Acer Inc : Taiwan Rampaging Dragon

1360 WordsJan 4, 20116 Pages
ORGANIZATIONAL BEHAVIOR Case Analysis – Acer, Inc: Taiwan’s Rampaging Dragon EXECUTIVE SUMMARY Stan Shih founded Multitech, now known as Acer, in 1976. Empowered by Shih’s vision and management style, the company grasped every opportunity that came its way. It grew from a 11-employees company to a 5000 employees company in no time. The company, however, after generating profits for years, went through the painful professionalization of its management. Change in the competitive dynamics in the PC market coupled with the internal management problems faced by Acer resulted in the incurring of substantial losses. As Stan Shih resumed his role as CEO in 1992, after the board had unanimously declined his resignation, he had the…show more content…
The idea of joining forces with the small players who believed in the commoner’s culture led to Acer’s early successes. The financial scenario for Acer under Stan Shih improved from a resulted net income of $0.4 Million in 1984 to $26.5 Million in 1988. The gross margin remained high due to the principle of frugality and the ratio between current assets to current liabilities remained positive which was reflected by the increasing stock prices. PROFESSIONALIZATION AND PROBLEMS FOR ACER With the changing market scenario in terms of competition and the resulting price wars, Acer faced another problem of shortage of management experts. To combat this obstacle, Shih recruited new managers who were perceived as the Paratroopers or the intruders by the existing employees. Decline in the market for mini-computers and subsequent launch of a new product – “Concer” to fight with the falling sales could only add to the overall losses. Reduction in prices by the competitors resulted in reduced margin for Acer and the company slowly found it drifting away from the commoner’s culture. The appointment of Leonard Liu as the CEO and Chairman of AAC led to more problems for the company. The acquiring of Altos brand caused more financial problems for Acer. The employees of the company projected resentment to Leonard’s tendency to spend lavishly that curbed the company’s initial
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