CASE: ACER, INC.: TAIWAN ‘S RAMPAGING DRAGON
In comparison to Stan Shih, Leonard Liu was a Taiwan-born, US based senior IBM executive “with a reputation for a no-nonsense professional management style”. On the other hand, Stan Shih had a more frugal approach to management and delegated a decision making responsibilities to his employees to harness “the natural entrepreneurial spirit of the Taiwanese. Shih believed in a “hands off” style of management, bias for delegation and an informal manner. His style of management put all the trust of the firm in the hand of the employees hoping the employees will always do the right thing in the interest of the firm. This style of management worked because it created a very close family among…show more content… Liu reduced management layers, established standards for intra-company communication and introduced productivity and performance. Liu introduced the RBU (Regional Business Unit) & SBU (Strategic Business Unit) organization. Liu believed in laying off employees based on their performances to satisfy the shareholder. Liu had an iron fisted management style, and no “BS” approach to management compared to Shih. Liu management style made everyone accountable for their actions.
A factor that contributed to Acer’s decline was the change of name from Multitech due to a US company registered under the same name claiming they were infringing their trademark. After ten years of building a corporate reputation and brand identity. Shih had to start all over again. Shih decision to disregard the advice to focus on profitable OEM business ventures rather than pursue the humongous cost of recreating a new global brand lead to a huge loss following the 1988 IPO, Acer’s pockets were too shallow to finance such a venture. Shih ideal belief that it’s “better to lose control” but make money and that “real control came through ensuring common interest” lead to Acer’s decline, sometime you have to put aside common interest to stay afloat. Shih program that allowed any employee with one year of company service to purchase shares diluted his original 50% stake to about 35%; too much common interest was involved. Acer wasn’t