Management essentials and Leadership art
Management essentials and Leadership art Terry Gou
Group members:
Borislav BlagoevDarpan Agarwal
Felix CondeMartina PirisiLiudmila Pape
Sreyly PichVeronika Ivanikhina
Antai College of Economics and Management,Fall 2015
Terry Gou
#34 Richest in Tech (2015)#4 Taiwan`s 50 Richest (2015)#240 Billionaires (2015)#2 in Taiwan#71 Powerful People (2014)
Management essentials and Leadership art Terry Gou
Biography “Where do I belong?”
• Grew up in Shanxi• Built school, a pig farm and a Foxconn factory in a nearby town that employs 20,000 people
Management essentials and Leadership art Terry Gou
“What are my values?”Terminal values: sense of belonging, family security, sense of accomplishmentInstrumental values: ambitious, broad-minded, courageous
“What are my strengths?”• Self-made man• Graduated from China Marine Junior College• Served in the military• Worked in a rubber factory, at a grinding wheel and medicine plane until the age of 24
“How do I work? ”1974- start up the company with only $7500 investments and ten workers2015-one of the most richest businessman in the world
“What can I contribute?”• Founded an educational charity organization • Gives away one third of his wealth to charity
Management essentials and Leadership art Terry Gou
• From manual production to machinery processing and finally to eCMMS
• Foxconn’s Adaptability to Client Business Process• Vertical integration of production for cost leadership• Enterprise resource planning to guarantee quality and punctual
delivery
Strategy
• Autocracy for the benefit of the company• Control system based on military management• Adjusted production to fall in line with less educated workers
Action
• World’s largest Electronics Contractor Manufacturer• Third largest IT company by revenue• Foxconn is the largest exporter of China• Current revenue of Foxconn is $139 billion• Total number of employees working is 1.2 million• Factories in over 20 countries
Result
MotivationDefine responsibilities, fair rewards,
disciplinary action:
Living conditions Management by Objective
Stock options and ‘138 home plan’ Bonuses from dividends from the
company for 30 percent year-on-year increases
Management essentials and Leadership art Terry Gou
“The group’s benefit is more important than
your personal benefit”
Terry Gou’s Emotional Intelligence skills
Social skills• Doesn’t like to speak with press• Doesn’t like long discussions with managers, often makes
decisions by himself
Self- awareness• Knows his goals and values, strengths, weaknesses
Self- regulation• On public doesn’t show his
emotionsMotivation• Can motivate people• People become his followers• Lead by his example• Fostered empire centered around his personality
Empathy• Doesn’t communicate a lot with his employees• Hard work conditions in factories
High
Low
Management essentials and Leadership art Terry Gou
The Forbidden City of Terry Gou
• Overtimes• Unpaid work assembly• Frequent change of work shifts• Production bonus and competition• Depressing environment• Punishment• Harassment from security guards
SuicidesManagement essentials and Leadership art
Terry Gou
“I should be honest with you. The first one, second one, and third one, I did not see this as a serious problem. We had around 800,000 employees.
At the moment, I’m feeling guilty. But at that moment, I didn’t think I
should be taking full responsibility.”
”We are not just a factory, we take social responsibility. Now, I think we need to change the way things are.
Businesses should be focused on business and social responsibility
should be government responsibility.”
Management essentials and Leadership art Terry Gou
Managerial decisions of Terry GouResultDecisionProblem
Foxcon’s revenue was dragged down by 19.2 % because of declining iPhone and iPad orders
- Mr. Gou personally spent about $840 million on a stake in Sharp's LCD panel factory in Japan Foxconn released a 60-inch with 90 percent of the components made in-house - Recruited 2 companies, RadioShack in China and Vizio in the United States, to sell the television under their brands
- Found new clients- Built the system that allows them not to rely 100% on their customers
BYD began copying business model and poached 50 Foxconn employees, who in their turn stole documents containing trade secrets
Claimed to the court of Justice using intellectual property rights
Built entry barriers
Apple decided to segregate its suppliers and concluded contract with a main Foxconn competitor Pegatron
Gou reduced his profit of margin and provided better services to its employees: increase salary, reduce working hour, provide better working conditions
- Maintained the operational cost- Kept employees from switching to Pegatron
Management essentials and Leadership art Terry Gou
Management essentials and Leadership art Terry Gou
LeaderTerry Gou
Followers
1.2 million employees3000 applicants/week
Situation Apple BYD Pegatron Scandals
Three factors of Leadership
Curious Facts
Management essentials and Leadership art Terry Gou
His current wife didn’t know how big of a deal he was when he first
hired her to teach him to dance, but she did know that he “danced
very well for an amateur.”
Terry Gou the Mayor of Foxconn
Management essentials and Leadership art Terry Gou
• TSE Health Foundation• Development Fund for Animal Welfare Promotion
• Donation for Cancer CenterManagement essentials and Leadership art
Terry Gou
Management essentials and Leadership art Terry Gou
Terry Gou Leadership Profile
Coercive
Authoritative
Coaching
Affiliative
Pacesetting
Democratic
“The important thing in any organization is leadership not management. A leader must have the
decisive courage to be a dictator for the common good”
GENGHIS KHAN:common traits
He encouraged his supporters to be frank and speak without ceremony.
He share his employees’ efforts working close to them and coordinating all their operations.
QIANLONG EMPEROR: differences
Is looking forward to find a successor to run his empire.
“Now I feel to sit back and give young people more responsibilities.”
Management essentials and Leadership art Terry Gou
Personal traits
Company strategy
Organizational culture
Emotional Intelligence
Competitive market
Social responsibilit
y
Leadership style
Conclusion
CharityCreating Jobs
Courage to lead, knowledge expertise,
traditionalism, ambitious, goal-oriented
Adaptability, Cost leadership
Autocracy for the benefit of the
company, Emperor of the Forbidden city
High self-awareness, self-regulation, ability to motivate, low social skills and empathy
Staying on the top
Aligning Motivating Giving direction
Management essentials and Leadership art Terry Gou