyco Granning air suspension system, Fill-Rite fuel pump, FPP flow meter, Hansen and Gromelle coupling are all under the same flag of Tuthill.
As regional director of a new established organization, I am facing many challenges:
1. Tuthill is not a well known company. As you may see, there are so many different business units in Tuthill Corporation, and the customers and products of Tuthill are quite diversified. However, each business unit of Tuthill Corporation is only middle size operation with annual turnover about USD100 million, and they are not No. 1 player in the served market, the position in the market is No. 3 or No. 4 or even No. 5 worldwide. Normally No. 1 and No.2 players in the industrial field get much more profit and market share than the others and customer normally only knows the No.1 supplier and sometimes customer will ask our sales people: who is Tuthill? At the same time, all the business units would like to promote their products with their previous company name such as Kinney, MD, Coppus and Murray etc. because all these companies were acquired by Tuthill in the past 20 years. It makes Tuthill name very weak in China although the total sales of Tuthill Corp. in China is around USD18 .5 million in 2004, the customer probably knows Kinney vacuum or Coppus turbine, but they don’t know Tuthill.
2. The different goals of Tuthill subsidiaries and complicated Tuthill organization structure in China.. Now there are two joint ventures of Tuthill Vacuum & Blower Systems in east China, one wholly owned company of Tuthill Suspension Technology business unit located in Beijing, and one global sourcing office just located as the neighbor of Tuthill Shanghai office and operated under the legal entity of Tuthill Shanghai office. The sales team of Tuthill Shanghai will have some conflict in targeted customers and sales channel with the people from Tuthill joint ventures and Tuthill Beijing company due to different report systems and business goal, the general managers of two joint ventures and Tuthill Beijing Suspension Technology all report to the president of business units in USA while Tuthill Shanghai report to managing director of Tuthill Asia Pacific.
3. Different strategy in China between each business unit and Tuthill Corporation. Each president of Tuthill Corporation would like to set up its own subsidiaries in China and control the daily operation. If all these subsidiaries are integrated in China, the presidents of each business units will lose the power and control for these subsidiaries and probably they even have to cut their manpower in USA due to the high cost in USA when Tuthill China expands and grows. However, to do business in China, all the subsidiaries under one roof is better choice for a middle size company as Tuthill Corporation.
4. Different style among American, British and Chinese. The managing director of Tuthill Asia Pacific is a British while many line of business of Tuthill Corporation are located in USA. The working style of American is quite different from that of British and Chinese. British manager is more kind than American, he balances among task, individual and team while American people is more task oriented. Chinese guy is quite flexible, his style varies depending on the boss.
5. Different systems among the several subsidiaries of Tuthill Corporation in China. Obviously the joint venture with SEC is more like state owned company with lowest efficiency and lowest remuneration, the joint venture with Japanese has much more strict systems and customer oriented systems in daily operation while the WOFE of Tuthill Beijing stated that they want to focus on future, so Tuthill Beijing Suspension has more flexible and generous training systems, expense budgeting systems and lower sales budget. All the staff in Tuthill Shanghai office would like to adopt to the system of Tuthill Beijing for training system, expense budget and sales budget systems while the management would like to maximize the profit and get cash inflow through Tuthill Shanghai office.
6. Difficult to attract talented people with good skills because of the not well known company name. In China, people always prefer to work for famous Fortune 500 companies instead of middle size multinational company. However, Tuthill Corp. Shanghai office is responsible for the business of Tuthill in China and Korea, it is a kind of international business and has high requirement in engineering background, language skill, communication skill and sales & marketing skill for the sales manager.
I was really quite confused by these problems under the complicated environments. After I attended the “Management Introduction” course of Professor Keith Goodall, I found that the 7S frameworks should be a good tool to help me solve the above issues.
7S theory told us effective organizational change is really the relationship between structure, strategy, systems, style, skill, staff and superordinate goals. 7S theories regards the shared value as the core of other 6S and requires the balance of all the 7S factors.
The followings are my recommendation for action to solve the above problems:
1st. Make the superordinate goals and shared value for Tuthill China by top management of Tuthill Corporation. To do the business is just like to fight with the adversary in the war. To win the war, you need to have unique philosophy and intelligence. Team members should have same goal and shared value and the leader should have exquisite percipience and sophisticated foresight. The CEO of Tuthill Corporation should coordinate with all presidents of business units and all the manager of Tuthill Subsidiaries in China for the shared value for Tuthill China development. The vision of Tuthill China should involve the delicate balance of three “stakeholders”, the customer, the employee, and the shareholder. These shared values should been cascaded down throughout Tuthill China to ensure our efforts are focused and aligned to increase our likelihood of success. All the relevant people should understand the employee can grow and only can grow with our company and customers.
2nd. Make clear strategy of Tuthill China. The strategy of Tuthill Corp. could be “ integrate all the present subsidiaries in China and set up a wholly owned Tuthill China within 2 years to contribute USD100 million to Tuthill’s revenue within 5 years”. Given Tuthill present understanding of the market potential, the emphasis should be placed in three areas:
Selling Tuthill’s global portfolio of products within China;
Harvesting Chinese sourcing opportunities for Tuthill’s factories worldwide;
Producing selected Tuthill products within China for Chinese market initially and global consumption eventually.
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