Analysis of the Success of Huawei: Coincidence or Consequence?
Analysis of the Success of Huawei: Coincidence or Consequence?
Abstract
This paper analyzes the success of Huawei Technologies Co., Ltd., one of the largest telecommunications equipment manufacturers in China. This paper applies two prevalent organizational theories: the ecological and evolutionary approach and the resource-based view, to interpret the causes of the success of Huawei. Based on the strength and weakness analysis of each theory in the explanation of the same phenomenon, the resource-based view is recommended as a more effective theory to examine the organization structure and business strategies.
Introduction
Established in 1998, Huawei Technologies Co., Ltd. has become one of the largest telecommunications equipment manufacturers in China. As a private company devoted to the R&D, production, marketing and support of communications equipment and solutions for telecom carriers, Huawei achieved great success in just
16 years. From the financial highlights of Huawei below, we can see its growth in the recent years:
Chart I Financial Highlights of Huawei
(Sales based on annual signed contract value)
Then, the research question would be: What is the cause of such great success of Huawei in such a short period of time? Here I would apply two different organizations theories: the ecological and evolutionary approach and the resource based view, to analyze this phenomenon in quite different ways to compare the plausibility of these two theories.
Analysis Based on the Ecological and Evolutionary Approach
The ecological and evolutionary approach is focused on the effects of environment on organizational structure. Based on this theory, the evolutionary process of the organization will experience the following four steps: 1) Variation, which means changes from current routines and competencies; 2) Selection, which means differential elimination of certain types of variations. There are two types of selection. One is
Abstract
This paper analyzes the success of Huawei Technologies Co., Ltd., one of the largest telecommunications equipment manufacturers in China. This paper applies two prevalent organizational theories: the ecological and evolutionary approach and the resource-based view, to interpret the causes of the success of Huawei. Based on the strength and weakness analysis of each theory in the explanation of the same phenomenon, the resource-based view is recommended as a more effective theory to examine the organization structure and business strategies.
Introduction
Established in 1998, Huawei Technologies Co., Ltd. has become one of the largest telecommunications equipment manufacturers in China. As a private company devoted to the R&D, production, marketing and support of communications equipment and solutions for telecom carriers, Huawei achieved great success in just
16 years. From the financial highlights of Huawei below, we can see its growth in the recent years:
Chart I Financial Highlights of Huawei
(Sales based on annual signed contract value)
Then, the research question would be: What is the cause of such great success of Huawei in such a short period of time? Here I would apply two different organizations theories: the ecological and evolutionary approach and the resource based view, to analyze this phenomenon in quite different ways to compare the plausibility of these two theories.
Analysis Based on the Ecological and Evolutionary Approach
The ecological and evolutionary approach is focused on the effects of environment on organizational structure. Based on this theory, the evolutionary process of the organization will experience the following four steps: 1) Variation, which means changes from current routines and competencies; 2) Selection, which means differential elimination of certain types of variations. There are two types of selection. One is
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