Midea’s Re-adoption of Division-Based Organizational Structure
Product Number：
EN_2020ZLGL_9983
Page Views：
316
CaseName：
Midea’s Re-adoption of Division-Based Organizational Structure
Authors：
Wang Fengbin, Zhang Chi, Sun Chunyan, Tao Zhexiong
Author Affiliation：
Renmin University of China
Enterprise/Organization：
Midea Group
Industry：
Manufacturing
Discipline：
Strategy、Organizational Behavior
Scale：
Large
Language：
English
Type of Case：
Descriptive Case
KeyWords：
Divisional Structure, Organizational Design, Structural Evolution
Abstract：
This case work describes and analyzes the reform and evolution of Midea’s organizational structure when confronting changes in external environment and corporate strategies. Centering on the forces driving Midea’s discard and re-adoption of the M-formed organizational structure, the case contrasts different types of organizational structure probably adopted by large companies. The work firstly introduces Midea’s structural reform in 1997, including the establishment, separation, and combination of different divisions, the formation of rules governing centralization and decentralization, and the “internal corporatization” reform within major divisions. The case proceeds to depict Midea’s continuous adjustment on organizational structure in the course of diversification, including implementation of management stock ownership, construction of second-tiered grouping, and transformation of Midea into a holding company. Then, the case describes in details the reasons for and zig process of Midea’s re-adoption of the divisional structure after its leadership transition in 2012, the construction, refinement, and evolution of the new “9+2+1” organizational structure, the making of new strategic plans, and the establishment of four new cross-divisional platforms. This work hopes to provoke thoughts on how to design and establish a suitable organizational structure and how to build support systems in the face of new situations, especially for those corporate groups adopting a decentralized organizational structure and operating with multiple businesses in different regions and countries.
Intended Audience：
Undergraduate,EE,MBA,EMBA
Data Source：
Secondary
Publication Date：
2016
Revision Date：
2020
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