Casebook of Chinese Business Management (Management for Professionals) 9811680736, 9789811680731

Table of contents :
Preface
Acknowledgment
Contents
Plan: Strategic Management
1 The Talent Management Plan of Siensol Environment Protection Industry Group
1 Introduction
2 From “Organization Inventory” to “Talent Inventory”; Clarifying the Thinking on Strategic Talent
3 Building a Talent Pool and Drawing a “Talent Map”
4 Attaching Importance to Cultivation and Building a “Power Engine”
5 Breaking the Rules, Introducing Competitions, and, Finally, Creating the Catfish Effect
2 Can Qianzhiguan Tea Turn the Corner in the Context of the “Internet Plus” Agriculture?
1 Introduction
2 Local Industry Efforts: Arduous and Lengthy
2.1 The Grim Industrial Situation
2.2 Enterprises Beset by Difficulties
3 First Light of Morning
3.1 Historical Origin
3.2 Grasping the Opportunity
4 Slowly But Surely
4.1 Drawing a Blueprint
4.2 Displaying the Talent
4.3 Direction Selection
5 One Small Shift Can Yield Significant Results
5.1 Green Production and Building a Smart Tea Plantation
5.2 Concentrate on Building a Technology Enterprise
5.3 Focus on the Critical Point
6 The Road to the Future
3 Brand Marketing of Geographical Indication Products in Xinjiang Tianxiaxiang
1 Introduction
2 GI Product Marketing Issues
3 Explaining the Path to Success for Tianxiaxiang
3.1 The Tianxiaxiang Enterprise Name
3.2 The Shape of the GI Products Brand Via Packaging
3.3 Enriching the GI Product Brand Via Culture
3.4 Creating the GI Product Brand Via Advertising
3.5 Integrating Brand Marketing in Online and Offline Channels
3.6 Spreading Xinjiang GI Brand Product Information Via Internet Technology
3.7 Selling GI Brand Products Via the Sharing Economy
3.8 Developing Experiential GI Brand Marketing
4 Future Developments
5 Suggestions for “Xinjiang Melon and Fruit, Famous All Over the World”
4 TikTok: How a Chinese Video Clip App Became a Popular and Successful Global Brand
1 Introduction
2 The Rise of the Company
2.1 Becoming a Top Global Brand
2.2 Position in the Home Market: TikTok (Douyin) in China
2.3 Position in the Global Market
2.4 The Identity of TikTok’s Brand
3 Marketing Promotion
3.1 Star Promotion
3.2 Advertising Marketing Investment
3.3 Various Online and Offline Activities
3.4 Taking the International Route
3.5 Top Brands Marketing on TikTok
3.6 Celebrity Endorsements
4 Artificial Intelligence Technology
4.1 Algorithms and Technology Recommendations
4.2 The First “Dance Dancer” Function
5 Meeting the Needs of Users
5.1 Eliminating Information Uncertainty
5.2 Promotion of Localized Content
6 Future Developments
6.1 Current and Future Challenges to Be Overcome at Home and Abroad
6.2 Current Competitors and in the Future
7 Conclusion
Organization: Entrepreneurship
5 Chasing the Dream: Canwangda’s Journey of Cross-Border E-Commerce
1 Introduction
2 Refining Ideas, Targeting Cross-Border E-Commerce
2.1 The Founding Team
2.2 What Products to Sell
2.3 Increase Customer Stickiness
3 Reducing Costs and Improving Quality
3.1 Reducing Logistics Costs
3.2 Broadening Sales Channels
4 Conclusion
6 Can Small Earthworms Bring Big Entrepreneurial Opportunities?
1 Introduction
2 Company Profile
3 The State of Agricultural
4 Entrepreneurial Inspiration
5 Product Test
6 Building an Ecological Chain of Large Agricultural Industries
7 Big Data Entrepreneurship in Healthcare
1 Introduction
2 What Kind of Health Experience Do Patients Need/Get?
3 Entrepreneurial Inspiration
4 Entrepreneurial Plan
5 The First Stage of Implementation
6 The Second Stage of Implementation
7 Conclusion
Leadership: Humanistic Management
8 A Great Florist: The Initial Heart of the Founder of the Dongxin International Flower Company
1 Introduction
2 Developing a Love for Flowers
3 Dropping the “Iron Rice Bowl”
4 Explorations and Innovations
5 Technology Promotes Flower Development
6 Original Mission Creates a Future
9 Shengdu Home Furnishings Co., Ltd.: A Hero Walks Against the Wind
1 Introduction
2 Supporting Wuhan
3 Promoting Reform
4 Sales Model Reform: Transforming from Offline to Online Sales
5 Office Model Transformation: From Offline Office to Networked Office Model
6 Conclusion
10 Person and Job Matching in the Newly Established Department of a New Energy Power Company
1 Introduction
2 Data Management Reform in the FSSC of NP Company
2.1 Difficulties and Exploration of NP Company Data Management
2.2 NP Company Profile and Functions of the FSSC
3 Position Setting in the FSSC
3.1 Organizational Management of the Company
3.2 The Central Organizational Structure of the FSSC
4 Human Resource Management Challenges Faced by the FSSC
4.1 The External Labor Market is a Buyer's Market
4.2 Position Value of FSSC Staff
4.3 Performance Appraisal of the FSSC
4.4 Team Cohesion in the Shared Financial Center
Control: Information Management
11 Information Management of Adverse Events Across Multi-Disciplinary Hospital Teams
1 Introduction
2 Decision to Design and Develop an Independent Adverse Events System
3 Using Artificial Intelligence (AI) Technology to Improve System Functions
12 “Smart Brain” Installation for a Follow-Up System for Patients
1 Introduction
2 Summary of Opinions
3 The Spark that Solves the Problem
4 Further Development
13 A Smart Internet Hospital—The Building of the AHJU Internet Hospital
1 Introduction
2 Background
3 Project Requirements
3.1 Convenient Medical Treatment
3.2 Grading Diagnosis and Treatment
3.3 Health Management
3.4 Quality Control Management
3.5 Technical Objectives
4 Overall Project Design
4.1 Overall System Design
4.2 Subsystem Module Division
5 Detailed Design of the Subsystem
5.1 Patient Treatment Service Subsystem
5.2 Chronic Disease Management Subsystem
5.3 Electronic Prescription and Data Security Subsystem
5.4 Hierarchical Diagnosis and Treatment Management Subsystem
5.5 Medical Emergency Treatment Subsystem
5.6 Medical Quality Control Comprehensive Management Subsystem
6 Project Implementation
7 Project Staging Plan
Innovation: Organizational Innovation Management
14 Moving Towards Modified Digital Economy: The “Internet Plus” Model Encourages the Foundation and Innovation of “Lotus Island”
1 Introduction
2 Establishing All-Life Healthy Tech Co., Ltd.
3 A Transformed Manufacturer: A Box of Pads Opens at the Door of a Beauty Salon
4 Seeking a New “Online to Offline” Model and Establishing Beijing Lotus Island Technology
15 JD Strategic Cross-Border Expansion–Offering Retail as Strategy Solutions Abroad
1 Introduction
2 Company Profile
3 The Rise of the Company
4 Next Steps
4.1 Product Diversification
4.2 New Technology
4.3 Cloud-Based Expansion
16 Operations of the TV Series Hua Qian Gu
1 Introduction
2 Before Production—“Make the Cocoon into a Butterfly”
2.1 Original Novels Are Popular at Home and Abroad
2.2 Appeal to Film Production
3 In Production—Audience “full Participation in National Production”
3.1 Network Builds Momentum
3.2 Benefit by Mutual Discussion
4 After Production—Parallel Management
4.1 “TV + Microblog” Network Linkage
4.2 Series Game Development
5 The Way to Success
17 Xiaomi Mobile Phone's “Social Manufacturing” Journey
1 Introduction
2 Focus on User Experience and Complete Crowdsourcing Mode
2.1 Crowdsourcing Model Centered on the User Experience
2.2 Crowdsourcing Model Improves Products
3 Methods for Parallel Management
3.1 Proactively Contact Users
3.2 Establish a “Xiaomi Fan” Circle
4 Consumers Transform into an “R&D Team”
5 The Road to Success
Teaching Notes for Management Case Samples
18 Teaching Note for the Smart Internet Hospital Case: The Building Process of the AHJU Internet Hospital
1 Teaching Objectives
2 Discussion Points
3 Analysis Ideas
4 Theoretical Basis and Analysis
4.1 Theoretical Basis
4.2 Problem Analysis
5 Background Information
6 Teaching Plan
6.1 Pre-Class Preparation
6.2 Class Plan
19 Teaching Note for the Case of Person and Job Matching in the Newly Established Department of a New Energy Power Company
1 Teaching Objectives
2 Discussion Points
3 Analysis Ideas
4 Class Discussion
4.1 Analyze the Responsibilities and Functions of NP Company's FSSC According to the Case; Write the Job Descriptions and Qualifications as an Operation Supervisor
4.2 Try to Evaluate the Value of the Position of the Information Operation Supervisor at the FSSC of NP Company
4.3 If You Are the HR Director of the Finance Sharing Center of NP Company, What Measures Will You Take to Avoid Informatization Staff Turnover?
5 Teaching Plan

Citation preview

Management for Professionals

Mingyue Fan · Limin Wang · Dragana Ostic Editors

Casebook of Chinese Business Management

Management for Professionals

More information about this series at https://link.springer.com/bookseries/10101

Mingyue Fan · Limin Wang · Dragana Ostic Editors

Casebook of Chinese Business Management

Editors Mingyue Fan School of Management Jiangsu University Zhenjiang, China

Limin Wang School of Management Jiangsu University Zhenjiang, China

Dragana Ostic School of Finance and Economics Jiangsu University Zhenjiang, China

ISSN 2192-8096 ISSN 2192-810X (electronic) Management for Professionals ISBN 978-981-16-8073-1 ISBN 978-981-16-8074-8 (eBook) https://doi.org/10.1007/978-981-16-8074-8 Jointly published with Science Press The print edition is not for sale in China (Mainland). Customers from China (Mainland) please order the print book from: Science Press. © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publishers, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publishers nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publishers remain neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Preface

In the face of various uncertainties, Chinese companies have risen to prominence and constantly summed up enterprise management concepts and practical experience suitable for their development to reshape their competitive advantages and enhance their market value. Meanwhile, Chinese companies and the stories of their management processes are getting more and more attention. There is also a growing need for them to be integrated into the business or management school education system in and out of China. “Solving China’s problems, guiding China’s practice, and forming China’s solutions” has become an important goal of the Ministry of Education of China to promote the reform of talent training mechanism of new liberal arts. Therefore, this textbook was written to allow readers to access to high-quality learning materials by providing them with a real business situation and maintaining the highest standards of academic rigor at little to no cost. Besides, learning management is no longer satisfied with only selecting typical cases in the western counties but should consider China’s cases to help readers understand management principles under China’s context. This way will be more conducive to cultivate international talents with different backgrounds. Based on the investigation, this book covers the significant theoretical aspects of management principles such as planning, organizing, leading, controlling, and innovation. The 17 selected cases from manufacturing, retailing, technology/big data service, agriculture, and other industries cover strategic management, entrepreneurial management, humanistic management, information management, and organizational innovation management. We hope that readers can get some valuable practical experience and enlightenment from the practices in these fields. The book also includes two case study guides, which guide readers to form a case study’s thinking. It also encourages readers to broaden their learning ideas on management. The book is organized by the MBA Case Study Center of the School of Management in Jiangsu University, China and written by many professors with case teaching experiences interested in developing Chinese cases. They have accumulated excellent Chinese enterprise cases that adequately reflect the “Story of China” for teaching. Meanwhile, they are skillful in developing new cases for Chinese v

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Preface

enterprises based on management principles. They won many awards for the development of enterprise cases. The content and length of each case will be suitable for readers to read and analyze within a short time. It is also a support for reforming the teaching activity from lectures to case studies smoothly in order to enhance the quality of higher educational for either undergraduates or postgraduates. Zhenjiang, China

Dr. Mingyue Fan Ms. Limin Wang Dr. Dragana Ostic

Acknowledgment

We are grateful for the financial and valuable support from the Third Phase of Construction Project of Superior Disciplines in Universities of Jiangsu Province, China (Management Science and Engineering) and Publication Funding of English Teaching Materials for Overseas Students, Jiangsu University, China. We especially thank Dean Prof. Jianguo Du from School of Management, Jiangsu University, Dean Prof. Jing Gao from the Overseas Education College of Jiangsu University, and Vice Dean Prof. Di He from the School of Management, Jiangsu University for the encouragement and guidance. We also thank the graduate student Yue Tang, Keyu Han, Clarissa Oteng Darko, Motswedi Epadile, Marianne Adou, and Juliet Wanza Ndavi for their valuable contribution.

vii

Contents

Plan: Strategic Management The Talent Management Plan of Siensol Environment Protection Industry Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hui Zhou

3

Can Qianzhiguan Tea Turn the Corner in the Context of the “Internet Plus” Agriculture? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mingyue Fan and Limin Wang

9

Brand Marketing of Geographical Indication Products in Xinjiang Tianxiaxiang . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mingxing Li, Mengjuan Zhang, and Oswin Aganda Anaba

25

TikTok: How a Chinese Video Clip App Became a Popular and Successful Global Brand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mingyue Fan and Morrant Hemans

33

Organization: Entrepreneurship Chasing the Dream: Canwangda’s Journey of Cross-Border E-Commerce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Xin Li

49

Can Small Earthworms Bring Big Entrepreneurial Opportunities? . . . . . Daohai Zhang

55

Big Data Entrepreneurship in Healthcare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Daohai Zhang and Mingyue Fan

63

Leadership: Humanistic Management A Great Florist: The Initial Heart of the Founder of the Dongxin International Flower Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mingyue Fan and Limin Wang

75

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Contents

Shengdu Home Furnishings Co., Ltd.: A Hero Walks Against the Wind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hua Cheng

83

Person and Job Matching in the Newly Established Department of a New Energy Power Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jingzhao Yang and Jing Wu

91

Control: Information Management Information Management of Adverse Events Across Multi-Disciplinary Hospital Teams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 Jia Ke “Smart Brain” Installation for a Follow-Up System for Patients . . . . . . . . 111 Jia Ke A Smart Internet Hospital—The Building of the AHJU Internet Hospital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 Jia Ke Innovation: Organizational Innovation Management Moving Towards Modified Digital Economy: The “Internet Plus” Model Encourages the Foundation and Innovation of “Lotus Island” . . . 133 Guilan Hu JD Strategic Cross-Border Expansion–Offering Retail as Strategy Solutions Abroad . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Dragana Ostic and Bojan Obrenovic Operations of the TV Series Hua Qian Gu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 Jingzhao Yang Xiaomi Mobile Phone’s “Social Manufacturing” Journey . . . . . . . . . . . . . . . 157 Jingzhao Yang Teaching Notes for Management Case Samples Teaching Note for the Smart Internet Hospital Case: The Building Process of the AHJU Internet Hospital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 Jia Ke Teaching Note for the Case of Person and Job Matching in the Newly Established Department of a New Energy Power Company . . . . . . . . . . . . . 183 Jingzhao Yang and Jing Wu

Plan: Strategic Management

The strategy of achieving a sustainable organization through talent management plan in Siensol Group Establishment of talent inventory to the rapid development of the company Implementation of how to build up a dynamic talent management system

The strategy of formulating the entrepreneurial orientation of Qianzhiguan Strategy formulation and resource integration of a start-up Upgrading the tea industry via “Internet +” agriculture

Brand marketing strategies of products from Xinjiang Introduction of geographical indication products

Formulation and implementation of a series of successful brand marketing strategies for Xinjiang geographical indication products The marketing strategies of strengthening TikTok's popularity The various ways of marketing promotion in digital age The combination of customers’ needs and artificial intelligence technology

The Talent Management Plan of Siensol Environment Protection Industry Group Hui Zhou

1

Introduction

Changzhou Hi-Tech Group Co., Ltd. is the first state-owned leading enterprise conglomerate with 10 billion in capital in Changzhou City. The group was established in August 1992 to undertake the important task of serving economic growth, urbanization, environmental governance, and the social development of 508.94 square kilometers of Changzhou high-tech zone. Since 2016, the group’s annual operating revenue has exceeded RMB 10 billion. Its businesses cover environmental protection, quasi-equity financing, urban construction, and social undertakings, among other fields. The Siensol Environment Protection Industry Group Co., Ltd. (Siensol Group) is a wholly-owned subsidiary of the Changzhou Hi-tech Group Co., Ltd. It established in 2017 with a registered capital of RMB 1 billion. At present, the company has a “2 + 3” strategic industrial approach; namely, an investment strategy in three core business industries, organic waste recycling (biological natural gas), industrial wastewater treatment and recycling, and industrial sludge recycling; at the same time, it provides dual scientific and technological services, such as design research and development, intelligent environments, and commission operations for enterprises and society. The company’s mission is to “create a beautiful environment and promote quality of life”. It adheres to the corporate culture of “responsibility, integrity, pragmatism, and advancement”. Its vision is to become a model and benchmark for environmental protection enterprises in the new era. The company mission includes becoming an industry-leading and trustworthy professional environmental protection service provider.

H. Zhou (B) Jiangsu University, Zhenjiang, China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Fan et al. (eds.), Casebook of Chinese Business Management, Management for Professionals, https://doi.org/10.1007/978-981-16-8074-8_1

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H. Zhou

Since its establishment, Siensol group has experienced rapid growth. The projects affiliated with Siensol Group rose from five local projects in Changzhou in 2017 to nine projects in 2020, covering seven regions. The number of employees has grown as well, from less than 100 at the end of 2017 to more than 500 today. Due to this rapid development, demand has increased significantly for a wide-variety of talent for various projects and departments.

2

From “Organization Inventory” to “Talent Inventory”; Clarifying the Thinking on Strategic Talent

In the context of its rapid development, a severe shortage of talent has become a stumbling block to the company’s growth. For every project the company launches, it needs to add 50 people and more than 20 jobs. Management project staff accounts for approximately 20 people. Given the shortage of talent, especially management talent, the company’s human resources (HR) department adopted a quick balance hiring approach. This approach entails the relaxation of requirements for on-boarding talent and strict adherence to the probationary period to meet the demands of various projects and job requirements for human resources. However, the lack of systematic human resource management norms and policies has generated some immediate problems for the company. For example, strict probationary assessments cannot be adhered to as the company is developing so rapidly. However, there is more room for staff development, and opportunities for grassroots development of middle management and promotions to senior management have increased. Yet, the existing human resources system is unable to help managers evaluate and filter qualified candidates. Specifically, the company lacks a talent system that can address both the technical talent and managerial talent that are necessary for the company. Talent training and career planning are only superficially addressed, and the lack of overall design often leads to the “Peter Effect” when implemented. Placing inappropriate talent into related jobs is not conducive to employee growth. Facing restrictions on the development of the enterprise’s strategy due to limited human resources, the General Manager of Siensol Group, Jianmin Hu, put forward the idea of a balanced development of organizational talent and the “opening-up of the market”. At the end of 2018, the company began to construct a “talent management system”, as the starting point for final talent determination based on an organization inventory and a talent inventory plan. The objective of the organization and talent review (OTR) was to evaluate organizational changes and the talent supply from a strategic management perspective. With the help of the OTR, managers would not only be able to clearly understand the actual situation of talent–job matching but also uncover the gaps between the supply and demand for talent in the organization. At the same time, the OTR could help the enterprise establish and improve its talent echelon management system, which can support the company’s strategic management development. The competency model, consisting of four large competency categories and nine small ones

The Talent Management Plan of Siensol Environment … Table 1 The competency model. Source: Interview with company

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No.

Large competency categories

Small competency categories

1

Constructing the overall thinking pattern

Thinking and analysis Decision making Commercial sensitivity Strategic thinking

2

Ensuring the results

Execution

3

Promoting interpersonal collaboration

Cooperation

Leading a team to success

Talent motivation

4

Influencing others Team building

(see Table 1), was established by conducting one-on-one interviews with top executives. The model was the starting point for the company’s personnel management system. Based on this competency model, the HR department of Siensol Group built a series of talent inventories under the leadership of Minister Xiaohong Geng as follows. (1) Talent assessment. A nine-dimensional evaluation system was constructed according to the management competency model to evaluate middle and senior managers. (2) Training on report interpretation. Training was conducted for all participants to help them understand the evaluation report, how to objectively view the evaluation results, how to evaluate their strengths and weaknesses, and how to design self-development plans. (3) Five categories for group report analysis. According to the job and business, the personnel participating in the evaluation were divided into five categories for group report analysis. Managers’ common problems in the same category were analyzed, providing a better training and training direction for managers to improve their abilities.

3

Building a Talent Pool and Drawing a “Talent Map”

Based on the company competency model for management and employee consensus on the evaluation standard for management talent, Jianmin Hu proposed broadening recruitment channels and establishing multi-level talent introduction channels. The HR department’s rapid response quickly went beyond the single channel that had only relied on senior executives’ interpersonal networks to introduce talent in the past and established a standardized and three-dimensional

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working process for attracting and retaining talent. Traditional online recruitment now uses an internal reward referral and internal competition system. Additionally, various recruitment methods have been introduced, such as headhunting, talent recruitment services, and dispatching suppliers. The essential requirement of the “systematic construction of talent management” is to build a talent pool and a talent reserve pool. For the reserve pool, the Siensol Group must create platforms where employee can advance themselves and grow. According to the strategic direction of the company’s future long-term development and the demands for the development of critical areas and projects, the HR department constructed the D.M.P. (decision-making, management and professional) career growth paths for management talent. D-type talent (decision-making): cultivate managers with strategic vision, comprehensive abilities, excellent management qualities, and outstanding performance orientation. This career path, for example, is for the general manager of each subsidiary, the chief of the engineering department, or the main person in charge of headquarter functional departments or centers. M-type talent (management): cultivate and become managers with global awareness, excellent business management abilities, efficient cooperation, and flawless execution. This training direction is, for example, for the deputy general manager, director, deputy chief engineer, or the functional department backbone. P-type talent (professional): develop essential management ability, strong professional capacity, with particular management qualities, namely, the deployment of determined grassroots managers. This training direction, for example, is for subsidiary department managers, engineering department lead managers, and other management positions. The company divided all positions into five areas (management, functional, technology, business, and production). Each area, according to different job requirements, includes four grades and 12 ranks. A qualification panel was established, where selected cross-corporate professionals are responsible for compiling grade qualifications.

4

Attaching Importance to Cultivation and Building a “Power Engine”

A talent map is equivalent to building a roadway. How can we move faster along the roadway? How can we promote and guide everyone to learn, think, and grow? Government Minister Xiaohong Geng submitted a plan for Siensol Group in which the company’s leaders could be highly recognized. Jianmin Hu discussed the plan with other senior leaders during work meetings and asked the HR department to enhance and implement it as soon as possible. The main contents of this “power engine” plan were as follows.

The Talent Management Plan of Siensol Environment …

7

(1) Dual mentoring and competency development programs. During the training period of the D.M.P. and other management talent, the members of the business decision-making committee act as team mentors responsible for guiding team building, comprehensive ability improvement planning, special ability evaluations of the reserve management talent team, and reviewing phased ability development results. Each department assists reserve management personnel in selecting the mentors according to the need for development at different stages. Reserve management personnel and their mentors should jointly formulate an individual-based development plan. The development mentor should guide and evaluate the reserve management personnel in daily work. (2) Training and cultivation of reserve management talent. The company, following the established training objectives for various types of reserve management personnel and in light of the actual situation, promotes the comprehensive abilities of various types of personnel through various training, mentor guidance, work experience, special work arrangements, work discussions and exchanges, study rotation, part-time work, participation in new projects, among other methods, to enhance the overall abilities of the individuals. (3) Incentive and selection of reserve management talent. According to the company’s development needs, employees in the reserve management talent pool will be recommended to participate in industry exchange, technology, seminars, various types of talent plan declarations, and higher-level talent training programs. Employees ready for promotion should be identified as outstanding candidates in the talent pool.

5

Breaking the Rules, Introducing Competitions, and, Finally, Creating the Catfish Effect

Fish will have vitality in flowing water. The talent pool organization must also be a living pool to improve human potential. The essence of human resource management is to build a dynamic talent management system. To motivate talent, the employment philosophy of “Do not set limitations on talent but invite talent from all areas” should be applied. This can change an employee mindset from “ask me to do this” to “let me do this” and combine static talent reserve records and evaluation results with dynamic work enthusiasm and work ideas, enabling more efficient selection and recruitment of talent. After extensive investigation and research, the HR department established an internal competitive recruitment mechanism and formulated a detailed internal competitive recruitment plan. It set up a special competitive recruitment assessment panel, job-release procedures, self-declarations, qualification examinations,

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job performance evaluations, ability evaluations, competitive speeches, interviews, and analysis. In addition, when the positions were essential, the process of recruiting included a democratic assessment. After the introduction of the system, the company launched several internal competitions for department managers. The feedback from these projects was good. Through these competitions, the HR department can build a more comprehensive understanding of employees’ actual situations, which will be more conducive to placing appropriate people in appropriate jobs. According to the requirements for the position of the Vice Minister of Investment and Development of Siensol Group, the HR department searched among the internal staff who applied for this position and then communicated with them. Ultimately, the HR department succeeded in selecting four candidates, which included internal staff. Through a sequence of interviews, such as personal interviews, questions and answers, the department was able to gain a comprehensive understanding of each candidate’s strengths and weaknesses. Ultimately, the department successfully sent out two candidates of vice minister. The company also offered help to those not selected for future career planning according to their characteristics and situations. The efficient construction of the company’s talent management system has straightened its talent management and helped improve its development. On July 17, 2020, Wuxi Xuelang Environmental Technology Co., Ltd. announced a share transfer agreement between Jangping Yang (a company shareholder and controlling owner), Huifen Xu, Jianlin Yang, and the Siensol Group. After completing the share transfer, became the controlling shareholder of the company; the actual controller of Siensol Group would be the Management Committee of Changzhou Hi-tech Zone (the People’s Government of Xinbei District of Changzhou). However, the title which Jianmin Hu would need to add to his business card will become a more significant burden and responsibility on his shoulder. In the future, he needs to think about how the human resource management system of the enterprise could be integrated further so that its resource and management advantages could be more effectively coordinated and enacted. It may become a key path to lead Siensol Group to develop better.

Can Qianzhiguan Tea Turn the Corner in the Context of the “Internet Plus” Agriculture? Mingyue Fan and Limin Wang

1

Introduction

In early September 2018, in Yunwu Town, Guiding County, Qiannan Prefecture, the best Duyun Maojian which is a type of green tea was produced. On the Qianzhiguan industrial chain’s base construction site, one kilometer north of the town, Fan Deng, Vice President of Qianzhiguan, stood at three pine trees, looking at the tea plantation under construction. “Ms. Deng, the project is advancing very quickly, and the equipment is being debugged just in time for the trial production of autumn tea. The spring tea will be ready for production in the coming year,” said the person in charge of construction. Fan Deng replied with a smile and said, “Yes, the base has been completed, and we will officially put it into production in the next few months. In the future, the production capacity will increase, which is significant for all Duyun Maojian tea. Although, the tea in Guizhou is excellent, the alleys are too deep and compared with eastern provinces, such as Zhejiang, Fujian, and Anhui, which are developed for the tea industry, large-scale commercialization is far behind. We sell raw tea and the eastern provinces earn the brand premiums. If we want to change this situation, we must seize the opportunity, integrate resources, gather strength, and turn the corner, but it is difficult to do, and we are under great pressure.” Looking out in front of her (Fig. 1). Fan Deng thought about the need for a better road for farming and tea plantations in this land of Guizhou. She considered how to seize this current opportunity, how to formulate a suitable corporate strategy, and ways to find the vital channel for resource integration.

M. Fan (B) · L. Wang Jiangsu University, Zhenjiang, China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Fan et al. (eds.), Casebook of Chinese Business Management, Management for Professionals, https://doi.org/10.1007/978-981-16-8074-8_2

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Fig. 1 A corner of the tea plantation. Source: Provided by company

2

Local Industry Efforts: Arduous and Lengthy

2.1

The Grim Industrial Situation

From the year of 2010, China tea plantations have expanded. Refined tea processing enterprises have increased and the consumption of domestic and foreign tea has continued to grow. The tea industry’s technological competence has also improved year-over-year. Simultaneously, tea product innovation has accelerated, and cross-border products have eliminated stale products and brought fresh ones. The usefulness of information technology in the tea industry, represented by the Internet, is also continually developing. When she first entered the tea industry, Fan Deng researched a wide variety of information and visited representative tea plantations. She became aware of the many problems in today’s tea industry. First, the tea market is heading toward oversupply, and the available tea products are not aligned with market demand. The proportion of famous and high-quality tea is too large, while bulk tea is being ignored. Second, current production methods are unable to support the sustainable development of tea industry, and there is a shortage of labor. The proportion of standardized tea plantations is low, as is the average yield, and the industry’s circulation and sales systems are not perfect. Moreover, the tea industry’s main market competitiveness is not strong, and credit awareness insufficient. Tea

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companies are generally small as well, with little market concentration and few well-known brands. Industry quality and safety incidents also occur occasionally. Finally, young people nowadays consume more coffee than tea. Coffee has become a mainstream drink among the young. Thus, the market of tea consumption still needs to be expanded. The tea industry’s growth in Guizhou lags behind that of the eastern China, although it includes famous tea, like Duyun Maojian. Brand awareness, business philosophy, management methods, and the historical participation of tea enterprises have all lagged compared with the industry efforts in the eastern China. Whether it is the planting production and processing technologies or the circulation sales techniques, each has lagged in comparison with similar activities in eastern China relatively. The Guizhou efforts mainly provide raw tea to the eastern tea industry at the low end of the industrial chain. Fan Deng considered ways to avoid or even solve these problems. Of course, the most important issue was to start at the source, establish a credible and trustworthy corporate brand, integrate resources, become bigger and stronger together, and transform the real green organic tea industry through core competitiveness. These efforts would help the Guizhou tea industry turn the corner.

2.2

Enterprises Beset by Difficulties

It is difficult to establish a corporate brand and produce real “organic tea”. Guizhou Bake Tea Agricultural Development Co., Ltd. (Bake Tea) which Fan Deng and her husband own has faced various difficulties in its operations for several years. As talent is the soul of enterprise development, Fan Deng has always wanted to attract more high-level talent to the business and jointly pursue development. However, Guizhou is remote, and it is challenging to retain talent, as people are more willing to move to developed locales like Beijing, Shanghai, and Guangzhou. Fan Deng was able to attract two outstanding women to work for the company early on; but they left soon after to go to the coastal cities. She felt frustrated. However, fortunately, in the company’s development area, a high-level core team that recognized its business philosophy and its future development had been established. The introduction of the concept of integrity was also difficult. When Fan Deng once explained the concepts of organic planting and sustainability to employees, they did not understand them. One employee asked, “Why does it cost so much money to hire for manual weeding for a problem that can be easily solved with glyphosate? The labor cost is close to RMB 200,000 at one time, but if glyphosate is used, the labor cost is only about RMB 2,000 to 3,000, and then it does not need to be weeded for three or four years.” Another employee said, “The newly planted tea trees have a net investment in the first 3 years. Even if they are weeded once a year, the cost is RMB 600,000 over 3 years, which is expensive! Besides, there are so many enterprises that secretly use glyphosate.” Although Fan Deng always

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adhered to the company’s mission of producing high-quality, high-safety, healthy and organic tea, as a credible enterprise, she did not forget its original goal. One of the most critical factors for a start-up survival is stable cash flow. Due to the adherence to the organic, green, and ecological business philosophy, the company’s operating costs were much higher than the local industry average, and there were funding problems as well. However, Fan Deng was able to raise funds through various channels with people who shared the same philosophy and vision to overcome these difficulties. This enabled the company to survive its first 2 most difficult years.

3

First Light of Morning

3.1

Historical Origin

Despite facing many problems, Fan Deng never thought of giving up. She kept thinking about the opportunities that could break through the difficulties. Duyun Maojian and Kweichow Moutai won gold medals at the World Expo. However, neither the local government nor the research institution had any conclusive evidence to prove the gold medal awards. She realized that this was a breakthrough. If the gold medals could be confirmed, this could be significant in promoting the Duyun Maojian public brand. She immediately started her research and found that the relevant information was still kept at the University of California, Berkeley. With the strong support of the local government, Fan Deng found the “identity certificate” of Duyun Maojian in the university library. This certificate proved that Duyun Maojian won the gold medal at the Panama Universal Exposition in 1915. Figure 2 shows the medal which Duyun Maojian won in 1915. In 2015, the 100th anniversary of the PanamaPacific International Exposition (PPIE) were held at San Francisco, America. Fan Deng participated in memorial activities as a member of the Qiannan Prefecture delegation.

3.2

Grasping the Opportunity

When heaven places great responsibility on someone, at first, it frustrates one’s spirit and will, exhausting one’s muscles and bones, exposing the individual to starvation and poverty. Relying on the original old tea plantation of 500 acres and Fan Deng’s persistence, the company Bake Tea has managed to survive. In 2017, the Qiannan government delegation visited Songyang, Zhejiang. Seeing Songyang’s 120,000 acres tea plantation and standing on the first Chinese green tea line, the delegation was shocked and determined to upgrade the tea industry. The government contacted Fan Deng and proposed to use the stateowned tea company Guiding Qianzhiguan Company as a platform to cooperate with Bake Tea to implement an entire industry chain project for the tea industry.

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Fig. 2 The gold medal which Duyun Maojian won in 1915. Source: Provide by company

When the Guizhou Province’s poverty alleviation project was declared, Fan Deng was determined to seize the opportunity to blaze a career path and capture her dreams. She understood that the Chinese economy today would be critical in transforming the industry’s development mode, optimizing its economic structure, and enhancing growth momentum. Qianzhiguan must seize the opportunity of “the Belt and Road” Initiative to spread the tea culture, and finally, turn it into the part of Chinese culture. Supply side structural reforms must be implemented to promote the quality and efficiency of tea industry development. Most traditional tea farmers or tea enterprises avoid modern ideas. They think that it is enough to manage the land their own. However, such things, as industrial transformation, require a large-scale enterprise to take the lead. Fan Deng was willing and daring to take on the arduous responsibility of being the first person to change the tea industry. The entire industry chain project of Qianzhiguan was funded by the Poverty Alleviation Industry Sub-Fund of the Guizhou Province Poverty Alleviation Investment Fund.

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4

Slowly But Surely

4.1

Drawing a Blueprint

On September 1, 2017, the Qianzhiguan was established. It is a state-owned enterprise established in conjunction with the existing Bake tea based on industrial development needs in Guiding County. Subsequently, Fan Deng faced new challenges: how to formulate an enterprise development strategy, how to implement the strategy, and how to promote the upgrading of the tea industry in the region and in Guizhou effectively. She already had a grand blueprint for the development of the entire industry chain in her mind. While Fan Deng and her colleagues brainstormed the blueprint, She said, “Qianzhiguan has just been established, and no enterprise can eat an entire meal in one mouthful. At present, the most important goal of Qianzhiguan is to stand firm and adhere to a business philosophy of being green, organic, and having ecological integrity. We should develop in accordance with the entire industry chain plan. First, we must build a basis for planting production, standardize and expand planting, and ensure the quality of tea. Second, we should improve the technology for processing and blending, add organic characteristics, make a strong start on the brand, and gradually increase production capacity. Then, we can use the Internet to increase sales and the number of exports. We can put into operation specific scientific research, the mother garden, and tea culture tourism. Finally, we can achieve an entire industry chain in Qianzhiguan.” Everyone nodded. “Yes, this is the only way for the development of an enterprise; first survive and then grow. Take the shortest path to quickly and firmly establish and support the enterprise’s philosophy and brand.” One of the colleagues said. “Yes, but this is just the beginning. What Qianzhiguan wants to do is to take on the historical responsibility of the enterprise and become an enterprise that can affect the whole tea industry,” Fan Deng said. A colleague said, “If we look at the most important things at the moment, we should lay a solid foundation for the future development of Qianzhiguan. It makes sense from production and planting to sales and circulation, especially for tea culture tourism. With the rapid growth of tourism, Qianzhiguan should take advantage of its ideal geographic environment and create a unique tourism intellectual property (IP).” “Yes, what you are talking about is also an essential link in the construction of the whole industry chain. By creating each of these links, not only can we reduce transaction costs and provide multi-modal transactions, but we can also promote value standardization and preliminarily survey the quality of the tea products,” Fan Deng replied. After several hours of discussion, the meeting concluded that Qianzhiguan would establish the enterprise brand and build the entire tea industry chain from concept through implementation. From planting to processing and sales, and then to the experience of tea culture tourism, every link would be vital. All agreed to

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actively build Qianzhiguan, which would depend on the quality of tea and every added value link. After months of investigation, data analysis, and continuous discussion and improvement, Deng’s team finally put forward a specific plan for the development of Qianzhiguan. The plan started with planting resources, followed by production and processing, and tea culture tourism. (1) Begin with the source: genetic breeding. At the beginning of Bake Tea’s establishment, the enterprise passed the triple inspection of the European Union, the United States, and China regarding tea quality and technology. Today, to further the development of the whole industry chain, it is critical to manage the source—the tea tree breeding and the cultivation of high-quality tea seedlings through genetic techniques. Fan Deng’s vision was to establish the tea seedlings cultivar garden, form a technology research and development platform, improve seed resources, and, finally, realize the ideal of changing a nation by beginning with one seed. (2) Expand the tea plantation to keep improving. Expanding tea plantation can ensure adequate supplies when the product is in short supply and thereby reduce product costs. The original tea plantation could no longer satisfy the future development of Qianzhiguan. It was crucial for Qianzhiguan to open new tea plantations and expand its production capacity. Fan Deng planned to purchase tea plantations with excellent environments and suitable terrain, implement uniform production standards, and gradually expand the tea plantations. (3) Establish a new factory and diversify products. A new factory was necessary to introduce more advanced mechanical picking equipment and sorting equipment, reduce manual picking costs, improve tea selection, and enhance processing efficiency. Famous, high-quality tea was still an important part of the enterprise and could not be ignored. However, deepprocessed tea products, such as milk tea, tea biscuits, and even tea perfume, could help Qianzhiguan expand the market and create unique competitive advantages. (4) Online and offline multi-platform sales. From building the first offline store in Guiding County, Fan Deng looked at this as a starting point to open multiple sales channels. Qianzhiguan began to enter into agreements on third-party platforms. The advertisements and stores of the Qianzhiguan Duyun Maojian could be found on Alibaba, Toutiao, and Qiannan government websites. Global consumers could easily order through various e-commerce channels.

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(5) Cultural heritage, creating tea culture tourism. Tea culture has a long history in China, but it is gradually being forgotten. The original processing machinery of Qianzhiguan is old, including red brick factory buildings, which can be utilized to build a tea culture museum for visitors and information exchange. At the same time, an exclusive tourist route for Qiannan was needed, for example, from the Five-hundred-meter Aperture Spherical radio Telescope (FAST) to the tea plantation, from the tea plantation to the museum, and from the museum to the nearby cinema city or other scenic spots. The route would enrich the connotation of tea culture tourism, attracting various groups. Tea culture museums could also display tea utensils, tea-making machinery, and the tea crafts that would explain the fascinating tea culture better and reawaken the reverence and love for Chinese civilization. Today, it is not enough for the tourism industry to support the cultural heritage. A major IP is playing a crucial role in attracting tourists. Fan Deng intends to make full use of the unique environment of the Yunwu to build a high-level hotel which is called Yunwu B&B. Through this, visitors will be able to enjoy the tranquility of the Yunwu B&B after a busy workday, breathe fresh air in the mountains, embrace the most beautiful tea plantation in the fields, and experience the fun of tea picking, tea making machines, and tea tasting.

4.2

Displaying the Talent

(1) Winning the “Qian Tea Award”. On the afternoon of August 8, 2018, there was a hubbub of voices at Qianzhiguan. “Congratulations, our white tea won the first prize in the selection of ‘Qian Tea’! This is assessed by the experts of the Guizhou Tea Industry Association! This shows that our tea has strength!” Many repeated what the others said. Fan Deng was also overjoyed and said, “As an enterprise that has been established for less than a year, we received this award. We should make persistent efforts and strive for recognition on a higher platform”.

Fan Deng understood that this award was difficult to win. From the initial fledgling, even the planting and processing of white tea had to be learned to a certain extent, and now the tea had won the first prize of the sixth “Qian Tea” award with its first-class quality. She remembered all the attempts and the necessary persistence vividly. The company philosophy was to always adhere to the organic green tea concept and practically implement the concept of sustainability. As it became recognized at that moment, employees’ initial confusion and dissatisfaction with the concept gradually dissipated. Everyone understood

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that Qianzhiguan’s reputation would spread only by perfecting perfection at the source. (2) New chapter in tea culture tourism. From parent–child outings to tea plantations to tea culture tourism for University of Toronto international students, Qianzhiguan began actively promoting tea culture tourism projects. Visitors were able to pick tea, make tea, pick wild vegetables, cycle around YunWu lake, or just enjoy the tranquility of Yunwu. As many families and companies hurried to participate, the tea culture tourism of Qianzhiguan began to thrive. Local companies and schools, along with Qianzhiguan, began to organize tea plantation experience activities for international students (shown in Fig. 3). A student named Mary from University of Toronto came to the tea plantation on June 6 which is a festival of the Bouyei nationality in Qiannan. According to the Bouyei nationality custom, Mary put on the national costume, brought the glutinous rice, chicken, duck, fish, and watery wine, and invited others as guests. Mary said, “Everything about picking tea is exciting, like making it, and the Bouyei nationality festival. I hope that more and more friends can come here to experience the beauty of Guizhou.” The reputation of Qiancha gradually spread, and many domestic and foreign Chambers of Commerce have also come to Qianzhiguan for field visits. Fan Deng received the International Chambers of Commerce from Russia, Iceland, and other places warmly, and introduced the organic tea of Qianzhiguan and the beautiful Yunwu Town. She expects that Guizhou, which is full of tea fragrance, would become a world-famous brand through perseverence. (3) Targeted poverty alleviation and rural revitalization. In the report of the 19th National Congress of the Communist Party of China released in October 2017, General Secretary Xi proposed to implement a full “Rural Revitalization Strategy”, and comprehensively solve issues relating to agriculture, rural areas, and rural people, as well as promote the process of rural modernization in China. The document points out that, “Until 2050, we should strive for comprehensive rural revitalization, achieve the goals of strong agriculture, beautiful rural areas, and rich peasants.” Fan Deng understands that the economy and industry’s rural revitalization can be achieved through various aspects such as the ecological environment, culture and education, and talent. Rural areas need to follow a path of urban–rural integration development, rural green development, and sustainable development. Qianzhiguan is putting in place this “Rural Revitalization Strategy”. It has achieved green and sustainable production and planting, using the triple indicators of the EU, the United States, and China as production standards, which can protect significantly the ecological environment. Qianzhiguan also has formed a talent community with Fan Deng at its core. Gene planting, production, and management have attracted a new influx of talent to settle in Guizhou. Fan Deng also wants to achieve deep processing of tea and even

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Fig. 3 Tea plantation experience activities for international readers in Qianzhiguan. Source: Gzdsw.com

incorporate tea into embroidery and other crafts. Additionally, Qianzhiguan is receiving tourists from all over the world weekly, introducing them to Qiancha, encouraging their participation in the local activities of the minorities, promoting Qiannan tea culture tourism, and contributing to the spread of tea culture. Qianzhiguan also created a large number of employment opportunities for farmers in Qiannan. In the past 5 years, Fan Deng’s tea plantation has become the employment solution for more than 500 farmers in the surrounding villages, where the average household income has increased by more than RMB 4,000. In addition, Qianzhiguan has led indirectly to the employment of 5,000 people, and an increase in per capita income of more than RMB 2,000. The total number of employees in the area is 100,000, of which the poor account for approximately 30% of the labor force. Figure 4 shows the news that Qianzhiguan signs an enterprise–village partnership assistance agreement on the website of local news.

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Fig. 4 Qianzhiguan signs an enterprise–village partnership assistance agreement. Source: Wsgz. gog.cn

Fan Deng has often said, “The tea industry is like a small leaf that can impact many farmers. Our average annual income per acre is RMB 3,000. In other words, a one-thousand acre tea plantation earns RMB 3 million per year, and this income stays local. This industry can realize self-worth, social value, and ecological value.”

4.3

Direction Selection

Fan Deng never stops observing and thinking about the national situation and the development of the tea industry. The popularity of the internet and the application

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of new technologies, such as cloud computing and big data, have changed the relationships between different industries. Some new forms of business are emerging with the combination of traditional industries and the Internet. Whether it is agriculture, industry, or other industries, the trans-boundary and integration trend is becoming increasingly apparent. Agriculture is the foundation of economic development. It is also the foundation of social strength and industrialization that can stabilize the world. Agricultural information needs to be mastered by the World Food and Agriculture Organization, national governments, and agricultural production management. The Internet is changing traditional agriculture. Fan Deng feels that the transformation of the Guizhou tea industry is urgent. In the future, tea plantations will need to use industrialization, informatization, and urbanization. She believes that the tea industry should include industrialization achievements, informatization achievements, and promote its modernization in Guizhou.

5

One Small Shift Can Yield Significant Results

Fan Deng is often asked, “How does Qianzhiguan compete with other large tea enterprises?” She answers directly, “Why do you want to compete with other tea enterprises?” In her opinion, the aim of Qianzhiguan is not to beat out other tea enterprises but to create something new in the tea industry in Guizhou while pursuing sustainable development. However, Fan Deng understands that today’s tea industry is intensely competitive, and teas, such as Pu’er, Longjing, and Biluochun, are more prevalent in the market. The tea industry’s growth potential against the backdrop of the “Internet plus” is enormous, and the economic benefits are priceless. The government’s support, the gathering of talent, and the call of the times have all prompted Deng to plan a more transparent strategic goal, encouraging Qianzhiguan to take on heavy responsibility as a leading enterprise, and drive the industrial transformation of Guizhou. Fan Deng wonders if Qianzhiguan can gather scattered farmers to achieve economies of scale, quickly coalesce complementary resources and capabilities, and create bargaining power through the aggregation of resources. Of course, as the organizer of this process, Qianzhiguan can establish more effective and strong relationships with customers and maintain its competitive position and advantage. The ultimate goal of Qianzhiguan is not to sell more tea but to promote the development of the tea industry in Guizhou, build a green brand for Qiancha, and create more value and significance for the industry and society.

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5.1

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Green Production and Building a Smart Tea Plantation

Subsequently, to put her ideas into action, Fan Deng began to think about and closely observe how other similar industries integrated agriculture and the Internet. She found that Western countries had done an excellent job in this regard. By building a platform, enterprises could provide medicine, fertilizers, equipment transactions, financial services, and more to platform participants. This would save costs and scientifically improve the production efficiency of the entire industry. A platform also uses the Internet of Things (IoT) to collect production data, acquire and analyze the IoT data, generate big data, and then offer access to third-party organizations to build subject-oriented models and realize artificial intelligence (AI) services. Fan Deng’s goal is to integrate the IoT with a tea planting system to create a smart tea plantation. The IoT system will include environmental monitoring and seedling monitoring through sensing equipment that can monitor the pollution parameters and the number of pests in tea plantations, and implement environmental control and pest control over time. Special equipment, such as irrigation control and rail transportation, intelligent irrigation, and drainage, can be implemented while reducing manual transportation costs significantly through electrical equipment and network hardware that ensure system operation stability. Each function and device will use a unified interface. Moreover, data are uploaded to the IoT platform and the production cloud platform through a smart gateway. Data collection, sorting, AI learning, real-time analysis of tea plantation conditions, and reasonable predictions can provide a basis for enterprise management and control, production plans, and other behaviors. The smart tea plantation can provide a meaningful and personalized value for Qianzhiguan. (1) Numerical indicators can quantify and track production and planting behaviors for enterprises so that behavioral changes by error correction can be ensured. (2) Previous data and decisions collected in real time can help managers narrow the range of choices and make decisions faster and better. (3) The visualization of data can help people use indicators and algorithms effortlessly. The services of the smart tea plantation are not based on the technology itself but rather on domain knowledge and mathematical models. Therefore, the technology has to be reasonably and practically applied to create value that is useful and promotable. Qianzhiguan also regards the smart tea plantation as an opportunity to implement gradual poverty alleviation. Taking the production and plantation step as an example, before the tea plantation work, facial recognition technology can be used to record each member of a poor household and their working hours. Those household members can then be found when they are absent due to poor health. Data

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can also be reported to relevant departments for necessary relief measures to make poverty alleviation more precise. On August 26, 2018, Fan Deng invited experts from the China Tea Institute and Guicha Tea Institute to the smart tea plantation to conduct an on-the-spot investigation. After touring Laoya village and the new tea plantation base, these experts gave the Qianzhiguan smart tea plantation a high evaluation based on her explanation. One expert said, “According to the meteorological conditions of the tea garden, the smart tea plantation of Qianzhiguan can make the integration more intelligent. Moreover, it can also monitor the growth status of tea trees at different growth stages. The smart tea plantation will make tea production much easier.” Fan Deng also had great confidence in this. She said, “The smart tea plantation is just the first step in optimizing the tea industry. Every step of Qianzhiguan should be implemented faithfully.”

5.2

Concentrate on Building a Technology Enterprise

While the employees had high expectations for the smart tea plantation, Fan Deng was still thinking about how to improve the optimization and upgrading of the tea industry in Guizhou through the transformation of Qianzhiguan. Tea farmers in Guizhou were scattered and had no individual power to confront other large enterprises. Fan Deng understood that only by integrating the power of these farmers could the weak feature of tea agriculture be corrected fundamentally. “At present, it is not enough to establish the top brand of Qianzhiguan. In the long term, integrating local tea enterprises and establishing an integrated brand for Guizhou tea can improve bargaining power and generate more economic and social benefits. The current tea enterprises are still too scattered,” said Fan Deng. She continued, “It may be possible to build up a smart tea platform through a technology company which will promote standardized systems and create collaborative opportunities between tea companies.” “It is a good idea,” the team members agreed with Fan Deng, “Through the production systems and the sales platform, it will not only achieve the production standard and save on manufacturing costs but also trace the process of tea quality management. Thus, the quality of Qian Tea will be controlled, and the Guizhou tea brand will be enhanced eventually.”

5.3

Focus on the Critical Point

Fan Deng also discussed with her team members the factors that should be considered when transforming and updating the tea industry, especially funds and government policies. Agriculture is an industry that requires subsidies. However, many small- and medium-sized enterprises and individual tea farmers do not have

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enough available funds. Bank loans can improve enterprise development. However, they also increase their liabilities, and may even lead to an economic bubble or other risks. Therefore, it is crucial to broaden the tea industry’s sales channels beyond selling individually so that a breakthrough can be made in the competitive market. Although technology can drive the Guizhou tea industry’s transformation by using the smart tea platform as the means to gather together tea farmers and small tea enterprises, the question is what is the first step for most tea companies to utilize this technology platform? Many internet enterprises spend excessively to collect customer resources. Should Qianzhiguan do this as well? Although Qianzhiguan wants a significant result, how can this be achieved with only a small step?

6

The Road to the Future

The Internet is having a significant effect on production modes. Today, Qianzhiguan is trying to transform itself while gradually promoting the transformation and advancement of the Guizhou tea industry. It remains an immense challenge to build the Guizhou tea brand inside China and even overseas through the use of big data. Fan Deng knows she is lucky to be supported by the local government. She also believes firmly that technology will bring benefits to Qianzhiguan. However, the biggest challenge for Qianzhiguan is not any process in the industry chain or the project itself, but rather how to integrate tea farmers and small tea enterprises into the platform to achieve the well-leveraged function of the smart tea plantation. As Fan Deng looked out over the tens of thousands of acres of the tea garden, she understood she would encounter difficulties in the future. Nevertheless, she did not feel undue pressure. She felt driven to lead Qianzhiguan toward a bright future.

Brand Marketing of Geographical Indication Products in Xinjiang Tianxiaxiang Mingxing Li, Mengjuan Zhang, and Oswin Aganda Anaba

1

Introduction

The original source of “Tianxiaxiang Famous Specialty” (Tianxiaxiang) is the Hualing Market, Urumqi City, Xinjiang, China Fig. 1 shows its business license. This market mainly engages in the wholesale and retail business of Xinjiang geographical indication (GI) products. The GI label is shown in Fig. 2. Over the past decade, different kinds of Xinjiang GI products have been marketed. The first type of GI agricultural products included Korla Pear, Ruosiang Jujube, Jiashi Melon, Zhaosu Potato, Muscat Grape, Red Fragrant Grape, Green Fragrant Grape, Black Beauty Grape, Sapphire Raisin, small White Apricots, dried and fresh fruits, and walnuts. The second type included GI medicinal products such as Tianshan Snow Lotus, Qinghe Berries, high-altitude MaKa, saffron, and safflower. The third type included GI handicrafts such as Hetian Ederles silk (a kind of silk), Yingjisha Knife, scarves, red wine, camel milk powder, and essential oils. In March each year, Tianxiaxiang enters its busy season. During this period, the founder and manager, Hua Su, and her employees work from dawn until midnight to deliver Xinjiang’s GI products all over the country, mainly the “Kuche Little White Apricot” and the “Yecheng Black Leaf Apricot”. The difference between Hua Su and other GI-product distributors is that Hua Su has cooperated with e-commerce companies for some time to ensure that all kinds of fruits, such as “Hetian Jade Jujube”, can be delivered directly from its place of origin to customers. Benefiting from this business model innovation, Tianxiaxiang has more than 10,000 WeChat customers and more than 5,000 returning customers. Its customers are located in cities, villages, and pastoral areas in 31 provinces and

M. Li (B) · M. Zhang · O. A. Anaba School of Management, Jiangsu University, Zhenjiang, China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Fan et al. (eds.), Casebook of Chinese Business Management, Management for Professionals, https://doi.org/10.1007/978-981-16-8074-8_3

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Fig. 1 Business license of Tianxiaxiang Famous Specialty in Hualin Market. Source: Provide by company

Brand Marketing of Geographical Indication ...

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Fig. 2 China’s geographical indication label. Source: Gov.cn

municipalities directly under the central government and autonomous regions in China. The annual sales of Tianxiaxiang are more than RMB 3 million. Recently, Tianxiaxiang has become a GI product brand leader in Xinjiang in China.

2

GI Product Marketing Issues

GI products are faced with many practical problems. First, as they are perishable and difficult to transport, GI products are produced on a small scale, have high transportation costs, and an inadequate capital chain of GI product managers. Second, the GI brand is not standardized, which affects a positive image. For example, unscrupulous competitors use inferior products to mimic GI products, put Hami Melon’s label on standard melon without any official GI source, and imitate Xinjiang’s appearance or packaging. This “brand strain” effect disrupts the regular order of the GI product market by damaging the market position of real Xinjiang GI products and tarnishing its image in consumers’ minds. The sudden outbreak of COVID-19 has also contributed to these challenges by causing many GI products to be stranded due to an inability to transport them to customers. During the epidemic, most transportation channels have been shut down, affecting GI product delivery from place of origin to customers. Xinjiang GI product bottleneck problems can be attributed to several factors. The first includes GI brand awareness, GI product production, marketing information, and the lack of secured protection in the network environment. The second includes insufficient investment in talent and technology. The overall modernization level of GI products needs improvement. Moreover, there is a need for

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adequate supervision by relevant government departments, standardization, and improvement of Xinjiang GI products. In addition, the promotion of the Xinjiang GI brand is not effective, which leads to the poor brand effect of Xinjiang GI products.

3

Explaining the Path to Success for Tianxiaxiang

Why is Tianxiaxiang well-known in Xinjiang in China? The simple answer is that Tianxiaxiang formulated and implemented a series of successful brand marketing strategies for Xinjiang GI products.

3.1

The Tianxiaxiang Enterprise Name

Tianxiaxiang, as an enterprise name, embodies the organic combination of natural and human factors, making the brand particularly memorable. As far as customers are concerned, as the Tianxiaxiang name reminds them of Xinjiang GI products, this significantly reduces their search time for these products.

3.2

The Shape of the GI Products Brand Via Packaging

Tianxiaxiang makes a significant effort in its product packaging. Green packaging materials are chosen with the environment in mind, and the packaging culture highlights health ideas. The Xinjiang GI products sold by Tianxiaxiang have a strict unified standard in terms of packaging design, size, and quantity. The quick response (QR) code on the package contains detailed information on the GI product. If there are problems, the information can be traced back to the source of the GI product. The excellent quality and specialty packaging appeal to consumers all over the country.

3.3

Enriching the GI Product Brand Via Culture

In terms of brand culture, Tianxiaxiang designs and markets Xinjiang GI products using a cartoon character, the Chinese Zodiac. It also uses other familiar cultural items to express love and celebrate festivals.

3.4

Creating the GI Product Brand Via Advertising

Tianxiaxiang also focuses on GI products in terms of advertisement and publicity. By highglighting individual characteristics, Tianxiaxiang showcases the differentiated properties of Xinjiang GI products. Different advertising platforms, such

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as traditional media, and trade fair summit forums, are utilized to expand the distribution channels of Xinjiang GI products.

3.5

Integrating Brand Marketing in Online and Offline Channels

Tianxiaxiang has broadened Xinjiang’s GI product marketing channels and created newly integrated marketing platforms. First, it commissioned a computer expert from Xinjiang University to develop a small program called Tianxiaxiang, which encompassed an online sales platform for GI products. Marketing data show that the scale effect of the “platform economy” of Internet companies can expand GI product brand recognition and market share. Second, Hua Su has appeared personally on live broadcast platforms to introduce and sell Xinjiang GI products to benefit local farmers, attracting nearly 2,000 Internet users to watch and generating an increase in sales of nearly 300% year-over-year. With the help of the live broadcast and logistics, GI products have been delivered to a wide array of customers in China, and the brand marketing effect has been significant. Moreover, due to changes caused by the COVID-19 epidemic, Tianxiaxiang has completed the rapid transformation from selling through offline channels to selling online, while not only cultivating new customers but also retaining old ones. Tianxiaxiang has also integrated a complete online and offline marketing channel system, which objectively improves the marketing channel system’s risk management ability and flexibility. Finally, Tianxiaxiang promoted GI brand construction via marketing channel reform. During the epidemic, Tianxiaxiang took the bold move of innovating its mode of marketing cooperation and successively launched three marketing channels: “farmers plus self-operated online stores plus consumers”, “farmers plus leading enterprises plus e-commerce platform”, and “farmers plus cooperatives plus e-commerce platform”. Tianxiaxiang has expanded the brand influence of GI products through these multiple channels to establish a solid marketing brand image in its largest market, the Xinjiang’s Hualing Market. In addition, Tianxiaxiang integrated the upstream and downstream industrial chains of the GI products, guiding farmers, distributors, and logistics enterprises to form strategic alliances in the supply chain. It made the most of these logistics advantages to advance its business alliance process. It re-engineered and strengthened the supply chain and brand advantages of GI products and vigorously promoted the industry’s sustainable development in Xinjiang, China.

3.6

Spreading Xinjiang GI Brand Product Information Via Internet Technology

The method used by Tianxiaxiang not only delivers GI product information but also reduces marketing communication and circulation costs, making it conducive to building the GI product brand. Through the e-commerce channel of applet of

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Fig. 3 The Tianxiaxiang Program in applet of Wechat. Source: Provide by company

WeChat (see Fig. 3), GI product information is more open and transparent, thereby promoting the brand and its reputation. Furthermore, in the course of the pandemic, Tianxiaxiang and its partners took advantage of the “National Green Channel for Fresh Products” owned by JD.com and the “Anti Epidemic Agricultural Products Zone” owned by the Pinduoduo Inc., to provide chain transportation service for customers everywhere.

3.7

Selling GI Brand Products Via the Sharing Economy

On the one hand, Tianxiaxiang has been able to set up a customer experience space referred to as the “Shared Farm” by relying on the Internet as well as the wasteland and Gobi Desert in Xinjiang, all considered aspects of the sharing economy. Existing customers had the right to own a small piece of land in the “Shared Farm,” and plant their favorite GI products on this “Shared Farm”. On the other hand, with the help of WeChat, Tianxiaxiang established a network platform (see Fig. 4) that was able to serve both ends of the product supply chain, farmers and consumers. It provides channels that display products and release supply information as well as offer a live broadcast of product picking and sales reservations. This helps farmers expand their sales markets, reduce circulation links, save circulation costs, and protect their interests better.

3.8

Developing Experiential GI Brand Marketing

Tianxiaxiang, together with travel agencies, often organize customer tours to Xinjiang’s local orchards, where these customers can enjoy picking GI products such as small white apricots, grapes, and walnuts, and visit facilities producing safflower and saffron. While pleasing consumers, experiential marketing can create a strong brand image for GI products, emphasizing that natural safety and high-quality

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Fig. 4 The products selling in Tianxiaxiang applet of Wechat. Source: Provide by company

messages become ingrained in the hearts and minds of all customers. Furthermore, Tianxiaxiang has been focusing on Internet plus experience marketing. In 2018, the mining ceremony of Xinjiang GI products was released to Chinese customers for the first time through live streaming. Customers were able to enjoy the rich scenery of Yili Lavender in Xinjiang, and watch black beauty grape picking and hand-drying techniques, among other exciting events, and literally enjoy the cultural charm of GI products.

4

Future Developments

In the future, Tianxiaxiang envisions cooperating with dozens of Xinjiang’s GI industry associates to promote the rapid development of the brand. These organizations will bring together scattered farmers to carry out large-scale planting or production of GI products according to unified standards and, at the same time, cooperate with well-known and leading enterprises in the field of GI to improve GI brand competitiveness. Again, there will be an exploration of natural and cultural resources for GI products and the promotion of featured industries such as leisure tourism and sightseeing experiences. This approach can promote the mutual integration of industries and transform the resource advantages into market competitive advantages through the brand’s influence. Finally, there will be strong support for upstream and downstream enterprises associated with GI products, eventually creating an agricultural cluster for the famed Xinjiang brand.

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Suggestions for “Xinjiang Melon and Fruit, Famous All Over the World”

As there are many GI product public brands, a single enterprise’s strength is limited, making it a challenge to become a leader in brand promotion. In Xinjiang, different levels of governments and their relevant departments need to pay close attention to regional collective brand construction and improve the influence and competitiveness of GI regional brands. With economic globalization and increasingly fierce market competition, there are challenges from foreign GI products. GI brand can be used to enhance product market competitiveness, improve the GI industry’s overall image, promote the advancement of relevant industrial clusters, and safeguard consumers’ legitimate interests. The quality supervision system of GI brand products should be continuously improved. Standard quality inspection systems should be established and effective supervision methods implemented to ensure real-time supervision of essential operations, including production, processing, and marketing. At the same time, legislation and supervision should be strengthened to crack down on fake and inferior products to maintain the brand reputation of GI products. Finally, a protection and promotion platform should be established to protect GI products so that Xinjiang GI products can penetrate markets and expand across the world.

TikTok: How a Chinese Video Clip App Became a Popular and Successful Global Brand Mingyue Fan and Morrant Hemans

1

Introduction

Social media trends are moving so fast that it is difficult to keep track of everything that is happening among users. Such trends took off in 2008 when Facebook became a large part of the market. Facebook offered a chance for people to show off their talents and advertise their brands. Since then, social media has evolved beyond people’s recreational activities and entertainment. For years, the battle between social media platforms has been among major platforms such as Facebook, Instagram, and Twitter. However, the Tiktok app, also known as Douyin, has been rising above the competition over the past few years, and has experienced massive usage growth since its launch in 2016 (Influencer Marketing Hub, 2019). TikTok is an app that shares popular social media videos globally (Lamare, 2019). A video clip is a type of Internet content transmission that often goes viral within 5 minutes after it is uploaded online. With the popularity of smartphones and fast broadband networks, short-term and high-traffic information is gradually spreading, and TikTok is gaining an upper hand among all social media platforms, fans, and investors. Users can create and share 3-15-second videos featuring lip-syncing, comedy, or almost anything else. Tiktok is the brainchild of Yiming Zhang. His company ByteDance launched the Tiktok service September 2016 in China, and outside China in September 2017. In October 2018, TikTok became the most downloaded app in the United States, making it the first Chinese app to reach this milestone. In February 2019, TikTok hit 1 billion downloads globally (Lamare, 2019).

M. Fan (B) · M. Hemans School of Management, Jiangsu University, Zhenjiang, China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Fan et al. (eds.), Casebook of Chinese Business Management, Management for Professionals, https://doi.org/10.1007/978-981-16-8074-8_4

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2

The Rise of the Company

2.1

Becoming a Top Global Brand

The Chinese company Bytedance introduced the app, Douyin, in September 2016. The company developed the app in just 200 days, and within the first year, it had 100 million users and more than 1 billion video views per day. Bytedance expanded the app internationally in September 2017 and rebranded it in the international market while keeping the Douyin name in China. By January 2018, TikTok was the number one free mobile app in several countries, including Thailand. Bytedance purchased Musical.ly on November 9, 2017, for an undisclosed sum, predicted to be close to USD 1 billion. TikTok saw it as a way to expand into the United States teenage market, which Musical.ly already dominated. The company merged the existing accounts from both programs and consolidated them into the TikTok app. The original Chinese version of TikTok, Douyin, remained as a separate app in its home country. Unsurprisingly, given China’s size, Douyin is still huge. It has more than 300 million monthly active users. The merger between TikTok and Musical.ly was not the end game. TikTok continues to expand. In September 2018, it was the most downloaded free app in Apple app store in the United States. It also ranked first on Google Play in October 2018. Counting both the Apple app store and Google Play download stats, TikTok ranked third in the world in November 2018. It was downloaded more than 104 million times from Apple app store during the first half of 2018. eMarketer indicated that TikTok’s ranking ranging between two and seven in terms of combined app store downloads between June and November 2018 in the United States and worldwide, as shown in Table 1. • Of all the apps, TikTok ended up being the fourth most downloaded app in 2018 and in the third position in the most recent statistics (Q1 2019), topping the Apple non-game apps chart and ranking third among iOS users, behind WhatsApp and Messenger. • TikTok is now available in 154 markets and 75 languages. As of June 2018, it had 500 million users globally and had been installed on devices 800 million Table 1 TikTok’s rank in the US and worldwide in 2018. Source: eMarketer

Month/Year

US rank (No.)

Worldwide rank (No.)

June 2018

7

3

July 2018

5

4

August 2018

6

4

September 2018

6

4

October 2018

2

4

November 2018

2

3

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times, excluding Douyin downloads on Android devices in China (Influencer Marketing Hub, 2019). With five hundred million users by 2018, TikTok’s skyrocketing growth has been so fast that Facebook has taken notice. Given its presumably multi-billion dollars firepower, it will not be easy for Facebook to block TikTok’s growth. TikTok seems to be attracting users of specific demographics via paid ads. Be it a YouTube, Google, or Facebook ad, TikTok is pursuing a blitz campaign to make it ubiquitous. A few players, like Facebook, dominate the industry today; thus, relentless growth is critical for TikTok to be able to gain enough momentum to survive any competitive action (Cuofano, 2020).

2.2

Position in the Home Market: TikTok (Douyin) in China

In China, Douyin’s daily active user count stands at 400 million as of January 2020. This is an increase from 250 million in January 2019, when 68% of Chinese social media consumers used Douyin, and 59% of all smartphone users, according to ByteDance. These figures are set to increase in 2020. Previous figures set Douyin’s monthly active user count at 300 million in June 2018, with 150 million of these users logging into Douyin daily. According to Chinese media reports, this increased to 400 million monthly active users and 200 million daily active users by November of that year. Overall, the video clip format is big business in China, accounting for 9% of online screen time in the world’s most populous nation, as of late 2018. According to Miaozhen, data published by WalktheChat, Douyin overtook Kuaishou in the first quarter of 2018 to become the most popular video clip app in the country. QuestMobile data from June 2019 show that this remained true the following year as well. Douyin’s monthly user count of 486 million at this point is well over Kuaishou’s 341 million users. Notably, ByteDance’s dominance does not end with TikTok. Its Xigua (more focused on a user searching, allowing for videos up to 5 minutes) and Huoshan (live streaming) apps, with 131 and 106 million users, respectively, are the third and fourth most used video clip apps. However, both are some distance behind Kuaishou. Media titans Tencent and Baidu fill the bottom rungs, with their apps ranking behind in active user counts. The exception is Tencent’s Weishi, which is not far behind ByteDance’s apps. The standout feature of Weishi is its lyric and subtitle matching and access to the sizeable QQ music library. From left to right, Fig. 4 compares the monthly active users of ByteDance’s Douyin, Xigua, and Huoshan, Kuaishou, Tencent’s Weishi and Huoguo Shipping, and Baidu’s Haokan Shipin and Quanmin Xiao Shipin (Iqbal, 2020). See Fig. 1 of the top short-video apps in China. eMarketer predicts that the total number of active Douyin users in China will rise to 556 million by 2023, and account for 60% of the mobile users in the country. Figure 2 shows the trend of Douyin users in China from 2018 to 2023.

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Fig. 1 Top short-video apps in China, MAU, hundreds of millions. Source: QuestMobile via Pandaily

Fig. 2 Douyin users in China, 2018–2023. Source: eMarketer

The combined penetration of ByteDance’s video apps in China was 72.1% in September 2019. This compared with 42% for Kuaishou. As already stated, in 2019, ByteDance had penetration figures of 56.6% of smartphone users as shown in Fig. 2 (notably, these are drawn from different datasets).

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Fig. 3 Most used apps of 2019, Android and iOS. Source: App Annie

2.3

Position in the Global Market

As the creator of the top-rated 15-second video app TikTok, few tech startups have taken off as quickly as ByteDance. In only 2 years, TikTok is rivaling companies such as Netflix, YouTube, Snapchat, and Facebook, with more than 1 billion downloads in 150 markets worldwide and 75 languages (Fannin, 2019). The App Annie State of Mobile 2020 report ranks apps according to user numbers, although without figures. It puts TikTok in sixth place in terms of global users, making it the highest non-Facebook or -Tencent app. Instagram is in fifth place with 1 billion users, and Alipay in eighth, logging 785 million users in the third quarter of 2019. This helps confirm what seems implied by TikTok’s VP Blake Chandlee, that TikTok’s user base is climbing to 1 billion (Iqbal, 2020). See Fig. 3 for the most-used apps of 2019 by Android and iOS. Hootsuite and We Are Social set the figure at 800 million. This would make it the sixth most used social app in the world. Only the various Facebook properties, YouTube and WeChat, ranking ahead of it. Notably, it has leapfrogged Tencent QQ and QZone (Iqbal, 2020). Figure 4 shows TikTok users versus other major apps.

2.4

The Identity of TikTok’s Brand

TikTok’s identity has not changed significantly since its launch. The colorful musical note emphasizing the app’s relationship to music has been its logo from the beginning (Shpitula, 2020). Looking at its updated logo, it has the same note but

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Fig. 4 TikTok users vs. other major apps. Source: Hootsuite/We Are Social

an added effect that is similar to 3D colors. In addition, the TikTok name has been added to the symbol for greater brand recognition. The simple “Note” logo for the app or for advertising did not always guarantee brand recognition and memorability. With the addition of the “TikTok” name to the logo, users may remember the brand better. In 2018, as mentioned, the famous Chinese app Musical.ly became part of TikTok, which provided the impetus to update the logo design. In the new logo, a 3D effect was added to the letter “O,” with the rest of the logo unchanged. To convey the tremolo musical effect, several colors were combined. The main one is black combined with a purple shade of red and a light aqua. They are unevenly stacked on top of each other, giving the impression that the pattern is trembling under the influence of an electromagnetic field (Logos-World.net, 2020). Figure 5 shows the TikTok logo evolution.

Fig. 5 TikTok logo evolution. Source: https://Logos-world.net/TikTok-logo/

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3

Marketing Promotion

3.1

Star Promotion

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The launch of the TikTok app began on March 13, 2017. As part of the launch, Yunpeng Yue forwarded a microblog that mimicked a vibrating logo. From there, the Baidu index of the vibrating app began to soar. The vibrating app enticed celebrities and fans to participate as well as watch. Using celebrities has increased TikTok’s notoriety and attracted fans. TikTok invited Yanbin Hu to participate after the hit single, “No Choice.” Subsequently, an increasing number of stars have appeared on TikTok, followed by spiraling TikTok exposure. In the summer of 2017, the variety show “China has hip-hop” went viral all over the Internet, and in the “Star Detective,” the star played video clips on the show. Both events created a massive breakthrough for TikTok in exposure and number of users. During the Spring Festival of 2017, TikTok invited 12 big stars, such as Wei He and Dilraba Dilmurat, to make vibrating sounds on video. The “Bean Sprouts” video was created and a blessing was sent to the “Bean Sprout” nickname. As these marketing activities continued, the number of daily active users increased. With this, TikTok gained popularity in a short period and grew its large user base of fans (Qingguang, 2011).

3.2

Advertising Marketing Investment

TikTok increased its popularity through advertising marketing. It often appears in an advertisement for the variety show “China has hip hop", which has increased the app’s exposure. The viewers of the show recognize the vibrating app logo, which has increased the number of users creating vibrations. The TikTok app has also advertised on various variety shows such as “Star Detective", with its stars, such as Jingting Bai and Han Lu, recording videos on the show. This has reinforced the star power and advertising effects. The company has increased its advertising intensity by inserting advertisements before movies during peak advertising periods in theaters. Obviously, TikTok has invested in the labor and financial resources needed to advertise to consumers. Through these efforts, it has quickly increased consumer awareness of the brand (Jiani, 2017).

3.3

Various Online and Offline Activities

In its marketing, TikTok has not limited it efforts to online activities but has also attached importance to offline promotions. On the Internet, users can share their vibrating videos of editing and special effects on Weibo and WeChat friends, and make full use of the power of WeChat and Weibo to achieve a significant increase in TikTok exposure. TikTok is also marketing through expanded offline activities. It has cooperated with Today’s Headlines and Jundi Brothers Media on offline

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activities, such as the 2017 National Youth Talent Competition, so that consumers have more than just an online experience. The fun of “vibrating” can also come from recording video clip interactions with other users and stars online. TikTok also held a shake-up party. As such, it makes full use of both online and offline communication channels to enhance its influence and expand the breadth of its communication, thereby increasing the number of active users in the TikTok community. It also promotes the frequency of the compiling of video clips (Xu et al., 2019).

3.4

Taking the International Route

Byte Dance made the acquisition of the video clip platform Musical.ly. By recruiting partners, the company upgraded its brand strategy, adopted an international approach, and expanded its global users. As the international version of the app, TikTok has focused on the development of users in Southeast Asia, Japan, and South Korea markets. It has been well received in these countries and in Thailand. Its success confirms that the strategy of creating vibrating videos to generate an international sensation has opened up markets and increased the number of users (Xu et al., 2019).

3.5

Top Brands Marketing on TikTok

Dating back to late 2018, fashion brands, such as Calvin Klein and Ralph Lauren, started to add the platform to their social marketing mix. In 2020, a wave of brands, like Prada, Alice + Olivia, Dolce & Gabbana, Tory Burch, Burberry, and Missoni, began jumping onto TikTok. A simple and transitional step for some companies has been working with influencers and content creators native to TikTok. For instance, Prada has a TikTok account with 100,000 followers so far, but has not posted on its page. Instead, the company has relied on D’Amelio to create buzz. Kristin Maverick, who is the vice president of social and influencer marketing at advertising agency 360i, has said that this approach is a smart strategy on Prada’s part as it puts the onus on other creators before the company jumps fully into TikTok content creation (Richards, 2020). Consider, for example, the Guess brand’s #InMyDenim campaign. On September 1, 2018, the Guess brand took over TikTok and invited all United States TikTok users to their #InMyDenim hashtag challenge. The contest urged users to create video content while wearing denim (of course) and using the hashtag. This was the start of TikTok’s brand partnerships in the United States. Several brands have utilized techniques like TikTok challenges and contests to get users to generate brand-related content. Brands also leverage hashtags in a more or less similar fashion to other social media platforms to promote their TikTok marketing campaigns (Influencer Marketing Hub, 2019). There are five

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core ad products on TikTok. These are the hashtag challenge, brand takeover, infeed video, branded lenses, and top view.

3.6

Celebrity Endorsements

The app is well liked and used by several celebrities, such as Jimmy Fallon, who have helped drive its popularity. It also has paid partnerships with several celebrities in various regions to promote the app to local audiences. With the rise in TikTok downloads, it was inevitable that celebrities and high-profile stars would take an interest in the platform, as reported by the Guardian. The success of any burgeoning app is often tied to the early adoption of a critical celebrity. The fortunes of Snapchat have been closely tied to the whims of Kylie Jenner, Instagram to Selena Gomez, and Twitter now has Donald Trump. For TikTok, late night comedian Jimmy Fallon may be the star who pushes it to fame in the United States. Jimmy Fallon referenced TikTok videos in a segment of the NBC’s Tonight Show in November 2018. He suggested that people might like to use TikTok to upload videos of themselves lip-syncing along with standup comedy routines. He encouraged viewers to take part in a series of challenges, such as the TumbleweedChallenge, where people stop what they are doing and roll around on the ground like a tumbleweed while an old western movie soundtrack plays (Influencer Marketing Hub, 2020).

4

Artificial Intelligence Technology

4.1

Algorithms and Technology Recommendations

The TikTok app works under a series of headlines. “Today’s headlines” uses a powerful algorithm technology to tag and label user-published content. After the user opens the vibrating app, the home page pops up a video by sliding fingers, making it easy to operate. The vibrating app can accurately analyze the user’s preferences according to the most liked video type and the dwell time on a particular video. It then feeds the user a video clip of that type, thereby increasing usage frequency (Wei, 2017; Xu et al., 2019). TikTok relies on AI technology in two ways (Davis, 2019). First, on the consumer side, its algorithms quickly learn individual preferences, as it captures not only the users’ “likes” and comments but also how long they watch each video. As the clips are short, TikTok’s algorithms quickly build sizeable datasets. Second, on the producer side, AI helps content creators craft viral videos. It simplifies video editing and suggests music, hashtags, filters, and other enhancements that are trending or have proved to be popular based on the category. This AI recipe is so effective that experts have cautioned against the TikTok addiction. Similar to Facebook and Instagram users, the average TikTok user spends 52 minutes a day

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on the app. In that timeframe, they may watch more than 200 videos, including carefully targeted ads or offers.

4.2

The First “Dance Dancer” Function

One of the reasons for the rapid popularity of TikTok is that the app can launch the “Dance Dancer” function. Users can play the dance machine on their mobile phones, relying mainly on “human key point detection technology,” which is ultimately based on AI’s algorithm technology. After the launch of the “Dance Dance Machine,” the downloads of TikTok have been increasing and it has been well received by users.

5

Meeting the Needs of Users

5.1

Eliminating Information Uncertainty

Eliminating information uncertainty means providing the information that people require to understand something, thereby eliminating their uncertainty. Each dynamic in a video clip delivers a message. The more dynamics there are, the greater the amount of information given. Users can understand unknown elements while scanning the video clip content dynamically and cull through the information to some extent. This helps add clarity to unknown elements (Huadong, 2017; Xu et al., 2019).

5.2

Promotion of Localized Content

Another key driving factor in TikTok’s popularity is that it has a strong focus on localized content despite being a global app. The app often runs local contests and challenges and captures local trends through localized hashtags. TikTok runs the “one million audition” contest across several countries. Participants are given themes to create videos for each contest, and then the top video creators receive awards. This contest leads to the creation of thousands of local videos in each country where it is held and helps TikTok gain local recognition and followers. The app also uses local trending hashtags to suggest topics for content creation to its users. This helps the app capitalize on local trends and generate viral content for the platform. TikTok also sends personalized recommendations to each user. This ensures that TikTok users are updated on the latest trending videos and are constantly supplied ideas for video creation. Using these techniques, TikTok has been able to achieve localization around the world (Influencer Marketing Hub, 2019).

TikTok: How a Chinese Video Clip App …

6

Future Developments

6.1

Current and Future Challenges to Be Overcome at Home and Abroad

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At first glance, TikTok seems to be facing serious external threats. Not only is the wildly popular video clip-sharing app banned in India now but in the United States, it has been forced to be spun off from its Chinese owner ByteDance for political and alleged security reasons (Davis & Aggarwal, 2020). The current and potential challenges for TikTok abroad are notable when we consider that TikTok’s user retention (the percentage of users who return to the app every week) still falls short of Facebook and Instagram. The number of new users has declined since ByteDance ratcheted down the amount of money it is spending on advertising on other social platforms. Moreover, the basic idea of an entertainment app powered by machine learning that shows users fun videos punctuated by ads may ultimately be easy to clone, which is why there is significant venture capital flooding into TikTok competitors at the moment (Newton, 2019). It is also important to note that a growing future challenge to TikTok might be called narrative risk or the likelihood that the company will be unable to overcome shifting public opinion about Chinese-owned apps in the United States. ByteDance CEO Yiming Zhang rarely gives interviews. He has never spoken to an American journalist about TikTok, nor has Vanessa Pappas, the company’s well-respected United States General Manager, who recently joined the company after a long career with YouTube. To date, TikTok employees have been reticent to speak publicly, and it is hard to win a public relations battle from the sidelines. The current popularity of the TikTok app is astonishing, but it still does not guarantee that it will ever reach the levels achieved by other social networks such as Instagram and YouTube. Vine was an extremely popular video-sharing platform at one point in time, but it is now out of the picture. Furthermore, many other apps have risen quickly and then disappeared. To maintain its current popularity, TikTok will have to innovate and find new ways to engage its user base. It will also have to make the platform more marketing-friendly for brands to establish the app as a social network with sustainability. With more brands looking to TikTok to expand their social media marketing reach, TikTok is on the right track. If it can capitalize on brand engagements, it can continue to grow and possibly compete with other social media platforms.

6.2

Current Competitors and in the Future

TikTok faces serious global competition from several social media apps such as Facebook and Instagram. In 2018, TikTok ranked fourth worldwide as the top non-game app downloaded, at 663 million, behind Facebook at 711 million, and its related apps WhatsApp and Messenger (Newton, 2019).

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As regulatory pressure on TikTok grows, so does its current and future competitive pressure. Jack Nicas who is a reporter of the New York Times researched the threats including comments from Mark Zuckerberg’s leaked audio that broke recently (Newton, 2019). These threats include Facebook’s clone, Lasso, a forthcoming Instagram feature called Clips, and an app called Firework that Google is considering buying. There is also an app called Triller, which has already raised USD 28 million in a short time and says it already has 13 million users. There is also the Chinese app VMate, which Alibaba invested USD 100 million into earlier this year. Indeed, all these apps will be competing against TikTok and hinder its growth.

7

Conclusion

In sum, TikTok has been acknowledged as a fun, entertaining, and addictive app that has surged in popularity in the last few months. It also has the potential to become the next big marketing and social networking platform. However, how app creators leverage this potential and maintain the app’s current popularity is yet to be seen.

References Cuofano, G. (2020). TikTok Business Model: The Rise of Creative Social Media Powered By AI. Four Week MBA. https://fourweekmba.com/tiktok-business-model/ Davis, J. (2019). The TikTok Strategy: Using AI Platforms to Take Over the World. Entrepreneurship and Family Enterprise. https://knowledge.insead.edu/entrepreneurship/the-tiktok-strategyusing-ai-platforms-to-take-over-the-world-11776 Davis, J., & Aggarwal, V. (2020). The Innovator’s Imitation Dilemma: TikTok and Facebook in Context. INSEAD Associate Professors of Entrepreneurship and Family Enterprise. https://kno wledge.insead.edu/entrepreneurship/the-innovators-imitation-dilemma-tiktok-and-facebookin-context-14961. Fannin, R. (2019). The Strategy Behind TikTok’s Global Rise. Harvard Business Review, 4. https:// hbr.org/2019/09/the-strategy-behind-tiktoks-global-rise. Huadong, L. (2017). The hidden worries and countermeasures of “social media” information mortuary. China Radio and Television Journal, Vol. 4, pp. 54–57. Influencer Marketing Hub. (2019). Understanding the Impressive Growth of TikTok. https://influe ncermarketinghub.com/understanding-the-impressive-growth-of-tiktok/ Influencer Marketing Hub. (2020). What is TikTok? What you need to know about the new Musical.ly. https://influencermarketinghub.com/what-is-tiktok/ Iqbal, M. (2020). TikTok Revenue and Usage Statistics (2020). Business of Apps. https://www.bus inessofapps.com/data/tik-tok-statistics/ Jiani, W. (2017). "Why is music social Video clip software popular? Take the “TikTok” App as an example. New Media Research, Vol. 3 No. 18, pp. 88–89. Lamare, A. (2019). Meet TikTok Founder Zhang Yiming — And Why The Popular App Is Under National Security Investigation. https://www.yourtango.com/2019329503/who-zhang-yimingtiktok-founder-under-federal-investigation. LOGOS-WORLD.NET, TikTok Logo. (2020). https://logos-world.net/tiktok-logo/

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Newton, C. (2019). The threats against TikTok are beginning to add up. The Verge. https://www. theverge.com/interface/2019/11/5/20947952/tiktok-threats-regulation-competition-pr-chinahearing. Qingguang, G. (2011). Communication Course. Renmin University of China Press. Richards, K. (2020). No TitleLuxury brands go all in on TikTok. Marketing on Platforms. Shpitula, N. (2020). The TikTok Logo: The Meaning behind the Colorful Note. NOGASTER. Xu, L., Yan, X., & Zhang, Z. (2019). Research on the Causes of the “TikTok” App Becoming Popular and the Existing Problems. Journal of Advanced Management Science, Vol. 7 No. 2, pp. 59–63. https://doi.org/10.18178/joams.7.2.59-63 Wei, L. (2017). Development status and countermeasures of Video clip APP. Jiangxi Normal University.

Organization: Entrepreneurship

The entrepreneurial process of Canwangda Establishment of entrepreneurial motivation in cross-border e-commerce Strengthening customer connections in cross-border e-commerce business

The entrepreneurial process of Dr. Fa Biotechnology Identifying the entrepreneurial opportunities from the small earthworms Establishing a green circular economic model for the development of new agricultural industry

The entrepreneurial process of Dongzhi Data Establishment of a patient-centered healthcare model from the perspective of the patient health experience The optimal allocation of entrepreneurial resources in the first two stages of information system implementation

Chasing the Dream: Canwangda’s Journey of Cross-Border E-Commerce Xin Li

1

Introduction

In June 2015, Wang Li and his friends were engaged in a conversation after finishing their final exams as freshmen of Wuxi Vocational Institute of Commerce. During the conversation, one friend told the group, “My mom has helped me get an internship at the family bank this summer.” Another friend said, “I plan on looking online to see if there are any internship opportunities at big companies. What about you, Wang Li?” In answer, Wang Li said, “Ever since I was young, I had a dream of starting my own business. About six months ago, I decided not to look for an internship this summer. Instead, I am going to start my own business and, if successful, I will hire all of you as my employees.” One by one, his friends gave him a thumbs-up. In his first year at the institute, Wang Li had already worked as the secretary and president of the entrepreneurship club, selling box lunches and roses on Valentine’s Day. Yet, he viewed such actions as small-scale and believed that a real business needed to understand its resources and complex external environment to determine its best direction.

2

Refining Ideas, Targeting Cross-Border E-Commerce

As a student from the countryside, Wang Li was not a stereotypically shy kid but instead full of vigor and passion to be an entrepreneur. In July 2015, his institute’s cross-border e-commerce training program quickly triggered his interest. Although the training program was short and simple, it had a lasting impact on Wang Li. X. Li (B) School of Management, Jiangsu University, Zhenjiang, China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Fan et al. (eds.), Casebook of Chinese Business Management, Management for Professionals, https://doi.org/10.1007/978-981-16-8074-8_5

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The program provided him with the idea and opportunity to start a business, and he decided to take the first steps. Through his initial research on the topic, Wang Li noticed that the cross-border e-commerce industry could be considered a “blue ocean”,1 providing a multitude of opportunities with lower initial capital requirements, as company quality varied significantly compared with domestic e-commerce. In August 2015, with some helps from the institute factulties, Wang Li registered his company and opened his first cross-border e-commerce store.

2.1

The Founding Team

In the training program, Wang Li met Can Wang, who showed an interest in starting the business with him. As a freshman, Can Wang, who was majoring in English, had opened a Taobao shop selling Donghai crystal, and had gained experience operating an online storefront. The two became fast friends. As Wang Li explained, “I am a design student and you are an English student, so our skills complement each other. I think this is great!” The two named their company Canwangda Electronic Commerce Co., Ltd. Can Wang oversaw storefront operations, while Wang Li was responsible for website design, advertising, and other aspects pf the business. In the early days of Canwangda’s existence, the store did not sell any brandname items. In addition, Wang Li and Can Wang were still learning how to run a cross-border e-commerce business, However hiring employees effectively was difficult to grasp. Wang Li considered recruiting student-interns from the training program they had attended, as it would be a pool of individuals already interested in cross-border e-commerce and they could cost less. Subsequently, many interns from Canwangda became well-known cross-border e-commerce entrepreneurs. Can Wang said proudly that, “Canwangda’s growth can be attributed to our interns, as these part-timers offered many creative ideas.”

2.2

What Products to Sell

In traditional or cross-border e-commerce, a critical success factor is determining what products to sell, since attracting customers is crucial to progress. In the beginning, Wang Li wanted to use the Taobao crystal sales model Can Wang had already established. Accordingly, Can Wang ordered 5,000 crystals from his hometown for their start-up. After half a month, they did not have a single sale, and the team realized that they needed to reconsider their product selection. They decided to look at what was popular on other cross-border e-commerce sites. After some

1

Blue ocean is an industry term that describes a new market with little competition/ barriers standing in the way of innovators.

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research, they found that luggage sold the best, especially lady’s leather handbags to foreigners. Given the failure of the crystals, the two decided to buy bags and test the market waters to see the outcome. Using his professional design background, Wang Li built a new storefront on par with large brands. After two months, Canwangda finally got its first sale. They realized this was just the beginning of their business.

2.3

Increase Customer Stickiness

A business cannot just sell everything and anything; there is a need to be realistic. For instance, students who want to start a business may not have much start-up capital; hence, they have to put their few available resources into practical use after careful study and consideration. The key to an online storefront’s success is the ability to attract customers, grow sales through quality products, and increase customer connections. After guidance from his professors and some in-depth research, Wang Li decided to expand market in two ways. The first approach was to increase the number of new customers through lower prices and more exposure. Canwangda’s lower prices led to its first group of loyal customers. To increase exposure, Can Wang used methods such as optimizing products to be easily located during a “keyword search” and placing products on the platform’s homepage. The second approach was aimed at increasing interaction with customers. Can Wang used his English abilities to keep in touch with customers and notify them about regular promotional activities. The two also started including small crystals as gifts in each order, gaining praise from those customers and encouraging them to repurchase. With increasing teamwork, Canwangda hit high annual sales with loyal customers in Russia, Brazil, and the United States. The details of annual sales volume and annual sales from 2016 to 2020 are shown in Figs. 1 and 2.

3

Reducing Costs and Improving Quality

Since 2016, many cross-border e-commerce platforms have been popping up, such as Wish, eBay, and Chinabrands. Can Wang explained, “Cross-border e-commerce develops based on the domestic e-commerce market, making it hard for one or two companies to monopolize it. As sellers, we can take advantage of these platforms to further develop the Canwangda brand.” Through its gradual growth, Canwangda’s sales increased from USD 30,000 in its first year to USD 2 million in 2019—but Wang Li noticed that profits were not increasing significantly. Logistics are a large part of cross-border e-commerce, as transportation accounts for more than half the sales price, and reducing logistics costs became a major issue for Canwangda.

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Fig. 1 Annual sales volume from the year 2016-2020. Source: Interview from company

Fig. 2 Annual sales from the year 2016-2020 (U.S. Dollar). Source: Interview from company

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Reducing Logistics Costs

Wang Li found a postal company through the institute and began negotiating delivery costs, while Can Wang formed agreements with other cross-border e-commerce businesses on campus. The plan was to use the company’s scale to negotiate prices for express delivery. With a market potential of USD 10 million per year, the postal and cross-border logistics companies were willing to set up express delivery points near campus to ensure timely delivery of the company’s products. More importantly, it reduced logistics costs for Canwangda and the surrounding cross-border e-commerce companies by almost 30%. Wang Li said, “In recent years, more express companies have begun serving overseas markets, and logistics costs continue to decrease. Both factors provide a prime opportunity for more cross-border e-commerce sales.” Wang Li believed this situation created a new opportunity for the company expansion.

3.2

Broadening Sales Channels

As a result of reduced logistics costs, Canwangda was able to participate in various entrepreneurial competitions in Jiangsu province as a representative of the institute. It won first prize at the city level and second at the provincial level. By receiving unanimous praise and commendations from experts, Canwangda thereby obtaining government support. At the same time, Wang Li and Can Wang faced a new challenge with the rapid development of the cross-border e-commerce sector, causing the need to shift from their low-priced model. The major cross-border e-commerce platforms were switching over to selling products with brands on. The team decided that they needed to broaden their sales channels as well. After a thorough investigation, they identified the most popular products in their current catalog and then collaborated with some luggage companies in Ningbo and Jiaxing, Zhejiang Province. Through this process, they gained official secondary seller status from Chenguang and other brands of stationery goods. Canwangda’s products consist largely of women’s bags and shirts and men’s belts, but stationary sales became a mainstay as well. Today, selling Canwangda has seven stores on three different cross-border e-commerce platforms. It becomes a typical entrepreneur sample in local and provincial campuses. Its success is due to the efforts of Wang Li and Can Wang to keep up with changing times and persistently pursue their vision of cross-border e-commerce.

4

Conclusion

Looking forward, Wang Li and Can Wang plan to stabilize Canwangda’s luggage and stationery sales and identify new products to stock. Additionally, they will focus on stocking popular brands, improving customer satisfaction, and increasing

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overall sales. From a logistics perspective, the team will be investigating overseas warehouses to solve the problem of cross-border e-commerce speed. They will continue to work relentlessly to achieve this.

Can Small Earthworms Bring Big Entrepreneurial Opportunities? Daohai Zhang

1

Introduction

Walking through Dr. Yueping Fa’s earthworm and ecological circulation demonstration park in Yucheng, Shandong Province, we could clearly see the neat rows of three-dimensional planting and breeding greenhouses. There are a total of 75 greenhouses. Tomatoes are planted on both sides of the earthworm cultivation mat in the greenhouse, with no need to use fertilizer or pesticide since the crops are flourishing. The fruits are bright red, and the air is filled with a strong fragrance. Dr. Fa picked a few ripe tomatoes and invited us to taste them (see Fig. 1), “These tomatoes are full of seeds, juice, and fruity aroma. The taste is the same as many years ago when I was only a kid.” According to Dr. Fa, a single greenhouse can produce 10–15 tons of fresh earthworms through different cultivation techniques and investment. In the greenhouse, once earthworms have been raised for about a year, planted vegetables continue to flourish for 2 to 3 years without fertilizer (see Fig. 2). The questions that arise from these observations include: What is the magic of little earthworms? What business opportunities can they bring to agricultural breeding? How can economic benefits be achieved? Is there a replicable business model? With these questions in mind, we could not help but be intrigued by the story of Dr. Fa and these small earthworms.

D. Zhang (B) School of Management, Jiangsu University, Zhenjiang, China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Fan et al. (eds.), Casebook of Chinese Business Management, Management for Professionals, https://doi.org/10.1007/978-981-16-8074-8_6

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Fig. 1 Tomatoes planted by Dr. Fa and her earthworms. Source: Provide by company

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Company Profile

Dr. Fa Biotechnology Co., Ltd. has always been committed to ecological agriculture, insisting on avoiding fertilizer, pesticides, and additives while strongly advocating for naturally cultivated fruits and vegetables that are truly healthy and nutritious. The company’s main business is three-dimensional earthworm cultivation, the deep processing of the developed products, and subsequent sales. It is committed to the agricultural industry, earnestly promotes joint ventures and cooperation with major enterprises and manufacturers, and serves society and users with ideas for industrialization development. The National Institute of Standardization and the China Standards Association gave the “National Research Base for Aquaculture and Deep Processing Standardization” award to the company (see Fig. 3). Within just three years of its establishment, Dr. Fa Biotechnology Co., Ltd. donated funds to build the first standardization laboratory in Dezhou, Shandong Province, known as the Earthworm Standardization Research Center. Since its founding, it has filed six national invention patents and registered five “Dr. Fa” brand trademarks.

3

The State of Agricultural

Today, agricultural production has become heavily dependent on fertilizers and pesticides. To overcome seasonality and grow vegetables year-round, agricultural

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Fig. 2 Dr. Fa and her earthworms. Source: News.cn

film, pesticides, and chemical fertilizers have to be used, which pollute the soil and water bodies. Due to the excessive use of chemical fertilizers and pesticides, soil compaction has occurred. Various pesticides also kill microorganisms in the soil, resulting in a lack of decomposition in the soil and interruption of organic circulation. Currently, there are several independent agricultural product safety supervision departments, such as the Food and Drug Administration, the Bureau of Quality and Technical Supervision, the Industry and Commerce Bureau, the Consumers

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Fig. 3 Research base and laboratory. Source: Photo provide by author

Association, and the Agricultural Management Department. As a result, to some extent, there is a lack of effective communication and an overlap in sampling and risk monitoring that is not shared in a timely manner. As agricultural production is decentralized, this complexity makes it difficult to form a regulatory force with full, effective supervision.

4

Entrepreneurial Inspiration

Although China’s agriculture has continued to develop, the production is still insufficient compared with the population. With the change in the market consumption concept and the improvement in people’s consumption, the public’s call for organic agriculture has broadened and intensified. However, organic agriculture faces two significant problems: difficulty in developing technology and high cost. The goals in this industry have been to develop technology that can achieve low-cost organic agricultural products and green recycling. Dr. Fa’s ideas included producing green organic agricultural products without pesticides and fertilizers, increasing the output of agricultural products while reducing artificial technological interventions, and developing a sustainable organic, ecological chain product through natural forces. The costs involved would drop and there would be no harm to nature. In 2011, when Dr. Fa was a postdoctoral researcher at Shandong University, she became curious about earthworms based on a project she witnessed. After consulting more than 600 papers at home and abroad, she finally recognized the unique “charm” of earthworms and formed an inseparable bond with them. Dr. Fa stated, “Earthworms are industrious underground workers. Their digestive system can secrete various enzymes, quickly decomposing the organic waste they eat into easy-to-use nutrients. After excretion, it becomes sputum, a good organic material. This fertilizer does not only improve the soil and save costs but also increases the harvest.” After careful deliberation coupled with hard work, Dr. Fa decided to invest in agriculture and establish an earthworm industry.

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In 2012, the following extensive research and training, Dr. Fa gained a significant field expertise in earthworms in the Jinan Mountain area. However, she resigned from her work as a project consultant in 2014 and then registered Dr. Fa Biotechnology Co., Ltd in Zibo, Shandong Province to start the business with all of her savings. In 2017, with the support of the Yucheng investment promotion and talent introduction policy, considering that Yucheng has a relatively rich biological industry foundation, she settled Dr. Fa Biotechnology Co., Ltd. in Yucheng. With the help of the local government, she established a breeding area with 800-square meters, including two earthworm breeding workshops and a deep processing laboratory. She built a comprehensive earthworm microbial deep processing system, using the living bodies to develop the active enzyme plant nutrient solution. Recalling the developmental processes at that time, Dr. Fa stated, “It is normal for my team and me to stay up late and work overtime. After consulting several relevant documents and dozens of earthworm industry experts and professors, we carried out the experiment more than 1,000 times. The effort paid off for those who believed and were patient, and the development was successful.”

5

Product Test

From pulling cow dung to supervising farmers to breeding earthworms, Dr. Fa spent long days in the field. Seeing that the field earthworms were getting fatter, merchants who bought earthworms came day in and day out to buy them, but she refused to sell. The village workers were puzzled. One said, “If you do not sell earthworms, you will lose an important source of income.” Sometimes, she could not pay their wages and had to rely on the fees she earned from two days of lectures. Yet, she insisted on not selling the earthworms. The workers did not know the reason. Some even called her a “crazy woman.” According to Dr. Fa who stuck to her beliefs, “From cow dung to earthworm dung, the value increases exponentially. Using earthworm dung to plant wheat, corn, and other crops can increase the yield by more than 10% per mu, but the added value of the deep processing of earthworms is far more than that.” Therefore, the integration of the earthworm culture and planting was adopted at the beginning and experimental agricultural product planting was explored. Dr. Fa and her team insisted on natural farming experiments without herbicides for corn planting. Through her standard planting approach, the cultivated corn roots grew thicker and deeper with stretched root hairs, and the nutrient area was larger. However, her corn stalks saw profitable growth for only two months after the autumn harvest compared with soil with a large number of pesticides, herbicides, and other chemicals. Yet, through earthworm cultivation and active enzyme peptide solution, Dr. Fa’s standardized soil cultivation increased the number of microorganisms significantly and exhibited improved soil activity. In wheat planting, no pesticide or fertilizer was applied during the whole process, and artificial weeding by spraying an active enzyme polypeptide solution was

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carried out three times. The wheat developed in the process had more roots and denser root hairs with more nutrients than common wheat. The wheat ears were also larger and fuller, with higher yields. The results showed that the ground floor gluten content was as high as 38.6%, which was much higher than the national standard of 24%. The quality of the flour reached that of the standard of Italian rye. After successful experimental outcomes, Dr. Fa promoted the planting mode and carried out various product experiments in other provinces. In 2016, the Xi’an Yangling tomato experiment showed that after spraying the polypeptide solution, the plant’s freezing resistance was enhanced, and the fruiting rate increased. However, most of the products were sandy flesh tomatoes and could barely be eaten in the market. After testing, it was found that the active content of the tomatoes contained 29.6% of vitamin C, three times that of ordinary tomatoes. In 2017, the Yantai apple experiment was carried out in the giant village of Huili Town, Fushan District, Yantai City. The experiment compared the fruit trees in the same period with fruit trees using the peptide liquid. The fruit trees cultivated with the peptide liquid had mainly large dark green leaves (no leaf loss or yellow leaves), indicating that these fruit trees accumulated more nutrients. The apples had good shapes, small cores, thin skins, and rich juice. They also had a strong apple flavor, and the trees had an increased yield. As estimated, the apple yield in 2017 was 30% higher than that in 2016. In 2017, a rice experiment was rolled out in Xinping Village, Xiangyin County, Changsha, Hunan Province. The rice sprayed with the peptide liquid flowered 10 days earlier than usual, the effective panicle ratio increased, and they matured approximately one week earlier, with a 20% increase in yield. The average length of the rice panicle sprayed with polypeptide solution was 30–32 cm, while that of ordinary rice panicle was approximately 22 cm, indicating a 50% increase in height. In the same year, the Cucurbita pepo greenhouse experiment was conducted in Ziqiu Town, Pingyi County, and Linyi County in Shandong Province. Three sheds without polypeptide solution spraying were established, and the produce picked every other day. The quantity picked was always between 200 and 300 g. After spraying with the polypeptide solution, 780 g was picked at a visit, and the yield increased by two to threefold. The series of product tests and the experimental results from the cultivations in the different provinces showed that the use of the peptide liquid in place of planting with pesticides significantly improved the quality and yield of the agricultural produce, while retaining significant soil activity without inflicting damage. The earthworm active enzyme polypeptide solution was proved to have excellent promotion value. Currently, the earthworm active enzyme polypeptide solution has become established as an enterprise standard. It has obtained national certification issued by the Accreditation Administration and China National Accreditation Committee’s professional institutions for conformity assessment. As shown in Fig. 4, it has been officially introduced into the market.

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Fig. 4 Enterprise standard and organic product certification. Source: Provide by the company

6

Building an Ecological Chain of Large Agricultural Industries

In 2017, Dr. Fa participated in the “pilot project of comprehensive utilization of straw in Yucheng City.” She applied for RMB 200,000 for poverty alleviation funds, and for five consecutive years used 10% to help poor households out of poverty; 26 poverty alleviation greenhouses were built in the Lunzhen town of Yucheng City, with an annual expenditure of RMB 20,000 for each greenhouse; the earthworm recycling ecological agriculture demonstration park became the National Women’s Poverty Alleviation Demonstration Base with more than twothirds of the employees being local rural women with annual incomes of more than RMB 20,000. In addition, using the technology of the earthworm ecological cycle and agricultural organic waste, such as cow manure and straw (as raw materials), she organized farmers to breed earthworms and improved the utilization of waste through rural development cooperatives. Through the “company + cooperative,” farmers were encouraged to breed earthworms together, and the company purchased the grown fresh earthworms and earthworm casts. Earthworms were processed into a survival enzyme polypeptide solution and then applied to agricultural product planting. Finally, the agricultural products standardized by Dr. Fa were purchased and used in the market.

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Currently, Dr. Fa teaches and encourages farmers in the Lunzhen town of Yucheng to plant organic vegetables with earthworm dung and active enzyme plant nutrient solution to improve farmer income. Simultaneously, she plans to make the agricultural breeding and earthworm deep processing industry the basis and support for ecological experiential tourism. By accelerating the integration of primary, secondary, and tertiary industries, and transforming a town from an earthworm town to an organic town, the town is then transformed and upgraded into a healthy town. In this way, small earthworms can become a large industry and help with rural revitalization.

Big Data Entrepreneurship in Healthcare Daohai Zhang and Mingyue Fan

1

Introduction

Hang Wang, the founder of an online health platform named “Good Doctor”, understands the potential of big data in healthcare from a broadly defined as well as narrowly defined perspective. From the broad perspective, healthcare big data can cover a person’s whole lifecycle, comprising comprehensive information that includes many data points such as health status, body balance, disease prevention and control, food safety, and mental health. From a narrowly defined perspective, healthcare big data can cover the large amount of data collected during the patient’s treatment, including the patient’s disease situation, electronic medical records, medication situation, medical images, and other unique diagnoses and treatment information. From either perspective, healthcare big data is an essential strategic data resource. If used effectively, it can play an essential role in improving healthcare models and promoting societal development. Based on new policy initiatives recently introduced by the “General Office of the State Council of the People’s Republic of China”, supporting a robust national strategy to promote the application of big data in healthcare, many entrepreneurs with relevant medical and big data expertise see new opportunities in the market. Zheng Yao is one of those opportunistic entrepreneurs. In early 2016, Zheng Yao founded the Jiangsu Dongzhi Data Technology Co., Ltd. (Dongzhi Data), headquartered in the Yancheng Big Data Industrial Park. Dongzhi Data Company passed the ISO9001 certification requirements and obtained double soft certification (software enterprise certification and software product certification). The company has become a leading talent enterprise

D. Zhang (B) · M. Fan School of Management, Jiangsu University, Zhenjiang, China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Fan et al. (eds.), Casebook of Chinese Business Management, Management for Professionals, https://doi.org/10.1007/978-981-16-8074-8_7

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in Yancheng and has been selected for inclusion into its software industry development 2.0 plan, presided over by the Jiangsu Economic and Information Commission. The development and innovation of big data in China’s healthcare industry have lagged behind other leading nations to some extent. This raises questions such as: how Zheng Yao found entrepreneurial inspiration to enter the big data healthcare industry, how he navigated the survival period and, how he effectively solved core problems in entrepreneurial management, such as capital introduction, entrepreneurial opportunity identification, talent acquisition, technology, and environment allocation. Zheng Yao returned to China in February 2008 after studying at the University of Nuremberg in Germany. Due to his academic background in healthcare information systems, hardware systems, collaborative software design, and communication system research and development, he was recruited by several medical informatization companies. After careful consideration, he joined Jiangsu Xianlian Information Technology Co., Ltd. a quasi-unicorn enterprise specializing in electronic medical record research and development at that time. He served as its chief engineer, leading the R&D division. During his tenure, he focused on implementing informatization projects at the Jiangsu Provincial People’s Hospital, Nanjing Gulou Hospital, Jiangsu Cancer Hospital, Nanjing Brain Hospital, Nanjing Chest Hospital, and the Kunshan Regional Health Information Platform. All of these brought about considerable operational and economic benefits. This career path laid the foundation for Yao’s development in the field of medical informatization. Through his work in China’s domestic medical and health information industry, he found that foreign health and medical information industries were more advanced while domestically the industry was still in its infancy. Thus, the establishment of national patient-centered healthcare management and services was needed.

2

What Kind of Health Experience Do Patients Need/Get?

“Waiting in line for registration” to see a doctor is a common experience in China. The process of seeing a doctor can be an unpleasant, painful, and even a desperate experience for a patient, and enormous medical expenses have already unsustainable social costs. Through the constant calls for medical reform, access to medical services remains difficult and expensive, along with other practical problems. The essence of medical reform lies in managing people’s health needs and improving medical services. This starts with an understanding of the health experiences of patients. On the one hand, people’s attention to healthcare needs to be explored; on the other, healthcare supply needs to match patient demand. Zheng Yao witnessed first-hand the patients’ frustration with healthcare. His hope was that conversations with doctors could be more insightful, every visit to the doctor more valuable, and symptom/diagnoses more efficient. Today, patients provide a large amount of information during each healthcare visit. However,

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these data can be repetitive and irrelevant, and information collection remains relatively independent across local, regional, and national levels. Zheng Yao believes improvements can be made in managing client information by building an institutional level system, and by collecting the relevant data through a regional platform and refining and reorganizing them into a complete medical and health record. In this way, through the gradual accumulation and reuse of collectible data, the best diagnosis and treatment solution can be modeled. Zheng Yao has become very familiar with the big data healthcare industry’s difficulties and pain points. The industry’s high threshold barrier is why the domestic health information industry has not been unified under single management. From another perspective, it is also an excellent opportunity to start a business. At the beginning of his entrepreneurial pursuit, Zheng Yao was asked why he chose the big data healthcare industry, considering the intense competition that already existed. He responded, “The field of medical and health informatization is like a forest. In this forest, the biggest animal is the elephant, and we are the ‘Jackal.’ In this field, as long as my team is fierce and strong enough, we can live better than the elephant or even eat the elephant.” The metaphor Zheng Yao applied reflected his confidence in navigating and competing in the big data healthcare industry.

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Entrepreneurial Inspiration

Since patient health is critical, and the relevant data of each diagnosis and treatment process is valuable, why not make effective use of this dataset? This is the question that Zheng Yao has been mulling over for years, which eventually sprouted into his entrepreneurial idea. His entrepreneurial inspiration came from his own experiences with technology. The current environment can be likened to an experience economy. In the Internet environment, people have changed from passive to active consumers. Most industry services have changed significantly to provide an interactive experience at a high level through personalization and customized experiences. Zheng Yao said, “The new retail/Internet economy has changed our consumption behavior and consciousness. When I step into a restaurant, my mobile phone will automatically send me a suggestion for ordering. The seller understands my personal preferences and consumption habits and can provide me with my own consumption experience. I can also check-in, book services, and get restaurant recommendations that meet my taste through mobile phone software before arriving at the hotel. After I leave, I receive promotional activities and quotes suitable to attract me to return. This kind of continuous loop of service will attract me to constantly participate in it and feel happy.” Today, in the context of the existing medical experience: Is the national medical service industry a continuous and coherent machine? Are we active participants before, during, and after treatment? Zheng Yao said, “Our entrepreneurial inspiration comes from this. Through big data analysis and application, we can change the healthcare model with doctors as the core, and let patients become the central force managing their health, health network, and health information.” Imagine a

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scenario where clinicians can click on the electronic health record of any patient. Instantly, they can receive diagnosis and treatment suggestions for that patient, using predictive analysis and modeling. This can come from analytics converting a large amount of data, such as doctor prescriptions, laboratory results, and medical images of hundreds of patients, into personalized diagnosis and treatment suggestions. Consider that currently, some hospital blood test reports can be viewed by patients on their mobile phones. In the future, it could be possible for patients to view comprehensive and scientific health and medical information via their mobile phones. Unfortunately, Zheng Yao has found that there is no unified standard for such informatization. With more than 100 software companies providing products/services with differing design concepts and implementation technology, inevitably, the industry has created obstacles for the viability of sharing unified medical service data in the future. As a result, in public health, due to its short development time, large population, and the involvement of many institutions, a corresponding application software and system is needed to perform customization and localization work. Large amounts of data from independent systems have to be collected and summarized to enable the sharing of health information resources, improve the quality and efficiency of health work, save limited health resources, and better serve the public. Zheng Yao started his company to help address these problems, sensing this market potential. Compared with the informatization of other industries, the development of the medical and health industry has the characteristics of slow overall growth, significant differences in segmented fields, lagging standardization, and insufficient development of proprietary technology applications. At the macro level, the big data health industry is one of the most significant hot markets, and its global scale is vast. However, at the micro level, there are many endogenous problems to be solved, and industrial development needs more innovation. It also means that there is a comprehensive healthcare market for Zheng Yao to discover and explore.

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Entrepreneurial Plan

In early 2016, Yancheng in Jiangsu province took the initiative to respond to the big data national strategy and the “Made in China 2025” and “Internet+” action plan. As a result, Yancheng built a big data industrial park (30 km2 ) in its new south district. Yancheng is the only national manufacturing big data high-tech industrialization base. It is also Zheng Yao’s hometown and the starting point of his entrepreneurial journey. Yangcheng’s south district boasts a modern atmosphere, convenient transportation, complete infrastructure, and the agglomeration of finance, science, education, and other industries. In just over three years, the Yancheng Big Data Industrial Park has become the core of the big data industrial layout in Jiangsu province. It has been included in the overall development plan of the Internet economy, cloud computing, and big data industry. It has been recognized by the National Ministry

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of Science and Technology as the only “national manufacturing big data high-tech industrialization base” in the field of big data in China. At present, there are over 230 active enterprises in the park, such as Huawei, Microsoft, Alibaba cloud, 360, Oracle, NetEase, Dongfang Guoxin, Softcom Power, and Guoxin Youyi, including 26 of the world’s top 500 companies. The industrial park also has a dedicated internet communication channel directly connected to Shanghai and is the first big data trading center in East China with more than 5,000 employees. Considering these factors, Zheng Yao chose the Yancheng Big Data Industrial Park as his headquarters. What particularly attracted him was the park’s emphasis on big data. It is also a provincial industrial park with a three-level linkage between provincial and urban areas, an important consideration in his decision. Zheng Yao and his team began by exploring initial tasks to gain insight into the key problems in the healthcare industry. Subsequently, they reshaped those problems into actionable plans/opportunities. Through investigation and analysis, team members identified seven key issues and objectives: (1) (2) (3) (4)

How can the patient’s experience improve? How should patients adhere to a treatment plan? How can more choices be created for patients in the medical system? How can collaboration be encouraged between different medical service providers? (5) How can the effectiveness of medical services be increased? (6) How can the accuracy and efficiency of medical diagnosis be improved? (7) How can a more personalized medical scheme be created? A regional health information platform (health cloud) based on “health records” could provide the best solution to the above questions. The platform would receive data generated by multiple parties, such as individual data, diagnoses and prescriptions issued by doctors, and various data provided by other relevant parties, such as insurance companies. Individuals could choose to add information (such as diet, yoga, WeChat exercise, sleep, travel) to the platform, as well as mastering their health profile with the platform’s help and discovering information about health laws and development trends. “Flowing data” and “insight into the value of data” are the two core values of Dongzhi Data Company. The company is committed to realizing the value-added of customers’ data assets, providing new intelligent systems with data value as the core, and promoting data technology development and application. The overall architecture of big data processing at Dongzhi Data Company is shown in Fig. 1. Under this framework, four core applications were designed: A medical Internet-of-Things (IoT) solution, a hospital information platform solution, a hospital decision support system based on big data analysis, and a regional health information platform. Big data are massive, high-growth, and diversified informational assets that require new processing modes to enable more substantial decision-making power, insight, and process optimization capabilities. Accordingly, there is a need to develop more efficient processing capacities for data

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Fig. 1 Regional health information platform based on “health records. Source: Prepared by case writers. Note HIS (Hospital Information System), LIS (Laboratory Information System), RIS (Radiology Information System), PACS (Picture Archiving and Communication Systems), CHSS (Community Health Service System), SNS (Social Networking Services), LRS (Health Record Service)

acquisition, storage, management, analysis, and even system architecture. For Dongzhi Data company, the strategic significance of big data is not only to acquire enormous amounts of data in the medical and health field, but also to professionally process these meaningful data, improve the “productivity” of said data, and realize the “value-added” of data through “deep processing”. The platform’s fundamental purpose is to form a comprehensive health file so that people (patients) better understand their health and medical information. It is also the basis and core of health management with patients as the central theme. By using this platform, patients not only receive personalized notices, warnings, and reminders but can also share their health cloud with others. They can create a family health cloud, increase their patient autonomy, become active participants in their health, and improve their interactions with doctors, family members, employers, and other relevant parties. As an outcome, everyone is more knowledgeable and proactive.

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The First Stage of Implementation

Within the first three years, 60% of all new businesses fail. Software companies are no exception; hence, this survival period is complicated and full of risk. Dongzhi

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Data company, registered as an IT company, is still navigating through this challenging period. To prevent it from becoming another statistic, the company made a detailed strategic plan to guide itself through the survival period. Based on Zheng Yao’s careful research, part of that strategy was using the Yancheng Big Data Industrial Park location as the company’s headquarters. His extensive industry experience and astute entrepreneurial mindset helped him recognize the problems new enterprises might face in start-up, operation, and development. With those problems in mind, he chose Jiangsu province as his base, and the regional economy, culture, local talent, and technology were taken into consideration. In addition, the core members of his team were all from Jiangsu, making it a logical choice. To determine the final location, he traveled the entire province, studied the pro-business policies of each city, and inspected the environment, supporting facilities, and transportation infrastructure of several information technology parks. Eventually, after careful research and consideration, Yao settled on the Yancheng Big Data Industrial Park. In support of entrepreneurship, the park cooperated, quickly allocating more than 600 square meters of office space and providing the necessary licenses for enterprise operations. SEU Intelligent System Co., Ltd. (“SEU”) is a leading senior enterprise in the industry. To help with financing, at the beginning of 2016, Zheng Yao and his core technology team reached a strategic cooperation agreement with SEU around the idea of a big data healthcare platform. These funds came in the form of a personal angel investment from the chairman of SEU. Such an alliance not only brought sufficient capital, management, and operational experience for Dongzhi Data company, but more importantly, the accumulation of 20 years of industry experience. With both companies’ numerous affiliations with medical and health institutions, the potential for customers and data supported the market development of Dongzhi Data company. As mentioned, the medical and health information market is still in its infancy, although many mature products have been around for decades. Medical and health informatization can be segmented into the two perspectives of medical institutions and population health. Of the two, the informatization development of medical institutions started early, and there are mature products in individual segments. However, there is still a demand for technological innovation and fundamental replacement. Products need sufficient research and development (R&D) and application iterations in many aspects, such as development technology, application mode, network pattern, data planning, data security, storage, disaster recovery technology, and even data and business standardization. Therefore, at the early stages of operation, Dongzhi Data company investigated the local medical and health information environment, communicated with relevant departments at all levels, and explored project opportunities. In terms of talent, while establishing a localized delivery team, the company also used external resources to improve project delivery quality. Regardless of the degree of productization, the medical and health information industry’s project delivery requires significant investment in human resources. Human resources are

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essential because there are many special application scenarios in the initial consultation, mid-term design, and later in the operation of the entire project, which require continuous human intervention to build adaptive systems and product settings. As a result, the company set up localized teams as part of its essential strategic design. Talent acquisition can be a problem for high-tech companies. However, for Dongzhi Data company, the founding team comprised all high-level and experienced industry employees with adequate industry resources in Nanjing, Suzhou, Wuxi, Shanghai, and Beijing. In the early development process, the talent problem was addressed mainly through localized and external resources. Regarding product development, if Dongzhi Data company wants to increase its development, productization is crucial. Even in the survival stage, the company needed to spend human and material resources on project delivery. However, there was a simultaneous need to maintain product design and development of technology R&D, business operations, and the market, as these provide the essential foundation for future growth. In addition, good sample projects were needed to support sales promotion and customer reception. National policy is also crucial and indispensable for the development and growth of technology-based enterprises in China. Dongzhi Data company paid close attention to learning and grasping the government’s policy guidance—from various entrepreneurship and innovation support policies in the initial stage to various science and technology support and intellectual property incentive policies. The company recognized that it needed to study and take advantage of the national policies, as these would provide support for new development.

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The Second Stage of Implementation

For Dongzhi Data company, a solid relationship between the park and local government could provide: • a relaxed basic living environment for the company, • benefits, such as infrastructure development, which would support the company’s profitable growth, • talent attraction • the acquisition of early projects. However, this relationship could not ensure long-term and sustainable company performance. As an IT company, the company was focused on efforts to survive and develop technological innovation along with market growth. By implementing projects early on, the company could build model projects and classic cases, organize and train a delivery team, and continuously improve key indicators such as standardization, productization, and marketization of R&D delivery. To prepare for the growth period after the three-year survival period, from a marketing perspective, sales resources were needed outside of the local area. The

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company needed to make full use of existing external sales resources and quickly duplicate the completed model projects and classic cases. Each year, the company allocated time to research and analyze SEU’s customer resources, explore new customer avenues, and form a sales management team beyond its localization. In terms of technology, activities such as industry-university-research, entrepreneurship, and innovation remained important. On the one hand, these would improve the level of technology application and innovation and help accumulate key intellectual property rights; on the other, they would increase the influence of the enterprises in the industry and exercise and improve the team’s quality. Participation in supporting research projects, the construction of engineering centers at all levels, and intellectual property rights declaration would continue to be carried out. The main operational efforts include: (1) Build model projects, complete product introductions and new product releases, start enterprise qualification and intellectual property declaration, and duplicate regional cases. (2) Enhance the brand and products to complete the qualification of double soft certification and promote the cooperation of industry, university, and research. (3) Build a comprehensive service system for big data platform construction, operation, and maintenance; start the external financing plan, and lead the implementation and integration of the industrial chain. (4) Focus on the domestic market layout, realizing the transformation from products to services, completing the first round of external financing, and promoting the construction of a healthcare big data ecosystem, while implementing a strategy of cutting-edge technology and high-end talent acquisition.

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Conclusion

According to the Mckinseys report of “The ‘big data’ revolution in healthcare” in 2013 the application of big data healthcare in the United States alone can reduce medical expenses by hundreds of billions of dollars yearly. However, in China, due to its large population, serious waste of medical resources, shortages and unreasonable allocation of medical resources, the rapid growth of medical expenditures, and weak development of commercial insurance, among other issues, the application possibilities for healthcare big data are even richer with greater potential for mining. Despite the infancy of Dongzhi Data company, it has already had considerable success. What are its future opportunities and challenges? The company plans to build a domestic first-class big data research institute and launch its own initial public offering (IPO). However, before this, it needs to address two key issues regarding privacy /ethics and security. Customers must grant permission to use their data, and appropriate data storage and security must be ensured. Other key challenges in the future are data processing and management. What data are useful

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and relevant to the company? Extensive clinical and business analysis work still needs to be done. One significant issue to address is the standardization of data. It is imperative to establish a unified national standard for healthcare big data in the long run. However, the current operational situation of medical and health systems in various regions shows that the system is seriously scattered, with no unified standards. This needs to be designed at the top level. Who can give this responsibility to Dongzhi Data company and who can promote this within the industry? As a start-up enterprise, Dongzhi Data company’s future is bright, but it will be a long journey.

Leadership: Humanistic Management

The founder’s entrepreneurial spirit of Dongxin Flowers Establishment of the entrepreneurial mission to develop and harness their entrepreneurial traits A new paradigm of modern urban agriculture

The incentive ways of achieving strong sales performance during pandemic at Shengdu home Strengthening connections with its employees Reorganizing business model and strategy during pandemic while maintaining sales growth Improving human resource management ability during organizational reform at the New Energy Power company Implementing FSSC strategy of preventing staff turnover Analyzing personnel allocation and management of the new department to from the perspective of job evaluation and individual-to-job matching

A Great Florist: The Initial Heart of the Founder of the Dongxin International Flower Company Mingyue Fan and Limin Wang

1

Introduction

On the morning of September 25, 2019, a glittering commemorative medallion entitled “Celebrating the 70th anniversary of the Founding of the People’s Republic of China” was sent to Tianjin Dongxin International Flower Co., Ltd (Dongxin Flowers) (See Fig. 1). The medallion was inlaid with a pattern of “five stars, 70 ribbons, a group brocade knot, and auspicious clouds and light” with red and gold colors. Tieshun Yang, founder of Dongxin International and the potted plant branch of the China Flower Association, accepted it solemnly. On this occasion of the 70th anniversary of the founding of China, he was given this commemorative medal as a recognition for his hard work in the flower industry for more than 30 years and in acknowledgement of his firm’s determination to continue to diversify and move forward despite facing many challenges. As he had finally achieved the status of a great country gardener, the significance of this commemorative medallion was particularly special to him. Behind every success are untold stories and challenges overcome. These achievements and career successes represent China’s progress. The main products of Dongxin Flowers are shown in Fig. 2.

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Developing a Love for Flowers

Tieshun Yang hails from the Dongli District in Tianjin, China. As he remembers it, the ground there was covered with “hoarfrost” all season long. During his time there, he never dreamed that one day he would be surrounded by flowers and be able to enjoy them daily. In 1979, to build a sustainable career, Tieshun Yang M. Fan (B) · L. Wang School of Management, Jiangsu University, Zhenjiang, China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Fan et al. (eds.), Casebook of Chinese Business Management, Management for Professionals, https://doi.org/10.1007/978-981-16-8074-8_8

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Fig. 1 The commemorative medal of celebrating the 70th anniversary of the founding of the People’s Republic of China as the recognition for Tieshun Yang’s hard work in the flower industry for more than 30 years. Source: Provide by company

applied for a course in landscape gardening at the Tianjin Municipal Engineering and Technical School (later merged into the Tianjin Landscape School). His “path of flowers” began once he graduated. Tieshun Yang was part of the first batch of graduates of “professional talent” in the Tianjin landscape gardening field. He was assigned to the flower department of the Tianjin Municipal Bureau of Parks. He recalls that there was not even a single basic flower nursery in the department when he arrived. Later, as the city and some units began to desire to beautify the environment, along with the associated requirements, the flower department went to work. When Yang went to Fujian to

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Fig. 2 Main products of flowers. Source: Dashunhuahui.com

choose his first plant, the sago cycas, something extraordinary happened. Under the initial agreement with the supplier, he contracted for seedlings of sago cycas of 3 cm in diameter at RMB 2.5 per plant. However, when he arrived at the supplier’s facility, he did not see any seedlings but only fine food and wine. Consequently, he lost his temper and demanded to see the seedlings. The supplier led him into the mountains and pointed to the sago cycas blanketing the fields and said, “Carry them away if you want, or go back to Tianjin; if you must get the seedlings, you should wait until we have built the nursery.” The supplier thought this would scare off Tieshun Yang, but he agreed to pick the plants from the field. He said, “I want it all, and I will buy it in tons.” The supplier replied, “Ok, but do not regret it. It is RMB 2500 per ton.” In order to save money, Tieshun Yang struggled for three days to dig out the roots of the sago cycas and pack the plants away. Then, he took them to the railway station by truck. The seedlings were loaded into two carriages with all the seedlings surviving after two months.

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Dropping the “Iron Rice Bowl”

Tieshun Yang envisioned the business opportunities offered by the sago cycas plants. Therefore, he left his government job and started out on his own. To that end, he ran to a deserted mountain of rubbish that stood beside the electric porcelain’s backwall works in Zhanggui Village. He wanted to begin his dream there. The landlord said that, if he could turn the mountain of rubbish into a garden, he would refuse any future payment and would even reward him. “Really?” Tieshun Yang asked many times and then added, “You will not regret this.” After returning home, he sold his motorcycle and borrowed an additional RMB 6000 from

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relatives and friends. He paid the contract fee to the landlord, took the needed equipment to the dump, and prepared the soil over about 20 to 30 acres. He transformed from a civil servant into an entrepreneur planting and selling flowers and plants. In this sense, Tieshun Yang dared to drop the “iron rice bowl” not only because he wanted to pursue his interest in flowers but also because he aspired to independence. Tieshun Yang firmly believed that, based on the growing reform and opening up of society’s wealth, it would be expedient to expand gradually. As national economic development grew, people would have a higher demand for plants and culture in their lives. Through critical analysis, Tieshun Yang foresaw this change as a great movement that would support China’s flower market development. Inevitably, sales in the flower market increased, driven by this phenomenon.

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Explorations and Innovations

Using his talent and partiality for flower management, Tieshun Yang first set up Dashine Garden Decoration Co., Ltd. (Dashine Garden). He focused on marketing average and high-quality flowers. Assessing prevailing competitive conditions and changing market demand, Dashine Garden regularly evaluates its market niche and reshuffles its focus to build its competitive advantage. As such, the company decided to import rare flowers from international markets. Accordingly, Dashine Garden was able to broaden its marketing channels as well as its profit opportunities. In this process, the company pursued a cooperative business model, partnering with international players from developed countries in the flower industry, such as Holland and Belgium. Tieshun Yang concluded that “continuously growing and innovating is the only way Dashine Garden can keep developing and expanding further.” Tieshun Yang found there were drawbacks to importing mature flowers from abroad such as their high cost and short shelf-life. Flowers are finicky, and longdistance transport is disadvantageous. As a result, he adjusted his plans. He would no longer import mature flowers but, rather, would bring in seedlings and then cultivate them in Tianjin to get them ready to sell. In this way, Dashine Garden was able to increase profit margins, position itself to overcome obstacles, and ultimately master the growing techniques. In the end, Dashine Garden could import directly from Holland and other countries specializing in flowers. In Tieshun Yang’s further explorations, he established planting and breeding techniques adapted to China’s national conditions and natural environment. With Tieshun Yang’s knowledge of both domestic and foreign strains in the floral market, his company was able to build an advantage in the domestic market. Dashine Garden’s fundamental operating strategies included continually introducing and developing new varieties and closing the regional market gap. The science and technological strength and market competitiveness of Dashine Garden are reflected in its ability to successfully introduce and domesticate international flower varieties and discover, improve, and market domestic wildflower varieties.

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The company also successfully developed purple azalea from Zhejiang Province into a popular flower product in northern China. It has been the only company to introduce and successfully grow medinilla magnifica in China.

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Technology Promotes Flower Development

Dashine Garden sells only high-quality flowers with the best colors and form compared to similar products on the market. This requires advanced scientific and technological knowledge and the optimization of a modern management system. Tianjin’s climate is suitable for growing high-grade potted flowers in terms of sunshine or daylight span and the temperature difference between day and night. However, these plants are difficult to keep warm in the winter and cool in the summer. Dashine Garden has integrated innovations by deploying double-layer protective film technology along with greenhouse and geothermal development, comprehensive recycling, and geothermal water recharge. It has successfully achieved low-cost annual growing of high-grade potted flowers in northern China. As such, it has successfully translated the disadvantages of the industrial environment into its industrial advantages. The salinity of groundwater and surface water in Tianjin is high, and the trace elements in the water are complex. The several water treatment technologies it deploys can effectively purify water to attain the quality needed. Technology can adjust the content and proportion of trace elements in the water according to the growth characteristics of different flowers and the different stages in the growth cycle. Dozens of nutrient solutions with independent intellectual property rights for different kinds and stages of flower growth have been developed by the company. These water treatment technologies are its trump cards, producing high-quality flowers and acting as a secret weapon in the face of horizontal competition. In addition, Dashine Garden has mastered the micro-mirrored pigment technology with different chromatography. The appropriate technology can promote or postpone the growth of flowers based on different stages in the growth cycle. The micro-mirrored pigment technology, the temperature and humidity control technology, and the nutrient solution and water-treatment technology are all part of the Dashine Garden process. These make up the lean turnaround technology system of producing high-grade potted flowers and strong technical support to control flower quality accurately. During special holidays, such as the Spring Festival, Dashine Garden has been able to force specific flowers to bloom at specific times for such occasions. This can have an influential effect on the market while offering the company additional economic benefits. Moreover, Dashine Garden has successfully achieved factory agriculture. It controls and performs lean management according to its industrial production process. Every aspect of production executes a precise and strict standardized operation. The size of branches and color of flowers and leaves are fairly uniform in the flower stand, which amazes individuals and businesses worldwide. In 2012, the

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“Dashine” brand was recognized as “China’s Famous Brand” by the State Administration of Industry and Commerce; it has also been recognized as a trustworthy brand in the international floral market. Using advanced science and technology, the company has been able to launch new flower products as a first mover and gain a competitive advantage in the market. Its modern management system is optimized to implement lean management processes, effective financial management, and quality control. Apparently, due to its large production and the high quality of its flowers, it has been able to achieve pricing power over similar flower manufacturers in China. Domestic competitors wait for Dashine Garden to release its prices as the flower sales season approaches before determining their own prices. Thus, Dashine Garden plays an active role in the domestic flower market. “One of Dashine Garden’s most important characteristics is that its agricultural production activities are carried out in an industrialized way. Its flowers are not ’planted’ but are instead ‘produced’. Although our product attributes are classified as agriculture, according to the traditional method, they also meet social and personal esthetic demands. Thus, it is not accurate to call Dashine Garden just an agricultural enterprise,” Tieshun Yang stated. He continued, “I think we ought to be considered a scientific and technological enterprise.” Dashine Garden is now a famous, high-tech floral enterprise known worldwide. It has successively applied for 170 national utility model patents with 167 approved and for 198 national invention patents with 83 approved. It has also been recognized as an enterprise in the National Agricultural Science and Technology Park’s core area. Moreover, the company has undertaken some comprehensive national agricultural development projects and built a national engineering laboratory, identified as a leading science and technology giant enterprise in Tianjin.

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Original Mission Creates a Future

In a moderately prosperous society, social group consumption or extensive individual consumption cannot be separated from the pursuit of high-quality culture. Flowers are said to have some material cultural impact due to their beautiful appearance and some spiritual cultural impact due to their inner beauty. This perspective excites Tieshun Yang, because flowers closely match future sociocultural needs as well as his personal interests. “If you maintain a dedicated heart and never give up your belief that anything can be achieved, the ‘craftsman’ can make the best product, and the ‘gardener’ can grow the most beautiful flower.” Tieshun Yang said so. This sentiment also represents the initial motivation of him. To make way for the Airbus 320 project in Tianjin, Dashine Garden rebuilt itself and reorganized and upgraded into Dongxin International Flower Company with Tianjin municipal and Dongli district government support. It expanded its fields 16-fold and aggregated its land to 2.305 km2 . The intelligent 300,000 m2 glass greenhouse was built in the first phase. The greenhouse goes far beyond that of a

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world-class competitive enterprise. When this first phase was put into production, in less than a year of operations, the company’s monthly sales revenue reached 13 million with a net profit margin of 33%. As a result of the new enormous size of the enterprise, the whole construction project remains incomplete. Tieshun Yang has already invested more than RMB 1.7 billion, including RMB 700 million loan. Notably, one of its current challenges is funding, and the other is the ability to expand, a no-win situation. What should Tieshun Yang do next to continue to achieve his initial mission?

Shengdu Home Furnishings Co., Ltd.: A Hero Walks Against the Wind Hua Cheng

1

Introduction

In January 2020, as is often the case in China at this time of year, millions of people packed trains, planes, and highways, homeward bound to celebrate the New Year with their families, friends, and relatives. This time, however, the world’s largest yearly human migration coincided with the outbreak of a new type of coronavirus (COVID-19) that was quickly spreading, first in the city of Wuhan, where the first case was identified, and then across the country, mainly through crowds. Alarmed by the spread of the new virus, health departments across the country imposed new rules to prevent it from disseminating further. On January 23, 2020, authorities from Wuhan imposed a total “lockdown of the city”. Other cities in Hubei Province also announced similar measures. Soon, the country’s authorities called on their citizens to avoid nonessential travel to prevent the spread of the virus. As the number of infections and deaths increased, many people began to panic and looked to escape the affected areas. However, others, in the middle of widespread panic, decided to help curtail the virus and support frontline workers. These heroes included medical teams rushing to the affected areas as well as many companies and organizations such as Shengdu Home Furnishings Co., Ltd. (Shengdu). Indeed, during the epidemic, Shengdu rushed to provide assistance to those affected as well as use the opportunity to reform its business model, which led to excellent sales performance during this time.

H. Cheng (B) School of Management, Jiangsu University, Zhenjiang, China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Fan et al. (eds.), Casebook of Chinese Business Management, Management for Professionals, https://doi.org/10.1007/978-981-16-8074-8_9

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Supporting Wuhan

During the Spring Festival of 2020, while many Shengdu employees exchanged New Year wishes and greetings on the company’s WeChat group—China’s online communication platform—most discussions increasingly turned to COVID-19 and its damaging effects. News reports, information, and anecdotes shared in the company’s WeChat group focused on COVID-19 with many employees feeling helpless, hopeless, anxious, and pessimistic about the future. Among the employee concerns were what the company could do as it faced the pandemic and what they could do to help those in dire need. In response, on January 27, the management of Shengdu organized a fundraising drive to “fight the epidemic and rush to Wuhan”. There was no mandatory requirement since employees were asked to participate voluntarily. Unexpectedly, more than 4,000 employees participated in just one day, and total donations reached RMB 510,000. While this was no small feat, it became evident that the immediate needs in the affected areas were supplies, not cash. How could the funds raised be used to better help in the affected areas? This issue became a hot topic among the Shengdu staff in discussions on WeChat. Some employees suggested purchasing medical supplies such as medical-surgical masks and protective clothing. However, this suggestion was quickly rejected because well-informed employees knew that such medical supplies were in short supply and difficult to purchase. An employee whose family worked at the Zhongnan Hospital of Wuhan University informed Shengdu and staff members that the hospital lacked medical supplies as well as civilian supplies. Therefore, a decision was made to purchase and deliver civilian materials to support Wuhan University Zhongnan Hospital. First, Yulin Ma, assistant to the Wuhan branch’s general manager, contacted Zhongnan Hospital of Wuhan University and asked the hospital to list all the urgently needed non-medical supplies. After the list was passed to the headquarters of Shengdu, the group administration department immediately mobilized employees to discover where they could purchase those products. This was not an easy task, not only because of the Spring Festival holidays, but also because of the travel restrictions during the pandemic. However, employees demonstrated their ingenuity and resourcefulness by finding and sharing vital information on various supplies. In addition to the materials listed, some employees suggested that the company purchase 2,000 bottles of ginseng, a popular herbal remedy believed to enhance wellbeing, to help frontline medical staff improve their immunity and resistance. The next challenge was to deliver the materials to the Zhongnan Hospital. Once again, Shengdu relied on its employees’ generosity and resourcefulness. Its decorating department issued a “Volunteer Recruitment Order” in the employee WeChat group. Within a few minutes, five employees had signed up, including the Wuhan branch general assistant manager Yulin Ma, the finance manager Shuang Lu, the home improvement consultants Yifan Yue and Xiaolong Wan, and the designer Yang Zhang. More people continued to sign up. On the evening of January 28,

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the volunteers formed a “Rescue Team” tasked with assisting Wuhan. All materials worth 1 million were handed over to frontline staff. It took four days for Shengdu employees to move from preplanning and planning to final delivery of the materials to Wuhan Zhongnan Hospital. Importantly, the “Rescue Team” kept colleagues updated by sharing on the WeChat group various photos of the entire operation from packaging to the delivery of the material donated. In this way, employees were able to track the entire process on a day-to-day basis. Most, if not all, were impressed by the ingenuity and innovative aspects of the system. Talking about the process, some commented on the company’s WeChat page, saying, for example, “Our rescue operation this time is so cool!” “I feel sublime”, and “Our sanctuary is great”. These comments confirmed the extent of employee emotional involvement in the process. Importantly, customers of Shengdu also got wind of the entire operation through their friends and praised and supported it. Many commented on the efficacy, trustworthiness, and reliability of the decorating branch. While the operation’s success boosted Shengdu’s employees’ morale, another challenge was how to return to work after the holiday. Indeed, the Public Health Department had called for the reduction of nonessential movement, adding that “staying at home is patriotic.” Many companies across the country were put on hold, and employees were encouraged to work from home. This meant that companies such as Shengdu, whose entire business model of traditional home improvement required a physical presence, could not work during the pandemic. As a result, companies like Shengdu had to adopt many measures to reduce company costs such as reducing employee salaries and enacting layoffs. Shengdu’s retail business and decoration projects were also temporarily on hold, and employees panicked. Their chief concerns were whether and how long the company could last and whether there was any guarantee of their jobs and income. As concerns mounted, Shengdu’s employees attempted to remain resilient and proposed new initiatives to prevent the company from “stalling because of the epidemic”. As an employee noted in the company’s WeChat group, “We must find a way to keep on working,” and “We must act!” The management of Shengdu acknowledged these concerns and launched a large discussion on how to resume work under the epidemic in the WeChat group.

3

Promoting Reform

By February 2020, most offline business activities and industrial and commercial enterprises across the country had put a hold on their activities to avoid spreading the virus. However, the discussion among the staff of Shengdu was very lively and informative. Many commented that, “During the pandemic, the only option is to use the Internet to work.” Others added, “We must change to an online office mode,” and “All departments should now find ways to use the Internet first to do what they can do.”

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Following many discussions with employees, Shengdu management suggested two ways to adapt to the pandemic. The first was to change its sales model from its original offline sales-based model to an online sales-based model. The second was to change its operational mode from its original offline office mode to a networked office mode. To reassure people and ensure the smooth implementation of these reforms, Shengdu’s management put in place a number of incentives: 1. It kept its original basic salaries for employees. 2. It introduced new sales incentive policies. 3. It provided guidance for how employees could cope with the pandemic. At the same time, to support employee morale, it set a sales target of achieving 2,500 signed contracts in February. In line with this sales target, Shengdu also launched the group’s unified “New Spring Special Exhibition and Cloud Decoration Group Buying Meeting.” The event stipulated that, every time a customer signed an order, Shengdu would donate RMB 200 to the Red Cross Epidemic Prevention Fund.

4

Sales Model Reform: Transforming from Offline to Online Sales

How can an online sales model be developed and implemented? To achieve this goal, Shengdu relied on the experience of Weiyang Yan, Chairman of Shengdu Decoration Co., Ltd., another branch of Shengdu. Weiyang Yan had some experience in online sales and marketing. In 2019, Yan had opened an official account on WeChat where customers could directly interact with him, leaving messages and complaints and placing orders. Yan also opened the “Laoyan Live Room” on platforms such as Blue TV, Like Listening, Fangtianxia, Taobao, and JD. He held live streaming in which he talked to customers about different services he offered and gave tips on decorating. Through these, he received many orders which encouraged him to try online sales instead of offline sales. Under the pandemic situation. With people stayed at home, more and more employees were encouraged to discuss and explore online sales models in various customer groups. Designers and various business units were the initial force in the company’s sales. Indeed, to carry out online sales, each business department quickly organized training sessions, primarily for designers and salespeople, to acquaint them with online live streaming methods. Yan also summed up his own online sales experience and shared it with employees. Things became better and better. There were more and more designers started to open channels for live streaming. However, the increase of online sales is not based only on having a wide network of customers. It requires extensive behind-the-scenes efforts, and those with experience shared the intricacies of building and managing an online sales platform. This enabled newcomers to the online sales model to master how it functioned. Soon, the business departments selected designers with solid reputations,

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strong eloquence, and the right image to serve as their “Internet celebrity designer” on their online platforms. Simultaneously, other employees worked together behind the scenes to support online sales. Yan Wang, the designer of the Shengdu Decoration Xiaoshan Branch, was selected as Shengdu’s “Internet celebrity designer.” Yan Wang quickly set a record. He managed to have over 50,000 people watch his broadcast on the online platform Fangtianxia. For example, a session titled “What kind of decorating company is a good one?” explained to the audience how to choose a reliable company based on several criteria such as the quality of materials, design, construction, and management. In addition to his daily work, Yan Wang’s team hosted a live streaming once a week. This included face-to-face communication with a single customer and instant online communication with hundreds of customers. The popularity of these sessions increased rapidly, and the effect of one-to-many communication was generally positive. Furthermore, the company’s sales incentive policy attracted employees from non-sales departments. They, in turn, used WeChat and WeChat Moments to recommend Shengdu products and services to their relatives, friends, and acquaintances. However, not everything went smoothly as some employees lacked expertise, particularly those in non-sales departments. For example, customers complained of the “information bombardment” caused by excessive sharing of a large amount of marketing information through WeChat, including various packages and design cases. After receiving some customer complaints, Shengdu management responded quickly, summarized the lessons, and issued new guidance to their employees on customer contact fundamentals, emphasizing “four steps”: listening to recordings, recommending instructions, passing information, and returning calls. First, after reaching out to customers, the staff was asked to take detailed notes regarding customer requirements and expectations for the decorating process by listening to them patiently. Second, with the customer’s permission, employees then needed to recommend products and services in a targeted manner according to customer requirements. Employees were asked to explain these products and services in detail and then send relevant information only when needed and requested. Significantly, all customer interactions needed to be based on a tacit agreement between the customer and the salesperson; for example, the recommended products should be exactly what the customer asked for. After the recommendation, employees needed to arrange a time for future contact. Finally, employees were asked to visit customers virtually at an agreed time to understand their decision-making intentions further. To facilitate the recommendation of products and services to customers in a targeted manner, the company also organized and coded the decorating packages and information on various products and services. Under the guidance of the company’s incentive policies and regulation, many employees in non-sales positions also achieved outstanding sales results and increased their incomes. For example, the seven members of the administrative management center used WeChat to promote Shengdu’s New Year decorating package to their friends and completed 23 presale orders in only 17 days.

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One project manager mobilized his family and children to advertise Shengdu’s products. He completed 21 presale orders by his own. The next phase was how to complete the decorating contracts. Shengdu used its “Cloud Decoration SaaS System”, an independently developed system designed in 2018. The system’s features included online registration, viewing of decorating plans, budgeting, selection of materials, and contract signing. It typically worked as follows. After a customer scanned the quick response (QR) code on an item, the system automatically set up the process of determining the decorating plans and the signing of the contract. From February 1 to 11, with the combined help of WeChat Moments, online live broadcasts, and the Cloud Decoration SaaS System, Shengdu employees reached the sales milestone of 2,521 orders. It took less than half of the original timeline to meet and exceed the target. Following the sales activities, the company provided the first payment to the Hangzhou Red Cross Epidemic Prevention Fund with a special donation of RMB 500,000. These sales results again motivated the staff. The employees were excited by the large sales results and proud of the company’s active fulfillment of its promises during the pandemic.

5

Office Model Transformation: From Offline Office to Networked Office Model

Although many people were increasingly concerned about the pandemic’s negative effects, including the economic downturn, news of corporate layoffs, and business closures, since February 1, as Shengdu had organized its employees to conduct their work online, this relieved the isolation employees were feeling at home. The employees responded positively to the online office environment, and the online office also invigorated employees. Employee online groups were quickly filled with information, notices, and even jokes. However, after a few days, everyone found that this approach was a little messy as well. Employees were receiving hundreds of new unread messages in the groups. As a result, finding important information was like finding a needle in a haystack. Consequently, employees were unable to work efficiently and were worried about the situation. This creative chaos made many employees feel anxious and find working at home more tiring than working at the office. The management of Shengdu also realized that changing from an offline to an online office was not as simple as using online instead of face-to-face communication. The sharing of information and materials, team collaboration, and communication were all very different in the online office environment. In light of this, the question was how to improve the efficiency and quality of the networked office. The management at Shengdu’s headquarters and various business divisions held multiple meetings for this purpose, opened a green channel for employee suggestions, and arranged for the administration department to be responsible for receiving and providing feedback. If an employee’s suggestions was adopted, he/she would receive public recognition and reward. After a period

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of exploration, Shengdu refined and summarized the experiences of developing a networked office. First, the company established various employee communication groups and work notification groups at all levels. Due to the inability to communicate faceto-face during the epidemic, many messages were communicated through WeChat groups. However, some important notices were overlooked among the excessive number of messages and the variety of information being shared. Therefore, as of February 2, the Shengdu headquarters and national branches established employee exchange groups and work notification groups at all levels to separate the information. The work notification groups only published information such as meeting notices, company notices, business department work arrangements, and meeting minutes while other information and employee discussions were conducted in the exchange groups to avoid of missing important information. Second, the company established regular networking meetings to promote team communication. To arrange work time appropriately and based on an understanding of the employees’ situations, many departments formed a system of regular departmental network meetings at 8:30 in the morning or 5:30 in the afternoon. The department managers hosted the regular networking meetings, and all department employees attended. All employees took turns speaking. When time permitted, employees could speak about things in their homes or communities as well. This daily regular networking meeting alleviated employee anxiety during this period of isolation and promoted better communication within the departments. Third, the company looked for ways to improve the modes of communication and meeting efficiency. During the epidemic, all branches and departments of Shengdu adopted video tools such as Dingding and Voov Meeting. There were 20 video meetings in February with more than 1,000 attendees, more than 100 management meetings, and more than 100 business meetings. To save time, Shengdu’s business meetings encouraged specific modes of speaking when sharing issues— for example, through statements such as, “For the XX project, what I have learned is…; my feeling or evaluation is…; my opinion or suggestion is….” Attendees spoke briefly and reduced greetings and social language. When there was a dispute, the meeting host would arrange for the disputing parties to speak in turns before making a decision or coming to a conclusion. Necessary video conference arrangements included an administrative secretary to take shorthand notes on the speeches and meeting decisions. Once the participants were confirmed and the meeting minutes were classified according to time and event and posted to the relevant work notification group, employees could review them. The approach improved meeting efficiency, and disputes were reduced significantly. In addition, to boost employee morale, the Shengdu administration department published the company’s previous day sales results daily in the employee exchange group to show that the pandemic had not stopped the company’s development. Simultaneously, the administrative department interviewed individuals and teams who achieved outstanding sales results during the pandemic, summarized their

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experiences, and wrote and published them on the company’s internal network forums for all employees to learn from. After the above practices had been implemented, working conditions quickly changed from feeling chaotic and disorderly to feeling coordinated and orderly. The improvement in the communication modes also effectively improved the efficiency and the quality of work. In the words of Chairman Weiyang Yan, “What we used to do in one day, we can now do in one hour.”

6

Conclusion

During the pandemic, Shengdu successfully supported Wuhan while achieving sales milestones by transforming its business model. As of February 29, Shengdu had confirmed a total of 5,444 presale orders. At the same time, in addition to the early aid materials and donations, each branch donated masks and other materials valued at RMB 600,000 to the city. More than RMB 2 million had been donated. In the future, Shengdu will face many challenges, such as dealing with the restrictions on the flow of materials under special circumstances and how to complete signed orders as soon as possible. However, no matter what difficulties lie ahead, Shengdu’s employees are confident that the company can overcome them.

Person and Job Matching in the Newly Established Department of a New Energy Power Company Jingzhao Yang and Jing Wu

1

Introduction

After New Year’s Day 2019, manager Gong of the Finance Department of the branches of China Nuclear Power Engineering Co., Ltd (NP company) began work. Chen, manager of the Human Resources Department, called him and asked if they could talk. Gong guessed that Zhu, who was in charge of the operations of Financial Shared Service Center (FSSC), had recently submitted his resignation to the Human Resources Department. Manager Gong sighed inwardly, thinking, “This is the sixth information manager who has applied for a transfer since the establishment of the FSSC in 2016.” The FSSC, which had been operating for less than two years, was facing the dilemma of a talent shortage. Since the NP company began to build the FSSC in 2016, there had been staff turnover. Almost every year, one or two information personnel had resigned or applied for a job change. The turnover rate of information personnel was 12% and 20% in 2016 and 2017, respectively, and there had been resignations or active requests for a position change every year. The Center was a brand new facility in NP company, encompassing big-data management requirements. Although the absolute number of personnel changes had not been large, the changes were profoundly impacting information and data management development. The information personnel (especially the shared operations section members) in the Center were not stable. Since 2016, information personnel had quit or requested position changes. As a result, the personnel engaged in the work for only a short time. This was directly affecting the maintenance and improvement of the financial sharing system, which encompassed the implementation of the tax

J. Yang (B) · J. Wu School of Management, Jiangsu University, Zhenjiang, China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Fan et al. (eds.), Casebook of Chinese Business Management, Management for Professionals, https://doi.org/10.1007/978-981-16-8074-8_10

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sharing, the integrated development of engineering materials, the integrated development of business travel, the integrated development of the engineering budget, and other business modules expected to be completed at a later stage. However, due to the limitation of the quantity and quality of the employed information personnel, further module development could not be supported currently. As a result of personnel position changes, FSSC information personnel appear to be “understanding—knowing—leaving” in an endless cycle. The Center requires highly intelligent personnel with professional qualities that include information management, financial knowledge, and work experience. Particularly, for new employees, there is a long working cycle from simple maintenance of the system to becoming familiar with the system’s functions and processes before employees can offer constructive management opinions. The reasons behind the resignations are similar. Most of these employees feel that their operating ability and future career development plan do not match the FSSC work content and quality requirements. Manager Gong thought that he needed to discuss with Manager Chen the following questions. What should they do about the company’s FSSC positions? How should they evaluate these new jobs? Moreover, they needed to determine the personnel quality requirements and abilities needed in the FSSC. Otherwise, the existing staff would feel uneasy and unable to cope, which would affect the operational efficiency of the whole FSSC. When the FSSC was put into operation, there were 21 people in total while the standard configuration was 28 people (Table 1). This smaller number of people meant that the company’s Center was far from meeting standard configuration requirements. In their situation, one individual handled several jobs. Manager Chen looked at the table and created a chart in Excel to check the proportion of personnel allocation in each section (see Fig. 3). While looking at this chart, Chen realized that the largest number of people in the Center were in the financial accounting and fund management sections. Nearly 50% of the total staff in these sections aligned with the current construction task. Table 1 Personnel configuration of each section of the FSSC of the NP company. Section

Standard configuration number

Actual number

Director of Finance Department/Director of FSSC

2

2

Financial accounting section

10

9

Money management section

4

4

Investment and financing management section

3

2

Tax section

3

3

Budget section

3

2

Sharing operation section

3

2

28

21

Total Source: Interview with company

Remark

2 part-time

1 part-time

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Fig. 1 Personnel allocation ratio of each section of the FSSC of NP company. Source: Interview with company

At its launch, the FSSC’s operation was already overloaded and shouldered the heavy responsibility of big data management for the company. Subsequently, if one person left, some work would need to be suspended. How could this problem be addressed? Chen considered the year-end summary and the statistical table he had made of the staff turnover of the FSSC from the research stage in 2014 to 2018. He immediately pulled it out and began to study it. From the beginning of the year 2014, the turnover rate of the FSSC was high in the nearly five years, particularly in 2016 and 2017, at about 20%. From the analysis of the outflow of staff, intermediate professional titles accounted for 70% of the total outflow with an average age of about 30 years. Due to the influence of career, family, and other factors, there was a high probability of resignation among the men. Simultaneously, with most women wanting stable jobs and taking fewer risks, their resignation probability was low. Additionally, undergraduate and master’s degree students were among the main departures. As shown in Table 2, the total number of recruits in the past five years was 20. Campus recruitment accounted for nearly 80% of the number. Restricted by the company’s policies, college students recruited on campus had low starting salaries. However, they generally agreed with the company’s corporate culture and showed a willingness to work hard. Due to their lack of practical experience, the company needed to have patience and pay attention to training. This was not easy to manage as most students felt a strong sense of self-worth and little constraint from workplace rules. After three or four years, student turnover probability was high. The result was a break in the management of team balance as well as the creation of other weaknesses. Since the construction of the FSSC was a vital project for the company, it attached importance to talent management. The beginning of the process required that the organization and jobs matched the Center’s construction progress. With

2014

2015

2016

2017

2018

1

2

3

4

5

21

21

23

25

23

Number of employed persons

Source: Interview with company

Year

Serial number

3

4

2

2

4

1

2

1

–

–

3

6

5

4

2

Two had intermediate professional titles and an average age of 30 and had been engaged in financial work for more than six years

Four had intermediate professional titles and an average age of 30 and had been engaged in financial work for more than six years

Three had intermediate professional titles and an average age of 30 and had been engaged in financial work for more than six years

Three had intermediate professional titles and an average age of 29 and had been engaged in financial work for more than six years

All had intermediate professional titles and an average age of 29 and had been engaged in financial work for more than five years

Basic information of personnel

Number

campus recruitment

Social recruitment

Loss of personnel

Recruitment

Table 2 The personnel changes of the FSSC of NP company from 2014 to 2018

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the gradual expansion and improvement of the process, adjustments were made. In the case of fewer staff in the Center, one person handled more jobs even though the jobs may have been incompatible. This approach was implemented to try to cover all the business of the Center. In terms of the capabilities of the information personnel, versatile talent was needed, namely, personnel who understood both computers and finance. However, young individuals continually asked to leave, resigned, or requested transfers to other departments shortly after starting work in the Center. These individuals had business knowledge and practical experience and were in the golden age of their careers. They also had crucial talent coveted by FSSC. Chen thought about the establishment of a new approach; from the Human Resource Management Department to the actual functional departments and staff, everyone needed to be re-educated about the positions as this matter was not just about the resignations. He mused that he needed to talk to the financial manager Gong and the information staff at the Center about whether a job analysis was needed.

2

Data Management Reform in the FSSC of NP Company

NP company is a high-tech enterprise engaged mainly in nuclear power engineering. At present, it is responsible for the AP1000 autonomy of the third generation of nuclear power, relying on the project Sanmen, Haiyang 4 units, and the national major special CAP1400 demonstration project and subsequent units.

2.1

Difficulties and Exploration of NP Company Data Management

NP company has been paying attention to the development of management information since its initial establishment. It has invested a large sum of money every year to build an advanced independent management information platform based on its management information system. The software system used covers the company’s operation management, schedule management, safety management, power plant design, power plant commissioning, and other aspects, such as the Kingdee financial system, contract management system based on project information portal (PIP), Kingdee human resources system, Ufida asset management system, and the Hexagon project schedule control system. With the continuous expansion of the company’s information levels, the development of data centers and management information systems in various departments and multi-data and multi-department management systems has run counter to the original expectation of unified management of big data. This has resulted in a series of drawbacks; the degree of integration between business departments is low, the company information caliber of data differs, and coordination is increasingly difficult.

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For financial information, each branch/project department’s organizational structure is similar to the others, and the homogenization of business activities, mainly financial functions, is critical. Branch/project finance is expected to handle essential accounting activities, such as reimbursements, and high-end financial management activities, such as overall tax planning and full-cycle project budgets. It is challenging to maintain high-end financial management, such as fund management, cost control, supervision, and management, which increase project financial control difficulties. In 2016, to align with the financial management positioning of “value creation, service strategy, risk control, and information authenticity,” NP company gradually established its regional FSSC. To manage the importance of the company’s primary data, the urgency of its business processes and close contact with employees, and the urgency of risk control, the company planned the construction of this FSSC in three phases. The first phase mainly included establishing primary data, reimbursement, bank-enterprise interconnections, and the “Cloud Home” mobile phone app. The second phase included project material management, project budget management, and tax and enterprise interconnection. The third phase included mainly optimization of the previous system, data fusion and coordinated management, and reducing the management costs. The company spent nearly seven months completing the first-phase projects of the FSSC. The purpose of building the FSSC was to realize the integration and collaboration of company data resources by establishing interfaces among multiple systems such as the contract system, the material system, the integrated office system, and the human resource system. Such integration would upgrade the company’s quality in terms of financial management, risk control, and value creation. By establishing the FSSC, NP company could centralize each branch/project department’s accounting activity, reduce the branch/project department’s workload, and facilitate the refinement of financial work toward the “integration of business and finance”. Simultaneously, unified audit standards could be designed and implemented in each branch/project department to facilitate the system’s effective implementation and management.

2.2

NP Company Profile and Functions of the FSSC

NP company announced the official opening of the FSSC by holding a launch conference. The Center was based on a four-layer system architecture: the platform layer (workflow engine, rights management, quick response (QR) code technology, early warning platform, task pools), the operational management layer (shared operating, shared configuration, image scanning), the core business layer (expenses, accrual basis, financial statements, budget management), and the application layer (performance statistics, corporate control, business operation analysis). According to the functional design, the responsible personnel would be different for the different levels, namely, information personnel, specific business section personnel, and Center leadership.

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Professionals in each business section would handle the sorting of business processes and decision making for approval. Therefore, the information personnel would only play coordinating roles, especially in making suggestions for node approval decisions. In the system configuration stage, information personnel had essential computer programming abilities so they could play specific roles in supervising the development progress and node configuration of software system programmers. After developing the financial sharing system, the information personnel would be fully responsible for the testers’ organization, division of labor, test methods, and test progress.

3

Position Setting in the FSSC

3.1

Organizational Management of the Company

NP company is administratively organized according to the executive director responsibility system. The company is organized based on functional department (Office, Human Resources Department, Finance Department, Plan and Project Management Department, Safety and Quality Department, Business and Expense Management Department, Discipline Inspection and Supervision Department, Internal Audit Control Department, Party and Mass Work Department, Overseas Business Department), the business center (design consulting management center, procurement center, construction center, commissioning center), branch/project department (Sanmen branch, Haiyang branch, Rongcheng branch, Lufeng branch, Lianjiang branch, Bailong project department, project preparation office), and three categories of classified management. It follows the project operations approach of “standardization, intensification, matrix type and project system.” The functional departments and business center act as the “backstage,” and the project departments (front desk) carry out the “front and backstage” operations of the projects. The company has established a y-type hierarchical channel of responsibility (Fig. 2). This is created by combining a management channel and a technology channel to establish categories of management and technology positions for employees at the supervisor level as well as the capability requirements and quality requirements for all levels, except those of the leadership of the company.

3.2

The Central Organizational Structure of the FSSC

The FSSC of NP company falls under the financial department and is an essential institution of that department. The detailed position allocation chart is shown in (Fig. 3). FSSC is divided into six sections: financial accounting, fund management, investment and financing management, tax, budget, and shared operations.

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Fig. 2 Staff chart of NP company. Source: Interview with company

According to the business situation of the FSSC, it should have a standard configuration of 28 people. The financial accounting section is divided into two sections due to the heavy workload of expense audits and accounting. The person in charge of each section is a section manager at a manager level, who is at the same level as the section manager directly under the Financial Department and the financial manager of each branch/project department. The heads of the management institutions at all levels of the Financial Department (including six sections of the FSSC) are all at the same level and are the responsible persons for these management institutions. They are responsible for coordinating, organizing, promoting, and inspecting the average performance of the institutions’ activities; reporting to direct superiors; and cultivating subordinate employees of the management institutions. The number of information personnel in the shared operation section is fixed. When information personnel are promoted from a lower position to a corresponding higher position, no additional information personnel are added to the lower position. Therefore, there are no specific titles for headquarters’ operation finance and the division’s operation finance in this section beyond the operations manager position.

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Fig. 3 Organization chart of the finance department of NP company. Source: Interview with company

4

Human Resource Management Challenges Faced by the FSSC

4.1

The External Labor Market is a Buyer’s Market

The rapid development of the FSSC has led to a surge in demand for experienced personnel. However, it usually takes three years to train an experienced Center staff member (comprehensive capabilities in information technology (IT), finance, business, and internal control knowledge). Therefore, qualified personnel cannot be supplied quickly in the short term. There are few experienced financial personnel who have participated in the construction of financial sharing in the human resources market. This makes it challenging to meet the needs of the FSSC enterprise. It also increases salary prices and triggers the resignation of employees in the Center.

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Position Value of FSSC Staff

We can look at the information operation supervisor of the FSSC of the NP company as an example to illustrate the job’s value. The job requires a high level of technical expertise and communication skills. Furthermore, the individual needs to communicate with relevant departments and software developers, having a wide range of contact areas and coordination responsibility. Therefore, in terms of interpersonal skills, the information operation supervisor should be able to interpret the requirements of others and clearly respond to technology requests that cannot be implemented in the development process, making the individual’s communication skills particularly essential. Regarding problem-solving ability, the information operation supervisor is required to follow financial laws and regulations in process development. Concerning responsibility, the information operation supervisor has certain freedom while the operation manager guides his/her work. A financial sharing system plays a role mainly in financial control, reducing management costs, and providing data support for businesses. Although the system has a direct impact on the further development of enterprise management, it is generally auxiliary. Therefore, the FSSC specializes in the division of labor in financial work. The person in charge of each project must be proficient in professional knowledge in the field. Simultaneously, the staff should be able to solve complex affairs in the field independently and communicate with internal and external personnel. The financial sharing system can play a management role in terms of internal control, data support, and other aspects. By the end of 2018, the FSSC staff in the NP company was less than 80% of the standard allocation. This implies that company leadership did not attach enough importance to the Center and did not fully recognize the value of the Center’s staff.

4.3

Performance Appraisal of the FSSC

NP company has adopted the key performance indicator method, which has certain advantages over the objectives and key results performance management model. These are embodied in clearer goals, the concept of customer value, and the agreement between organizational interests and individual interests to achieve a win–win situation. However, in practice, the performance appraisal of the company has the following deficiencies. (1) All departments and staff measure their job responsibilities in terms of the key performance indicator (KPI). As the index’s assessment results affect employees’ salaries, the indicators are relatively simple, and no challenging indicators are set. (2) The monthly performance appraisal of employees achieves a timely evaluation of the work results. A performance salary for high-producing employees is greater than that of other staff. However, when all department staff have

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highly productive work months, this is not reflected in increased income. The company implements an annual performance-based salary system. However, the department’s monthly performance-based pay is within the range of + 10% of the amount assigned by the Human Resources Department. At present, all departments in the company’s total monthly performance-based salary are determined to be equal to a certain proportion of current staff members’ salaries. According to the company’s total monthly performance-based salary issued by the Human Resources Department, all departments’ total monthly performance salaries shall be distributed among employees inside of the department. Since the monthly performance-related pay of NP company is based on the total amount (determined according to the total proportion of the salary of the current staff), there is no incremental performance-related pay. The performance-related pay of employees who have completed outstanding work in the month but have not been rated as outstanding is lower than that of those who have completed average work in a particular month. A longitudinal comparison of the performance-related pay of employees may highlight the reasons behind the decrease in employee enthusiasm.

4.4

Team Cohesion in the Shared Financial Center

NP company is located in Shanghai. First, employees in the company are faced with a heavy workload and extensive work pressure. During the work day, there is no time for emotional discussions, only work communications. Second, employee accommodations are far from the company and scattered. Hence, it is not easy to organize communication activities on weekends and holidays (some staff cannot attend due to family reasons). Simultaneously, although the average monthly salary of employees has increased by more than 9% recently, rents have increased by more than 15%; thus, more than the salary increases. As the proportion of living costs in the average monthly salary has increased, employee happiness has decreased. The employees of the FSSC do not live in Shanghai and, thus, tend to resign when their income does not increase but living costs do. Moreover, as there is little emotional communication among employees, they have no deep connections with each other and, therefore, no attachments when they resign.

Control: Information Management

Hospital adverse event processing via information system Three-level management structure of the hospital adverse events Application of PDCA method in the development of hospital adverse event system

Building up a “Smart Brain” for the hospital Intelligent speech recognition during the follow-up work Cloud storage for deep analysis of medical big data

Development of the Internet hospital system Project requirements of the Internet hospital system Application of the life-cycle method in the project

Information Management of Adverse Events Across Multi-Disciplinary Hospital Teams Jia Ke

[Scene 4.1]Adverse event reporting A notification is received on a phone, and a text message is displayed. Xiaojun Chen, the Head of the Information Department of the Affiliated Hospital of Jiangsu University (AHJU), looks at his phone and reads: “The system automatically detects that there are two medical orders for an indwelling gastric tube in a short period, which may lead to an unplanned extubation event. Type: gastric tube. Please check whether adverse events need to be reported in time! Department: Department of Nephrology. Bed: 20. “Patient name”: ***. Admission number: 0033 **.” The text message has been sent to the Adverse Event Center from the adverse event detection system (AEDS), which has been independently designed and developed by the information department. The system detects a possible unplanned extubation adverse event and automatically pushes the message.

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Introduction

An adverse event at a hospital is an injury related to medical treatment that may affect the diagnosis and treatment results of patients, such as increased pain and affliction along with possible disputes or mistakes in the process of diagnosis, treatment, and nursing. Many adverse events occur unexpectedly. For example, adverse nursing events, including fainting and unplanned extubation, are generally recorded and reported by nurses at a nurses’ station or on a mobile nursing platform; adverse reactions to blood transfusions are generally recorded or entered

J. Ke (B) School of Management, Jiangsu University, Zhenjiang, China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Fan et al. (eds.), Casebook of Chinese Business Management, Management for Professionals, https://doi.org/10.1007/978-981-16-8074-8_11

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into a blood transfusion management system, and handled by the blood transfusion department. Doctors record adverse drug events in an office automation (OA) system or at a doctors’ station, which the medical department handles. Adverse events related to occupational exposure are generally recorded by doctors in a hospital infection information management system and handled by the hospital infection department. As adverse events occur in multiple departments, some may involve only one department, while others may require the coordinated management of multiple departments. Thus, information processing, especially in comprehensive adverse events, involves the independent systems of multiple departments along with a need for collaborative prevention across departments. During the spring of 2016, vice president of the hospital, Dr. Jixiang Chen, who was in charge of medical quality, visited its information department for an important meeting. The discussion was on how various adverse events could be managed and whether these could be managed by deploying information technology. Vice president Chen said, “The existing management mode of adverse events in most hospitals at home and abroad can be divided into two types. One is management by the nursing department, and the other is management by the medical department. The nursing adverse event reporting system relies on nurses filing reports at a nurse station. The medical department’s adverse event management system is generally embedded in the hospital’s OA system, where all the staff can record it. Many departments are responsible for other adverse events; the medical department is responsible for events involving drug reactions, the equipment department is responsible for events involving devices, and the hospital infection department is responsible for events such as needle stick injuries.” Xu, director of the medical department, said, “If an adverse event occurs in a single department, it is easier to deal with compared with one involving multiple departments. Once there is a comprehensive event that requires the coordination of two or more departments, it is challenging to deal with. Who should handle it? That is a difficult situation to define. Can we implement unified management with the help of an information system?”. Xiaojun Chen said, “The adverse event system initially relied on the nurses’ station or the OA system. It could not make a timely identification of patients’ detailed information in the hospital information system (HIS), so there is a need to overlay the various systems. We need to establish a hierarchical management structure that connects all departments, especially those with an intersection in the workflow.” Zhuang, director of the nursing department, said, “Presently, some adverse events are either underreported or not reported. Is there a way to help us carry out comprehensive detection, timely submission, and facilitated processing?”. Xiaojun Chen replied, “There are many kinds of adverse events that require the information system to comprehensively detect, report, and handle them promptly. Again, we need to consider how to predict and detect suspected events according to the different types of adverse events. Together, we need to think about these in critical details.”

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Decision to Design and Develop an Independent Adverse Events System

In their weekly morning meetings, the engineers held discussions on improving adverse event management. The following captures some of the engineers’ comments in the discussion. “Adverse events include a variety of departments. In a specific event given by the medical department, such as a drug allergic reaction, if the patient experiences an allergy reaction after taking medicine, the pharmacy department handles the event. If the doctor’s incorrect dosage causes the same event, it would be handled by the medical department. If the doctor prescribes the right medicinication, but the nurse administers the wrong one, it will be a matter for the nursing department. This is only the tip of the iceberg in the management of adverse events.” “Looking at the existing adverse event systems operated by other hospitals, these functionally support event reporting and data statistics but do not actively monitor and prevent adverse event occurrence. Meanwhile, there are many departments involved but no unified management unit to handle these events; the current situation is such that there are many underreported or non-reported events, or missing reports.” “When the event occurs, the new system should automatically report it, reducing the rate of non-reported events or missing reports. It should improve the detection rate of adverse events and reduce missing reports. Post-occurrence analysis should also help reduce the recurrence rate.” “From the perspective of information management system, if we can predict adverse events from data analysis, ultimately predicting events before they occur, this could significantly reduce the recurrence of such events. It would enhance the auxiliary decision-making function of our information system.” “There is a large set of data, many kinds of events, and different management structures among the departments involved. Data mining methods should be added to the data analysis module.” Xiaojun Chen concluded by saying, “It seems that everyone has sorted out the system’s needs. The realization of the system should be divided into several steps. First, we should detect the adverse events before submission into the hospital’s system, followed by post-occurrence processing. How would these events be predicted and assigned alarms? This should be designed and implemented carefully in the next step.” After several meetings, a preliminary system plan was developed. From the management perspective, the “Plan, Do, Check, Act” (PDCA) method was adopted. • In the planning stage (Plan), the adverse event center formulates policies for publicity and distribution. • In the design and implementation stage (Do), each department reports adverse events according to the policies.

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• In the inspection stage (Check), the management department checks the reporting of adverse events. • In the processing stage (Act), the hospital president presides over the discussion of adverse events every quarter, coordinates with the multidisciplinary departments to summarize the problems, and arranges the work priorities for the next quarter. Following the investigation of other units and the analysis of the existing adverse event system’s characteristics, Xiaojun Chen decided to task the engineers to independently design and develop an adverse event system suitable for the hospital. The adverse event center would be established and coordinate with the medical, nursing, medicine, equipment, hospital infection, general affairs, security, and other relevant departments. With the help of a multidisciplinary teamwork mode, the center would be able to handle adverse events across multiple departments. First, the adverse event center will sort the work using a closed-loop process for adverse events and establish a three-level, three-dimensional management mechanism for the hospital, as shown in Fig. 1. A double ring adverse event management system with a “department loopprocess loop” interlace will be formed when an adverse event occurs. The adverse event center will coordinate and address the adverse events in different disciplines and categories. For example, in the event of an allergic reaction from a drug, if this adverse medical event based on an incorrect dosage prescription by a doctor is submitted to the department of medicinal materials, the center can intervene and reassign the adverse event to the medical department for further management. In this way, management departments will not shift the responsibility of adverse

Fig. 1 Three level management of adverse events. Source: Prepared by case writers

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events to each other. The center can facilitate the multidisciplinary team management of such events. The overall management process of adverse events is “event occurrence” “event submission” “event declaration” “preliminary opinion” “cause analysis” “final opinion” “central opinion” “effect evaluation” and “completion”. After the investigation, planning, design, development, and implementation of the system, it was officially put into use after a trial period at the end of 2017.

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Using Artificial Intelligence (AI) Technology to Improve System Functions

The adverse event management system assists both the personnel reporting the event and those managing the event. It does this by reading the patient’s information, drug program, equipment, support personnel, and blood information and filling in the adverse event report automatically. The post-event management of adverse events can continuously follow up on reported historical events, improve the entire reporting process, and generate statistical data automatically. The visual interface supports the entire process of the closed-loop management of adverse events. At the summary meeting of the adverse event center, which took place two months after system implementation, Zhou, a medical staff member, said, “After implementing the system, the number of events received by the adverse event center significantly exceeded the number reported manually in the past.” Xu, an information officer, said, “Yes, because of missing reports and non-reporting before, the number of events increased after the online system was implemented. However, with the operation of the system, the incident rate is expected to show a steady downward trend.” Xu, an officer at the adverse event center, said, “The responsibilities of each department have become clearer through the online system. The phenomenon of shifting responsibilities is rare currently, and with automatic report generation, statistics and charts are also automatically generated at the end of each month. The tasks that used to take five days to complete in an hour.” Xiaojun Chen said, “According to the importance of the type of adverse event, the system has implemented a hierarchical management system, which is divided into four levels. Meanwhile, event reporting also adopts a combination of automatic and semi-automatic methods. A total of 44 items need to be filled out in the system. Among them, 18 items can be filled in automatically, and 20 can be filled in semi-automatically. The automatic reporting rate has reached 86%. It reduces the workload and time consumed by declaration personnel. A future plan is to work with the Center to conduct a deep mining analysis of the database. The ultimate goal is to reduce the incidence of adverse events.” In the year 2018, engineers proposed adopting a time series analysis method of AI technology to automatically detect suspected events based on the time attributes in the database. In the current system, time-attribute joint detection is included in

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the detection of abnormal extubation events. For example, in unplanned extubation events, if the corresponding relationship between the doctor’s order and the extubation time exceeds the warning threshold, nurses are reminded to report the event. Nurses can determine whether it is an adverse event and report it by viewing patient information. At the end of 2019, a new version of the system was launched, which could predict adverse events, send triggered push notifications of adverse events, and support the entire dynamic monitoring and warning process for data integration analysis. Using the HIS database as the basic data source helped establish the different event time thresholds, define the trigger mode, and automatically monitor adverse events. Data mining technology was used to analyze and mine historical adverse events after event occurrence.

“Smart Brain” Installation for a Follow-Up System for Patients Jia Ke

[Scene 4.2]. Operator: (Clicks the button to dial the telephone number automatically). Patient: “Hello!” Operator: (Click the button) “Excuse me, are you a patient or a family member of a patient?” Patient: “Yes, I am a patient.” Operator: (Click the button) “I am from the follow-up center of the Affiliated Hospital of Jiangsu University. Can you spare some time to answer a few questions?” Patients: “Yes.” Operator: (Click the button) “Are you satisfied with the doctor’s service attitude in our hospital?” Patient: “Satisfied!”. Operator: (Click the button) “Are you satisfied with the canteen food in our hospital?” Patient: “Not very satisfied!” Operator: (Voice communication) “What is the main dissatisfaction with the canteen food?” Patient: “The dishes are too simple, and the taste is not very good.” Operator: (Click the button) “OK, thank you.” Operator: (Click the button) “What other suggestions do you have for our hospital?” Patient: “I hope the hospital can provide more parking spaces for patients!”

J. Ke (B) School of Management, Jiangsu University, Zhenjiang, China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Fan et al. (eds.), Casebook of Chinese Business Management, Management for Professionals, https://doi.org/10.1007/978-981-16-8074-8_12

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Operator: (Click the button) “OK, we will record your comments, thank you for your cooperation, goodbye.” Patient: “Goodbye!” Call ends. After watching the staff’s smooth follow-up process of “dialing, follow-up, and receipt of feedback”, Xiaojun Chen, the head of the Information Department of AHJU, was pleased.

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Introduction

Follow-up is an observation method the hospital uses to track and communicate with patients after diagnosis, to follow-up regularly regarding changes in the patients’ condition, and guide their rehabilitation. Follow-up feedback can capture first-hand patient data, generate statistical analysis, accumulate experience, and improve hospital service, all conducive to medical research development. Follow-up staff keep in touch with patients to remind them of their regular reviews and observe curative effects and patients’ recovery progress. For example, staff monitor, warn, provide medication guidance, and offer total health management to patients with hypertension, diabetes, and other chronic diseases. In the AHJU, follow-up work is divided into three dimensions according to the follow-up departments. The first is the doctors’ follow-up with a patient after diagnosis. In this case, further medical examination and diagnosis are necessary. For example, Color Doppler ultrasound is used to screen and follow up with patients having vascular surgery for arterial stenosis. In gynecology, patients with uterine fibroids are followed up after three months or half a year using an ultrasound procedure. The second are the nurses’ stations in different departments, which are responsible for following up on discharged patients to evaluate doctors’ and nurses’ medical service levels, perform medical environment evaluation of the departments, publicize nursing knowledge, and conduct intervention guidance. For example, a follow-up scale for varicose veins was designed by the Vascular Surgery Department for patients to fill out, and a gynecological nurse station follow-up was implemented for patients with cervical diseases. The third is the hospital’s Follow-up Center, which operates from the perspective of overall management. It follows up on hospital service quality and patients’ satisfaction, from obtaining feedback to providing decision-making assistance for hospital management. Since the commencement of the hospital’s informatization era, follow-up efforts have been carried out independently in both the hospital information management system and the follow-up system in the form of an online questionnaire or a telephone follow-up.

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Summary of Opinions

The telephone follow-up, “dialing, following up, receiving feedback”, requires manual participation. Doctors, nurses, and follow-up center personnel believe that the telephone workload is heavy and have appealed to the Information Department to reexamine the process. At a weekly working meeting of the information department on Monday, September 7, 2015, engineers summarized departmental opinions and Follow-up Center information. Shi stated, “The follow-up center personnel reported that according to the current number of visits, they need to survey the satisfaction of all the patients. In addition to the lack of staff, the few who are available are on the phone eight hours a day.” He indicated that, “Questions that were administered included asking patients whether they were satisfied with the canteen; if there was parking congestion; and their opinion on the service desk of the outpatient hall, among others.” Then he addressed the staff, stating that he hoped the automation of the follow-up system would reduce the huge workload of dialing and answering questions. Tian said, “There are inquiries from various departments, such as vascular surgery, seeking to know whether they can automatically push the questionnaire to each patient. Sometimes, when a call is dialed, the patient may be working or occupied; hence, there is no time to answer. The department asked if there was an automatic program in the system to repeatedly dial at intervals so that patients could answer when they were free. This meant there would be no need for missed and supplementary visits between shifts at the nurses’ station.” Song said, “Some doctors have also inquired whether they could automatically remind patients of further and regular visits or check-ups because the workload of doctors in the outpatient department and the ward is already heavy. If the periodical follow-up reminders could be automatically executed, it would be more convenient.” Presently, the follow-up system sorts out the follow-up questions, generates questionnaires, statistically manages the questionnaires after follow-up, automatically creates reports, and effectively reduces the preparation workload before and after follow-up. Regardless, the staff still have higher expectations and requirements for information technology and automation. Xiaojun Chen considered whether there was any way to further reduce the burden.

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The Spark that Solves the Problem

Just then, the phone rang which interrupted his thoughts. He looked down at his phone and noticed that it is a spam call. “It must be the robot voice”, Chen thought without doubts. However, this call enlighted him on thinking about the words “auto” “play” “robot voice” and “advertisement”. In the follow-up system, if the

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follow-up call could effectively execute automatic dialing and machine voice questioning, would this be a way to reduce everyone’s workload? “Yes. I want to thank this spam caller today.” How does such inspiration turn into realization? How can creativity turn into reality? How do we develop the information technology design and implementation? This is a task for the engineers. The follow-up system needs to integrate the hardware of the automatic dialing telephone, programmable telephone box, and intelligent speech recognition program. This is equivalent to installing a “smart brain” in the original follow-up system. The new system will translate the questionnaire into synthesized speech, send instructions to start dialing, carry out the voice questioning, receive voice responses, translate these into text, store the information in a database, and record it simultaneously. Then, the system sorts the opinions, analyzes and processes them, and generates statistical reports. The first step is to purchase programmable telephone boxes that can integrate handwritten programs. Intelligent speech synthesis and recognition programs need to be incorporated and linked to the original follow-up phone system. The phones will be configured into smart forms that automatically dial, generate, and receive voice responses. The phone box will serve as the “smart brain” of the entire followup system. After a trial period of operation, several issues were identified. In August 2017, these problems were discussed at one of the weekly meetings of the information department. Shi said, “We originally anticipated that the front end of the phone would be integrated with a smartphone box, which could automatically dial and answer questions. The results show that some elderly patients’ feedback collection is missing.” Song said, “Yes, elderly patients need high volumes to hear. Again, their answers have local accents, so when the system translates their voices into words, it becomes distorted.” Xiaojun Chen said, “It appears that there is a need to download some dialect libraries and upgrade the voice database to see if it works better.” Tian said, “There are also some nurse stations that report patients find it impersonal because of the questions from the machine.” Xiaojun Chen said, “It appears that patients are not used to the new system of automatic voice answering. Follow-up patients may indeed mistake this for advertising calls; they need to understand and be receptive to the tone of these care calls. The nurse station and follow-up center could use a semi-automatic followup mode. The machine could ask general questions, and other questions based on individual characteristics could be attempted through a mixed mode of manual and machine questions and answers. A manual follow-up interface should be added to the system. In any case, the dialect problems could also be solved by the mixed model.” Following these opinions, the system was partially adjusted and put into operation in March 2018.

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Further Development

After the new follow-up model was officially launched, the departments and the follow-up center staff felt that the work efficiency improved significantly; the workload of repeated dialing and questioning was reduced. These continuous commendations were relayed to the information department. Simultaneously, overall participation in information technology improved significantly, and demands of and opinions on the information system were conveyed to the information department. Typical queries like these arose: “Can the follow-up report be interconnected with the hospital management information system, and can doctors receive the last follow-up record when patients return to the hospital?” “Can the appointment function for future visits be improved?” For patients who need follow up in affiliated community hospitals: “Can the follow-up questionnaire be generated by merging the medical records in our hospital?”. Xiaojun Chen reflected on and evaluated these new needs, intending to solve these problems. The coronavirus pneumonia (COVID-19) emerged in early 2020. The AHJU is one of the centers for suspected or confirmed COVID-19 cases for birth control and delivery of pregnant women, as published by the National Health Commission. As early as the end of 2019, the hospital became the first to obtain an Internet medical practice license in Zhenjiang. The intelligent follow-up system’s main work on AHJU’s online intelligent medical treatment platform was to follow up, rehabilitate, and manage health. During the pandemic, the system provided follow-up services for home observation, suspected fever patients, and patients who needed online consultation and prescription renewal. As the main caretaker of the development and implementation of the “Internet hospital”, all information department engineers were actively working during the epidemic period. Xiaojun Chen speculated that follow-up data could not simply generate functional reports for data management. The system needed to mine data, analyze them, and support decision-making. To this extent, the system needed to be able to integrate clinical treatment records, medical scans, exam records, and personalized follow-up content for different patients. Simultaneously, different follow-up plans were needed for different discharged patients, close-relation contacts, home isolation, and centralized fixed-point isolation. During this period, data storage and sharing requirements were higher for the tasks of information reporting, sharing, and analysis in the follow-up system. In the medical associations, and general and community hospitals, huge data sets were generated to track chronic diseases, prevention, and treatment of infectious diseases. Cloud storage technology with “Internet plus” technology was needed. The follow-up system data generated by general and community hospitals were stored in the “cloud” This not only saved storage space in physical equipment but also achieved effective data sharing. It also assisted the management and data service center in conducting deep analysis and data mining. Currently, the system operates smoothly, and functions have been upgraded to include incremental data storage and sharing management. After the “smart

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brain” was installed in the follow-up system by information engineers, the system’s intelligence grew. However, Xiaojun Chen is aware that an excellent information system needs long-term application, constant improvement, and upgrades in the process of identifying and solving problems before it is considered fully developed. Concurrently, information and internet technologies are constantly being updated, and new technologies and methods can bring new insights to management through the analysis of big data. Informatization efforts will always be needed and expected.

A Smart Internet Hospital—The Building of the AHJU Internet Hospital Jia Ke

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Introduction

[Scene 4.3] Remote consultation in a community hospital. On the morning of May 17, 2019, a remote diagnosis and treatment was in progress on the Affiliated Hospital of Jiangsu University Internet hospital (AHJU online). This is one of the parts of the “5G Medical Service into the Community” project. Professor Baoding Chen, director of the B-ultrasound room of the Affiliated Hospital, and Professor Chu Shen, along with other professors, were conducting a B-ultrasound examination for a retired hospital staff member a few kilometers away from the large electronic display screen using 5G technology. Professor Baoding Chen’s instructions were sent to the B-ultrasound doctors at the university’s hospital. With the help of the 5G network, after a careful diagnosis by a group of experts, the patient’s diagnosis results were liver and kidney stones, and prostate hypertrophy. Mr. Li, who came to the staff hospital early in the morning to prescribe medicine, said “Without leaving the school, we can access the medical resources of the top three hospitals. Older people like us have chronic diseases. Now we can consult, return, inquire, get prescriptions, and medicine delivery through ‘AHJU online’ and the school staff hospital. It’s so convenient! After prescribing the medication, I will go to the teaching area to conduct a class.” Since the implementation of AHJU online, patients’ satisfaction has been the goal of the development team. Xiaojun Chen, the head of the information department of, AHJU continued paying close attention to the electronic screen of the consultation center.

J. Ke (B) School of Management, Jiangsu University, Zhenjiang, China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Fan et al. (eds.), Casebook of Chinese Business Management, Management for Professionals, https://doi.org/10.1007/978-981-16-8074-8_13

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Background

AHJU which locates in Zhenjiang, Jiangsu Province, is a modern and comprehensive hospital with advanced equipment, a strong technical force, and a top-tier diagnosis, and treatment environment integrating medical treatment, teaching, and scientific research. It was one of the first three class A hospitals designated by the National Health Commission in 1995, with 40 clinical departments, 16 medical technology departments, 2 national key specialties, and 2 provincial key specialties. The hospital’s annual outpatient volume is 1.7 million, and the annual number of discharged patients is approximately 60,000. The daily outpatient volume is approximately 5,000. After information construction and development for many years, the hospital has gradually implemented a number of management information systems, including its hospital information system (HIS), laboratory information system (LIS), electronic medical record (EMR) system, picture archiving and communication system(PACS), radiology information system (RIS), physical examination, materials and equipment, surgical anesthesia, and data exchange platforms. At present, some are running smoothly, while others are in the process of implementation. Currently, the hospital also has a considerable number of outpatients. For the patients who come to the hospital, the impression is that since many people are queuing up, the treatment time is short. During the spring of 2018, an elderly lady, Li, Shi’s neighbor, visited the hospital one day. A few days after she returned, she complained to Shi, a hospital information engineer, saying, “In the outpatient department, there are all kinds of queues for payments, inspections, and getting medicines. It takes half a day to see a doctor. If you do another examination, you would be in the hospital the whole day.” This problem has become a “big problem”. Director Pei Zhu, who is in charge of the outpatient department of the hospital, had been mulling over for a long time: “How could the efficiency of patient care and patient satisfaction with the hospital be improved, while fully allocating the comprehensive resources of the hospital, and simplifying the procedures?”. [Scene 4.4] Weekly hospital meetings. In the early summer of 2018, Pei Zhu raised the question at the hospital’s weekly meeting. As a result, the directors of all departments expressed that they all had the same concern. One stone can cause a thousand ripples. Everyone had the same though with regard to the patient’s experience and the hospital system’s operational efficiency. President Chen concluded, “Our hospital has always been focused on patients’ health. How can we promote more efficient hospital management, more advanced medical technology and private medical services, better patient understanding of medical treatment, and improve their happiness and security? It is difficult for patients to see a doctor; there are cumbersome procedures and long queuing times that need to be solved. We need to ascertain the pain points, confront the difficulties, formulate a plan, and carry out a top-down reform.”

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Xiaojun Chen said, “We have implemented management information systems (MISs) and improved the efficiency. Now, we can integrate the dispersed systems and build smart hospital platforms using the ‘Internet plus’ advantage, creating a new medical mode with full process intelligence. With the help of information technology, areas with many patients and queues, such as registration, payment, appointments for physical examinations, and appointments with experts, can be transferred to the Internet for online diagnosis and treatment.” After several rounds of research and demonstration the first “Internet plus medical health” clinical data center in Jiangsu, the hospital decided to build an integrated platform for the hospital—AHJU online. The new platform would be designed and implemented based on the “Internet plus” advantage, optimization of resources allocation, and integration of specialized information systems in different departments. It would support the closed-loop process of online consultation, treatment, prescription, and drug distribution. Xiaojun Chen considered the minutes of the meeting on his desk and fell into thought. The idea of an integrated platform had been a difficult sticking point for a long time. Although the hospital had always attached importance to information technology, various departments were running, planning, and implementing. However, each business system often carried out information exchange according to its independent exchange requirements, so the vast majority of business data exchanges were realized separately according to business requirements. The fragmentation of the information was evident. The data specifications for each system were different. How can we achieve the integration of information and data into one system, which is separated into functional statistics, analysis, and utilization? This was a big problem. The current situation has created an urgent need to coalesce the existing systems to integrate data from the business systems onto one platform, improve the efficiency in the sharing of hospital information, and realize the integration and interconnection of structured and unstructured data within the hospital. Additionally, a data analysis platform for the clinical data center, medical treatment, scientific research, and operation management departments needed to be established, and the data center needed to become the entrance point for data mining and an integrated display that could enhance hospital management’s decision-making. From the perspective of patients, after implementing the Internet hospital, the hospital could facilitate registration, treatment, examination, and drug collection for patients across various departments. This would enhance patient satisfaction and a sense of belonging and provide more effective, convenient, and high-quality medical services for patients through information technology. The establishment of the Internet hospital could meet the needs of different system users, continuously improve and perfect various information processing models, and enhance the hospital’s digital operation and management. Gradually, this would create the transformation from a “fee centered” to a “patient centered” digital hospital. The deep mining and analysis of medical data would also contribute to the improvement of hospital management. Thus, the construction of the internet hospital’s comprehensive data integration platform project was imperative.

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After much consideration, the Internet hospital project transformed from an idea to reality. Xiaojun Chen took a deep breath and said, “This will be a big innovation in the mode of medical treatment.”

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Project Requirements

After officially launching the AHJU online project, engineers in information department integrated the preliminary research stage results with their experience in the construction of the information management infrastructure. Engineers carried out tasks in accordance with the overall planning, analysis, design, and implementation of the information construction and lifecycle method. According to each department’s work content, the general ideas for the construction of the Internet hospital focused on conventional medical treatment, hierarchical diagnoses and treatment, health management, and quality control management.

3.1

Convenient Medical Treatment

Combining online intelligence guidance and artificial online consultation can help guide patients according to their symptoms and diseases. This approach can provide consultation as well as pre-diagnosis services, appointments for registration and physical examinations, appointment inspection, online follow-up, and emergency access to the emergency network platform along with other operations through preliminary pre-diagnosis and triage. Patients would be able to query health records, examination reports, health guidance, and follow-up information on the mobile terminal. AHJU online would provide access to the medical insurance settlement system and online payment channels, such as Alipay and WeChat, to enable patients to pay online without leaving home. Patients with common diseases and stable chronic diseases would be able to consult with public hospital doctors online for regular diagnoses and treatment without needing to go to hospital. Patients would be able to obtain online consultations on mobile terminals, renew prescriptions online, pay online, and have their medication delivered to their homes. The hospital would be cooperating with third-party cloud pharmacies and distribution agencies. After a doctor issues a prescription online and a pharmacist confirms the medications, the hospital would select the distribution agency to deliver the drugs to the home by sorting and reviewing the cloud pharmacies.

3.2

Grading Diagnosis and Treatment

Through the upstream and downstream links of the Internet hospital, combining information technology with the traditional hierarchical diagnosis and treatment mode, a new medical hierarchical diagnosis and treatment model was formed.

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The analysis of online pre-diagnosis recommends stable online follow-up prescriptions for patients with common and chronic diseases. Patients with chronic conditions who have independent actionability and need to be examined by doctors, can choose the nearest community hospital for treatment. Elder patients with chronic diseases who have no actionability are provided door-to-door services by contracted doctors. Patients with acute attacks and critical illnesses can enter the emergency network directly, which informs the ambulance to rush to the scene. Information technology is used to deal with these patients with different conditions, achieve accurate hierarchical diagnosis and treatment, and improve the Internet hospital’s medical service level.

3.3

Health Management

The health management platform is built to carry out professional, authoritative, and accurate health science education, provide health guidance and health consultations, and other services. The platform shares relevant medical and healthcare information that provides users with self-care and health consultation and additional related information, encourages a healthy lifestyle, improves health awareness, and enhances public health literacy. Community residents can utilize through information technology, query health records, and obtain consultations through a computer network, apps, and other channels. With the in-depth development of the Internet hospital, contracted residents in the community test blood glucose, body temperature, blood pressure, and other related indicators at home through wearable devices. The test results are transmitted to the Internet hospital platform in real time to realize 24-hours continuous health monitoring.

3.4

Quality Control Management

To supervise internet medical services effectively and establish a comprehensive supervision system for Internet medical services, the system uses intelligent supervision. The supervision process for online medical services, online diagnoses, and treatment behavior is implemented to ensure the quality, safety, and reliability of the Internet medical services. For quality control, data are captured in real time, with in-depth analysis and mining. According to the established guidelines, all types of medical quality control messages are accurately and automatically pushed to ensure medical quality control management.

3.5

Technical Objectives

The interconnection of AHJU online and the HIS creates a seamless connection for doctor scheduling, registration, payment, prescription, and other medical

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links. An information exchange platform interconnects with a regional information platform and drugstore/logistic enterprise resource planning (ERP) systems to achieve the flow and processing of patients’ medical information. The regional classification/referral system along with the Internet hospital recognizes patients’ re-entry for consultation or further consultation in offline community hospitals. The online payment and settlement platform for drugstore/logistics recognizes online payments and medical insurance settlements of medical expenses. [Scene 4.5] Hospital weekly meeting. After sorting out the project requirements, Xiaojun Chen creates preliminary phased plans for the platform system. On that day, the heads of the departments meet again. Xiaojun Chen reports the work progress, saying, “Our department combed through the information work process of the whole hospital, and made an overall plan for the Internet hospital, which is divided into three phases. In the first phase, we mainly establish a convenient medical service system, quickly achieving online prescription renewal for some patients, supporting the linkage of the medical insurance card for medically insured patients, enabling electronic payment, and providing access to the online pharmacy for the distribution of electronic prescriptions. The second phase is to build a medical association hierarchical diagnosis and treatment platform with select designated community hospitals for remote consultation and a hierarchical diagnosis. Treatment applications can improve chronic disease management with the help of wearable Internet of Things devices and gradually through family contracts with doctors. AHJU online should build a medical emergency treatment network, and develop five large- and medium-sized applications for the management of chronic diseases. In the third phase, a comprehensive supervisory system for Internet medical services will be established along with the piloting of new medical technologies in individual departments and diseases.” The director of the Outpatient Department said, “Patients with some common diseases, stable geriatric diseases or chronic diseases, need to visit regularly, adjust prescriptions, get drugs dispensed, and take medication periodically. Can patients consult and renew prescriptions online using the Internet hospital? Will the Internet hospital open a specialty for them?”. Xiaojun Chen said, “These patients are the most direct beneficiaries of the online hospital, and the system will first classify them according to their condition.” The medical department director asked, “Can a doctor continue to prescribe through various ways, such as text, voice, and video, after patients with chronic diseases return online? Can patients also check their medical records at any time on their mobile phones?”. Xiaojun Chen said, “We assume that the goal is to achieve remote follow-up services, so that patients with chronic diseases can receive hospital services without

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leaving home. For the management of specialized diseases, such as asthma in children, the hierarchical management of chronic diseases, and the health management of home-based care, patients can enjoy health consultations, disease management, medication guidance, and other services at home to achieve integrated management of chronic diseases via AHJU online.” The director of the medicinal materials department said, “In the field of medical materials management, especially in the pharmacy, we can carry out home delivery services. For example, when patients see a doctor online, we deliver drugs directly to their homes. For patients who go to the hospital, they can also have medicines delivered to their homes. This makes it easier for them to see a doctor.” Xiaojun Chen said, “Achieving every process in the closed-loop of registration, follow-up visits, prescriptions, payments, and home drug delivery, along with data security are critical problems that the internet hospital needs to solve. The platform needs to ensure the smooth operation of each link, including the system requirements analysis, master plan, and schedule. Please take a serious look first and let me know if you have any opinions and ideas for improvement.” Subsequently, each department head looked at the demand analysis and system planning books carefully. After the regular meetings, everyone had a clear understanding of the system. The project then entered the design stage.

4

Overall Project Design

According to the relevant “Internet plus” medical service documents of the state and province, AHJU online was built with a multiple support system that included a patient application platform, a mobile medical workstation, a doctorpatient interaction framework, an aggregated push platform, and a unified payment platform.

4.1

Overall System Design

As the existing hospital information system had different standards, data models, and platforms, when data sharing was needed, it was often due to the system’s heterogeneity and the increasing number of integration requirements. This type of point-to-point information exchange mode was complex and challenging to maintain. It was unable to meet the increasingly complex data sharing and exchange requirements and created “information islands” within the hospital. Therefore, AHJU online, as a unified information platform, would integrate the existing systems, forming unified platform architecture for interconnection, unified data design specification, while recognizing the sharing and exchange of information standards between business systems.

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Subsystem Module Division

In terms of system functions, the subsystems of the AHJU online integrated platform were as follows: patient treatment service, chronic disease management, electronic prescription and data security, hierarchical diagnosis and treatment management, medical emergency treatment, and medical quality control comprehensive management. The functional modules are illustrated in Fig. 1. [Scene 4.6] Weekly meeting of the Information Department. Engineers were discussing the technical problems. Engineer Shi said, “In terms of the overall design plan of the system, the information platform integrates the functions of the various systems used by different departments in our hospital. To connect data in a series, the first thing to achieve is the interconnection of the data interface. However, each department’s system, its original data structure, and data specification are different. We need to develop a unified data standard.” Engineer Xu said, “After integrating various systems, large amounts of data will be generated. Our database storage needs, including hardware, will change. By the way, the quality control service center managed by the medical department has always hoped that we can perform hospital management data analysis and provide auxiliary decision-making for quality control.” Engineer Song said, “Not only should data specification be unified before integration, but the post-analysis of data should also be considered after integration. The construction of a new platform will be difficult. The quality control center not only wants an analysis report generated by the current statistical analysis, but also wants the addition of data mining analysis module to conduct in-depth data analysis. After implementing the new platform, the size of the dataset should meet

"AHJU online"Internet hospital integration platform

Patient treatment service subsystem

Chronic disease management subsystem

Electronic prescripti on and data security subsystem

Hierarchical diagnosis and treatment management subsystem

Medical emergency treatment subsystem

Medical quality control comprehensive management subsystem

Fig. 1 Function module diagram of “AHJU online”. Source: Prepared by case writers

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the big data level requirements of data mining. However, system data also need further cleaning, conversion, and processing to meet data mining standards.” Xiaojun Chen concluded, “We should consider all the problems in the process of the platform integration construction. Before the integration, we should first formulate a unified data format standard. It turns out that the interface structure between the various system integrations is also key to our integration. There is also the need for analysis of big data in a later stage. We will use data mining technology to conduct mining and analysis of hospital management data. The phased implementation of the platform will address and solve these problems one by one. However, we should also be prepared for difficulties and problems in the process. Everyone should have confidence and feel energized to do it!”. After the discussion, everyone took their assignments and went to work.

5

Detailed Design of the Subsystem

Engineers divide the functional modules according to system function so that each subsystem can integrate the original information system function of the different departments. The interfaces between the modules are designed to achieve information sharing and interconnection.

5.1

Patient Treatment Service Subsystem

The convenience medical service platform is based on the WeChat official account/Alipay service window, which connects hospitals, doctors, nurses, and patients. It enables doctors and patients to communicate across time and space, reasonably allocating patient time and improving patient medical efficiency. The multi-terminal patient self-service diagnosis and treatment system includes appointment, diagnosis and treatment, inquiry, payment, and interaction links, among others. The hospital’s introduction function, the hospital departmental introductions, and the experts’ introductions provide helpful content for patients, such as department floor distribution, the outpatient/emergency process, processes for patients entering and leaving the hospital, payments, and settlements. The appointment service function provides online outpatient registration, where the user can choose a doctor, and the doctor can recommend a test. Patients can pay and then make an appointment to get their test details. The patients can visit the hospital to have the test done and then leave. Once the results are generated, the patient can be reminded to check them online or collect them offline. Newly diagnosed patients need to go to the hospital at least once. The queuing function can make an appointment for diagnosis and treatment at different periods, intelligently recognize and segment diagnosis and treatment events, and remind patients waiting for treatment. It captures patients waiting to

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sign-in, waiting for a number inquiry, waiting for treatment, for an exam, for a medicine number query, and for a number reminder, among others. In the payment function, patients can make online registration fee payments, outpatient fee payments, deposits, hospitalization fee payments, and enter realtime order transaction queries. Access to the medical insurance settlement system provides a fast payment channel for docking services, and supports medical insurance online payment. By cooperating with UnionPay and third-party payment institutions for online payments, settlements can occur between the self-service terminals and mobile clients. The system has automatic account checking, and financial personnel can confirm and audit the system manually. The query service function provides self-service query for various reports, diagnosis and treatment records, hospitalization lists, and discharge settlement lists, among others. The health information function disseminates online health knowledge, professional, authoritative, accurate popular science education information, is a platform for medical and health knowledge sharing, and provides users with self-care, health consultation, and other related information, including lifestyle, disease knowledge, health examination, health news.

5.2

Chronic Disease Management Subsystem

A perfect chronic disease health records system provides detailed data support for long-term diagnoses and treatment of patients. For their convenience, doctors and patients have access to early warnings, and mid-term control and late term treatment information for some symptoms, complications, and risk factors. Scientific diagnosis and treatment, rehabilitation, and follow-up visit plans are designed according to each patient’s actual situation, various exam results, and other information, combined with the professional prevention and treatment plan for chronic diseases and experts’ diagnoses and treatment plans. The hospital can develop personalized, practical diagnosis and treatment, rehabilitation, and followup plans for patients with chronic conditions. In the medication and disease management system, patients can record their daily medications and condition in the system, and experts can guide and address patients’ medication and conditions online. The system recognizes the interactions among specialists, pharmacists, and patients, including medication reminders, consultations, frequently asked questions (FAQs), follow-up reminders, indicator monitoring, and online prescription renewal. The health education for chronic diseases system integrates different treatment types with psychology and rehabilitation, and other related knowledge to provide health education support for patients. Patients with chronic diseases can practice self-control, correct unhealthy or irrational habits and risk factors to better treat chronic diseases. In the online renewal and payment system, once the patient’s medical records are understood, doctors can issue online electronic prescriptions. Furthermore,

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through the Alipay or WeChat platforms, online one-stop settlement services, online automatic settlement and payment of local medical insurance can be completed.

5.3

Electronic Prescription and Data Security Subsystem

The security system uses electronic signature authentication to solve problems related to forgery, tampering, impersonation, and denial. For tamper-proof prescriptions, once the doctor confirms that the pharmacist has approved the signature and the prescription, a snapshot image is electronically generated and saved in the database after encryption to prevent it from being tampered with. At the same time, prescriptions are presented in the form of pictures for pharmacy dispensing. The prescriptions transferred to pharmacies are closely checked and distributed according to the requirements and the dosage and specifications of the drugs are not changed without authorization. For data security, the secure sockets layer (SSL) protocol is used to encrypt data transmissions between the hospital platform and the hospital applications. When an external application obtains data from the platform server, data are encrypted through SSL protocol to provide a security scheme for network communication and data integrity.

5.4

Hierarchical Diagnosis and Treatment Management Subsystem

A “medical service connector network collaborative outpatient service” is created by constructing a diagnosis and treatment management service platform that connects the hospital and the patients. The general outpatient service for patients in the primary hospital and the expert outpatient service in the superior hospital are included online. This enables the hierarchical diagnosis and treatment of patients’ primary diagnoses, remote consultations, two-way referrals, urgent and slow treatments, and up-down linkage. Simultaneously, based on the advantages of its medical resources, the Internet hospital platform radiates to grassroots hospitals in the region. In the first phase, the Jiangsu University community and the Jiankang Road Community Service Center, as the pilot forums, provide remote collaborative consultation, two-way referrals, and other functional services to promote grassroots dissemination of high-quality resources and guide grassroots patient services.

5.5

Medical Emergency Treatment Subsystem

The new medical emergency network will establish five treatment centers for chest pain, stroke, trauma, severe case of pregnant women, and newborns. The new medical treatment platform, with AHJU, will cover the whole Zhenjiang

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city. Information interconnection with a regional platform and the pre-hospital emergency center can strengthen patient information sharing, remote emergency guidance and pre-hospital emergency preparation, seamless docking, and improve emergency treatment efficiency. Through the network, multidisciplinary cooperation in diagnosis and treatment can be strengthened, and active preparation for building a treatment center can begin. The network can also achieve the “four in one” modern emergency mode of “pre-hospital–emergency–operation–intensive care.”

5.6

Medical Quality Control Comprehensive Management Subsystem

The control system will support the supervision of all Internet medical services and Internet hospital online diagnosis and treatment behavior to ensure the quality, safety, and reliability of these services. Its design comprises three layers. The bottom layer focuses on data acquisition, automatically extracting data from the HIS, LIS, and EMR databases. Data are compared against the medical quality index system; real-time reminders are issued, and the management department can intervene in advance in the process, including monitoring and querying the key links in the medical process, and extracting data needed for management analysis. The platform’s middle layer focuses on data extraction, and rule operation provides support for top-level data display. It can clean, recalculate, and write complex data into a database according to the index system’s requirements. Data mining technology is used for digging and analysis. The application presentation layer helps the Internet hospital with preliminary decision-making by displaying collected real-time business data according to the quality control rules.

6

Project Implementation

On December 28, 2018, AHJU online was successfully launched. On the same day, a signing ceremony was held with Shanghai Pharma Health Commerce Co., Ltd. to build the “Yiyao cloud hospital” jointly with AHJU online. It is the first “Internet plus” service in China to achieve online processing, online consultation, grading treatment, health management, unified payment, and home delivery of drugs. On World Telecom Day, May 17, 2019, AHJU with Zhenjiang Unicom carried out a remote ultrasound consultation with the community health service center of Jiangsu University using 5G technology. The event integrated front-end communication technology with high-quality medical resources, improving medical accuracy, and the patient’s medical experience. On October 24, 2019, AHJU online, gained Internet medical service access approval from the Provincial Health Commission, which became the second hospital of Jiangsu province and the first hospital in Zhenjiang city to obtain an Internet medical practice license. Moreover, it has become the only comprehensive Internet

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hospital in Jiangsu province to implement the entire closed-loop treatment process through home drug delivery, along with continuous and stable user volume growth. The project strongly influenced the entire province and even the whole China. On December 26, 2019, the healthcare community reception point of the internet hospital of Jiangsu University was established. The Internet plus medical health cooperation agreement between AHJU and the Jiankang Road Community Health Service Center was signed. Nearby, residents now receive medical resources from these hospitals at home. Using mobile phones, clients can book a series of services such as exams, diagnosis and treatment, prescriptions, and even hospital consultations. The end of 2019 marked over a year of operation of AHJU online. Statistics indicate that there are nearly 12,000 registered users, more than 2,000 daily active users, and more than 6,000 daily visits. It can effectively enable patient registration, payment, and medical assistance, and answer queries. It also saves time, by reducing outpatient registration, payment, and waiting times, which had averaged at about 50 minutes. It effectively improves the convenience of medical treatment, and fulfills the promise of “let the data run more, and the people run less.” [Scene 4.7] Online treatment. Mr. Zhu has been suffering from chest tightness, palpitations, and other symptoms for over two months. As he seldom goes to the hospital, he is not familiar with the treatment process. After consulting a doctor friend, he installs the AHJU online app and inputs his personal information. After online guidance, Mr. Zhu makes an appointment with a cardiology expert. After arriving at the hospital on time, he pays for the examination online on the way to the electrocardiography (ECG) room. The examination results are immediately sent to his mobile phone. With the doctor’s drug prescription, he easily completes the online payment and goes to the pharmacy to get the medicine. Mr. Zhu says that this time, the whole process was “fast and convenient.” [Scene 4.8] In Community hospital. Because of chest tightness, Ms. Wang goes to the community hospital for an examination. The doctor suggests a computer tomography (CT) scan. Under the medical staff’s guidance, she quickly makes an appointment online and arranges to go to AHJU for the CT scan the next morning. Ms. Wang says, “What cannot be solved in the community hospital can be solved here. If you cannot get the examination, you can make an appointment directly with the hospital. It is very convenient, especially for this kind of examination. In addition, Ms. Wang suffers from chronic diseases such as high blood glucose and high blood pressure. Now, she can order medicine directly from the “cloud pharmacy” in a community hospital, and can also enjoy door-to-door medicine delivery. Chenping Zhu of the Jiankang Road Community Health Service Center says, “The coverage of our community is nearly 115,000, and the annual outpatient volume is 374,000. The residents who come here often have some common or

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chronic disease. There is more hypertension and diabetes in the elderly. Through this mode, it is particularly convenient for residents to address these problems.”

7

Project Staging Plan

At the summary meeting of the Internet hospital project, held toward the end of 2019, Xiaojun Chen recapped the work of the past year, stating, “At present, the construction of the first phase of the project has been completed, the patient’s convenience medical treatment process is running smoothly, and the docking and acceptance work with the unified supervision platform of the Internet hospital for the Jiangsu Provincial Health Commission has been completed. The platform has been recognized by our doctors and a majority of the patients. The second phase of the project is in progress and is scheduled to be completed in October 2020. The third phase is scheduled to be completed by October 2021. Our future goals are as follows.” The first objective is to focus on promoting the construction of phase II and phase III, focusing on the seamless connection of the five treatment centers of chest pain, stroke, trauma, critical pregnant women, and critical newborns with the Internet hospital and pre-hospital emergency center to improve the efficiency of emergency treatment, the function of patients’ electronic health records, and the use of wearable devices. The second objective is to strengthen the promotion and application of the AHJU online platform. Various channels should be used for publicity and promotion so more patients can benefit. The Internet hospital has been launched for a year, with the AHJU online app launching on schedule, and a growing number of users registering and logging in. How can the “Internet plus medical health service” be improved further to more accurately link and satisfy the multi-level, diversified, and personalized health needs of the masses? How can the technological advantages be used to innovate better and take advantage of technologies such as big data, the Internet of Things, AI, and enhance the system’s functions? The problems of the stable operation of the system, quality control management, medical information data security, and technology upgrading remain important in future work as well. Xiaojun Chen started another day’s work with a phased implementation plan on his desk.

Innovation: Organizational Innovation Management

Lotus Island’s transformation in the digital age Choosing the right channel to help boost the sale The promotion of Female entrepreneurs

The innovation concepts JD’s transformation Unique logistics solution paved the way for JD’s success Shifting to AI to learn consumer behavior to foresee future trends

Open Internet media approach as a strategy for Hua Qian Gu’s success Using social media as the shows’ engine Social manufacturing process, based on the ̌Customer as the center̍

Social manufacturing as the game changer for Xiaomi Customers as part of the R&D process Crowdsourcing and cultivating a relationship with the netizens as a strategy for Xiami’s success

Moving Towards Modified Digital Economy: The “Internet Plus” Model Encourages the Foundation and Innovation of “Lotus Island” Guilan Hu

1

Introduction

Since the 1990s, the theory of reproductive health has improved. New concepts and research on reproductive health have been identified, gained attention, and applied internationally at different levels. Recently, the industry of women’s reproductive health has proliferated at an annual rate of 20–30%. Sellers have taken advantage of this opportunity and created various brands and products to exploit this market fully. Consequently, in 1999, Yunjuan Lu, the founder of All-Life Healthy (AllLife Healthy Tech Co., Ltd.), entered the market to explore the opportunities that existed.

2

Establishing All-Life Healthy Tech Co., Ltd.

Yunjuan Lu was experiencing many challenges in Beijing. In 2003, she had been distributing pure plant extraction disinfectants for only 10 days when the SARS epidemic began. She worked day and night during that time with her team and eventually made their first money after repaying her debt. Yunjuan Lu established All-Life Healthy Tech Co., Ltd. (All-Life Healthy) in September 2003. Initially, she hired seven women who had been laid off to work with her and brought them to the Beijing University of Traditional Chinese Medicine for systematic training. The women returned to their jobs with better professional knowledge and the qualified ability to improve sales performance and G. Hu (B) School of Management, Jiangsu University, Zhenjiang, China e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Fan et al. (eds.), Casebook of Chinese Business Management, Management for Professionals, https://doi.org/10.1007/978-981-16-8074-8_14

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enhance customer relationships. Managers of pharmacies who noticed this praised Yunjuan Lu for the professionalism of the All-Life Healthy employees. All-Life Healthy became one of the first qualified enterprises certified for medical sales. In 2007, Beijing had implemented pharmacy merger and acquisition reform by creating chain stores and professional lines. All-Life Healthy won the bid and became the largest supplier channel of over the counter (OTC) products for Beijing chain pharmacies, providing non-drug external products to well-known pharmacies such as Tong Ren Tang, Jia Shi Tang, Golden Elephant, Guo Da, and Yi Bao. The company grew to servicing nearly 1,000 pharmacies in Beijing. It became service provider and supplier to all major chain pharmacies and monomer drugstores. Meanwhile, Yunjuan Lu arranged to hire assistants at the counters, offering opportunities to hundreds of laid-off workers. Due to its outstanding contributions mentioned above, All-Life Healthy was approved by the Beijing Women’s Federation for projects such as the “Internship and Working Base of Beijing Female College Students,” the “Beijing Reemployment Base of Laid-off Women,” and the “Beijing Women’s Employment Demonstration Unit.”

3

A Transformed Manufacturer: A Box of Pads Opens at the Door of a Beauty Salon

After 2007, with the rise in labor costs and decline in channel profits, pharmacies continued to merge because of the impact of the Internet. These combined pharmacies began to connect directly with manufacturers. This meant All-Life Healthy’s profit as a middle distributor shrank, so Yunjuan Lu sought to diversify. Consequently, in 2009, after extensive consideration, Yunjuan Lu purchased the Shanghai Jinrui Group, a leading enterprise in research and development in gynecological care and a pioneer in female reproductive system care, as well as the owner of proprietary technologies and patents of the snow lotus herb. All-Life Healthy obtained the patent rights for production, branding, and the private technology (formulation) of the products and the equipment. The acquisition enabled All-Living Healthy to transform from trading to manufacturing. After owning the formula and undertaking many experiments with countless failures over three years, the company finally produced its first snow-lotus pad in July 2012. During this time, a challenge surfaced regarding the government’s policies concerning Chinese herbal medicines. This government attention drove up the selling price significantly. The snow lotus herb witnessed a sharp increase in price from RMB 50 per kilogram to RMB 600 per kilogram. How could Yunjuan Lu sell her product at such a high price? For three years, the product did not sell well at traditional pharmacies, so she pondered how to solve this. Yunjuan Lu was determined to redirect her business model. She believed that no matter how much it cost, she wanted to interact with end-user customers.

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An interesting incident happened as one of her best friends, who owned a well-known beauty salon in Beijing, was battling with cervicitis. Lu Yunjuan recommended that her friend use her product for free. After three months, when her friend went to the hospital, the doctor indicated surprisingly that she was cured. Her friend called her ecstatically, asking her to sell her product in her beauty salon. At that time, the snow lotus herb was sold only in traditional pharmacies. When Yunjuan Lu took a box of her products to the beauty salon, the manager inquired about the selling price. She answered that a box of six pads was RMB 48; the product was also sold in a nearby pharmacy. The manager laughed and explained that customers in the beauty salon with powerful purchasing abilities attached significant importance to healthcare, so products at such a low price could not be sold there. The beauty salon would not be able to pay the rent or salaries with low-priced products. Yunjuan Lu returned to her home and designed a middle bag containing six boxes of snow lotus pads. She sold one bag at RMB 288 and promoted the concept of reproductive healthcare. She found, incredibly, that the beauty salon sold more than 1,300 bags per month, for nearly RMB 380,000. She realized that this sales success was based on three elements: the right channel, appropriate buyers, and interested customers.

4

Seeking a New “Online to Offline” Model and Establishing Beijing Lotus Island Technology

Although Yunjuan Lu found her product’s market in the beauty salon, she did not believe this was sustainable for future development. Therefore, in September 2012, Yunjuan Lu went through a series of brainstorming with experts for three months and finalized an “Online to Offline” model called Lotus Island. Although an “Online to Offline” model was being advertised by investors, Internet entrepreneurs, and scholars, people still had difficulty understanding it and thought of it as an online website. Yunjuan Lu went to her friend, who worked in group online shopping. Her friend promised to help her design a website and create codes, but only after work. Yunjuan Lu was excited but had to wait until around 10 pm when her friend was ready for her. This continued from September 2012 to March 2013. At the end of December 2012, Yunjuan Lu called more than 20 traditional channel agents in Beijing to attend an “Online to Offline” training session. She told them that in the Internet era, people are in a rush to invest in e-commerce and online shops. However, most products online are manufactured poorly; hence, industries of high quality are in significant demand. For instance, the Chinese go to Japan to buy toilet bowls or to America to buy salt, because of a lack of domestic industries. This scarcity is partly because of a lack of confidence and willingness to start one’s business locally. Yunjuan Lu predicted that the manufacturing industry would reach its golden era in the next five years. She recruited agents to build an online shopping mall together, innovating, sharing, and complementing each other’s strengths. She mapped out a future business model with the desire to

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achieve a common goal. The agents were energized and excited, but also confused. They could not understand why they should start an online business when the traditional offline business was running well. They thought the “Online to Offline” model was intended to eliminate the agents and sell products directly from the manufacturers. In the end, only two agents decided to join in with Yunjuan Lu believing in her reliability. Therefore, they were able to expand their annual sales from RMB 1 million to RMB 20 million, and their offices moved from a rented house of 80 square meters to a real estate area of 500 square meters. In March 2013, the Lotus Island Mall officially launched its new venture. Lotus Island continued to promote products made from snow lotus herbs based on the patents of the Shanghai Jinrui Group. In 2013, at the annual marketing conference of All-Life Healthy, Yunjuan Lu proposed a business model for Lotus Island to guide engineers in implementing requirements, modifying its interface, and testing codes. In early 2014, Lotus Island V.1 was released (Fig. 1). That same year, a shopping mall with accumulated reward points (Fig. 2) was launched. All-Life Living’s industrial upgrading led to the creation of the “Lotus Island— Women’s health industry integrated operation platform.” Its central idea was “tradition plus internet,” namely, using the power of the Internet based on traditional industry. Over the past few years, Lotus Island Mall has invested RMB 60 million online and more than RMB 20 million offline in training. It has trained more than 10,000 women, successfully supported more than 6,000 women in starting their own businesses, and more than 40 women have become millionaires to date. The annual income of the franchisees started is between RMB 300,000 and RMB 500,000.

Fig. 1 Debut of “Online to Offline” model of Lotus Island. Source: Beijing Lotus Island Tech Co., Ltd.

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Fig. 2 The shopping mall with accumulated reward points on Lotus Island. Source: Beijing Lotus Island Tech Co., Ltd.

JD Strategic Cross-Border Expansion–Offering Retail as Strategy Solutions Abroad Dragana Ostic and Bojan Obrenovic

1

Introduction

Starting as a young visionary, Richard Liu had high hopes for his small retail enterprise JD. He imagined that it could grow into a huge e-commerce platform that would allow sellers to supply millions of products to consumers. Technological advancement and the Internet of Things (IoT) have allowed just that. Liu pondered how to differentiate his company from its competitors. Some of the vital issues that plagued him were: whether he could shorten the delivery time for products coming from abroad; and whether consumers could enjoy their items the same day they ordered them. From that, JD started its success journey. The online cross-border e-commerce platform JD Worldwide was set up by Richard Liu to meet the enormous demand in China for imported goods and to help foreign brands gain access to the Chinese market. JD.com is the largest selfoperated e-commerce enterprise in China. JD Worldwide is a new cross-border e-commerce business initiated by JD in 2015. This initial point-of-sale for foreign brand platforms soon grew in size and resources by managing its business strategy and infrastructure. Not long after devising JD’s business model, Liu realized its potential could be much more than he anticipated. He quickly switched from selling products to selling services and flagship stores for merchants and brands from all over the world. Companies were no longer limited by the need to acquire licenses, set up offshore warehouses, or spending vast amounts of money on costly delivery (Wang, 2014). Liu’s integrated smart channel advertising strategy was so successful that he was able to even resell it later. JD and the innovative media group Xinchao

D. Ostic (B) · B. Obrenovic School of Finance and Economics, Jiangsu University, Zhenjiang, China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Fan et al. (eds.), Casebook of Chinese Business Management, Management for Professionals, https://doi.org/10.1007/978-981-16-8074-8_15

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set up a plan to supply merchants and brands with novel omni-channel marketing solutions by joining the big-data-driven precision marketing expertise of JD with the offline marketing resources of Xinchao. The idea was to leverage JD’s IoT and data management, together with 600,000 smart elevator screens covering 103 cities and 45,000 residential areas. JD began to market full-service package solutions modeled on Chinese examples to foreign enterprises. From all over the world, foreign brands started setting up accounts on JD’s online malls, forming partnerships, buying JD’s cloud solutions, and outsourcing logistics and warehousing activities to the company. It became possible for brands to participate in market activities and sell products and services to foreign consumers without creating an onshore company. Leveraging smart technology, artificial intelligence (AI) solutions, self-owned logistic networks, drone delivery, and the popularity and reputation the platform afforded, Richard Liu soon launched joybuy.com, a cross-border e-commerce platform dedicated to exporting Chinese products worldwide (Liu, 2020). To overcome common problems that foreign retailers face, JD created a unique business model among the top e-commerce worldwide platforms (see Fig. 1). For instance, despite its large size and market share the platform still acts as a reliable access point for small businesses. In addition, JD set up a cross-border website in 2015. The company has over 5,000 delivery and pickup stations, buys inventory from global organizations, and then resells it to consumers (Smith, 2018). JD Worldwide hosts flagship shops using an online marketplace design similar to that of Tmall Global. For instance, Walmart has obtained an advantage in entering the Chinese consumer market by using the power of JD.com for logistics, technology, and customer service. Mr. Liu was quite surprised by the progress of his company and its achievements over the past years. As the founder of JD.com (NASDAQ: JD), he now has over 15 years of experience in retail and e-commerce. When he first started his business in 1998, his company was distributing magneto-optical products. In January 2004, Liu launched his first online retail website, which eventually became JD.com later that year; he has guided the company’s development ever since (Liu, 2020). By building a partnership with giant companies, such as Walmart and Google, JD.com has made an effort to reach more foreign customers. Two years ago, JD and Walmart became strategic partner, enabling Walmart to expand customer resources and supply chain integration in the People’s Republic of China (PRC). In 2018, the company formed a partnership with Google to explore nextgeneration retail infrastructure solutions. Through this, the technology of Google and the logistics and supply chain of JD were combined. Furthermore, via Google Shopping in America, JD.com now offers several types of quality products from the PRC. Applying AI realistically, JD has developed smart solutions that have spurred growth in retail. As a result of both affordable and quality technology, sales have increased, consequently, Richard Liu has been able to offer his clients ancillary goods they can appreciate.

Fig. 1 Differences between Traditional Model and Boundaryless Retail. Source: jdcorporateblog.com

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Company Profile

Following the mission and core values Mr. Liu set out more than 20 years ago, JD now offers consumers a superior shopping experience through its user-friendly website, native mobile apps, WeChat, and Mobile QQ entry points (Smith, 2018) (see Fig. 2). The company was launched as an offline electronic goods retailer and transformed into online activities after the SARS crisis of 2004 (Liu, 2020). JD Worldwide, set up by JD.com, is a global cross-border e-commerce platform that delivers products from any international brand directly to consumers. As JD’s head of global development Cui stated, JD’s outbound business vision was to “shop, sell, and deliver globally.” Within two years of its inception, JD Worldwide registered billions of RMB sales annually. Created in 2015, JD Worldwide leveraged the user base on JD.com, posting nearly 10 million SKUs (stock-keeping units) of about 20,000 brands. The company sent country-wide e-mails showcasing products from Asia, Europe, Australia, and America, thereby generating triple-digit sales and expanding its operations. Following this expansion, the company soon became the third-leading internet company in the world. The JD Worldwide structure is split into national and regional areas, with the international e-commerce platform focusing on exports. This platform has centers in Europe, North America, Australia, New Zealand, Korea, and Japan. In these countries, online sellers buy goods from manufacturers directly and resell them

Fig. 2 JD’s mobile engagement through the Tencent Partnership. Source: jdcorporateblog.com

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via online shops. In 2015, JD.com joined the Vietnamese e-commerce platform Tiki’s C after establishing the Indonesian subsidiary, JD.ID. Currently, the company has the most extensive fulfillment infrastructure of any e-commerce company in China. As of March 31, 2017, JD.com operated seven fulfillment centers and 263 warehouses covering 2,672 counties and districts. JD.com is a Fortune Global 500 company and on the NASDAQ100. JD’s partners include key players such as Walmart, Google, and Tencent. JD has focused on developing a robust and scalable platform that not only supports its rapid growth, but also allows it to provide cutting-edge technology and services to its partners and customers. Two business segments, the JD Mall and New Businesses, are at the core of the company’s operations. The JD Mall segment represents its e-commerce business and New Businesses cover logistics services targeted at third parties, foreign business, insurance, and technology services. The platform enables users to access a wide range of products manufactured in China, including famous brands such as Xiaomi, Huawei, OPPO, Midea, and VIVO. Joybuy.com services citizens of 23 countries from all continents. The company’s full-service package aimed at foreign markets includes smart sales, advertising, and logistics solutions based on the successful model in China. The JD.com logistics system provides fast delivery to any city in China and several other areas outside these cities. Such services include either same or next-day delivery if the area has more than 600 million inhabitants (Liu, 2020). However, when the destination is remote and the infrastructure is inappropriate, delivery can be difficult, leaving customers dissatisfied with their online shopping experience (Aryapadi et al., 2020). To address this, the JD drone program was created. Its aim is to provide remote rural terrains with modern e-commerce. In the program, orders are collected from regional delivery points by a network of “village promoters” (more than 300,000 promoters in China), who then deliver to clients in both a shorter time and at a lower price. The average time for JD consumers to receive orders from anywhere overseas is between 5 and 10 days—much faster than average cross-border delivery. Considered as the one e-commerce company worldwide to operate small-tomedium-sized, oversized, cross-border, chilled, frozen, cold chain delivery, and B2B warehousing facilities, JD has a network of 219 warehouses in China. With such diversified facilities, the company stores more stock and has increased delivery speed. The head of JD Global Sales, Chris Cui, indicated that because certain brands have problems accessing foreign markets owing to costs; JD regularly helps them with warehousing, marketing, customer services, and logistics. For this reason, by using the JD platform, brands can assess their popularity and custom design their products to suit local tastes before increasing their overseas investments.

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The Rise of the Company

Before JD, few Chinese customers used stand-alone or third-party websites to buy foreign goods. At that time, international brands faced severe issues, such as exorbitant shipping costs, delayed deliveries, regular customs difficulties, and the unavailability of customer services (Islam & Zunder, 2013). By devising a unique logistics solution (see Fig. 3), Richard Liu paved the way for JD’s success. Although shipping products from one place to another was feasible, import licenses, various regulations, and product registration rendered the process onerous (Accenture, 2012). An inadequate Chinese logistics infrastructure at that time prompted Richard Liu to set up in-house logistics powered by AI and high-tech systems (Liu et al., 2015). Today, 90% of company orders are delivered either the same or next-day (Li, 2020) and 99% of Chinese citizens use this network to buy foreign goods. All of JD’s technological innovations are designed at its automation JD-X laboratory. This laboratory focuses on modernizing existing smart technologies, autonomous delivery transport, drones, and intelligent warehouses. JD is a pioneer in using drones in e-commerce. JD delivery management is also more affordable and faster. The automated system seamlessly connects to the logistics system, where robotic vehicles can carry as many as 30 parcels and deliver them within a 5 km radius. These vehicles can also plan routes, recognize stoplights, and avoid hurdles. When working at full capacity, the delivery points can take up to 2,000 packages to buyers daily, using 50% delivery robots and 50% couriers. In the end, the users can obtain their parcels safely thanks to facial recognition technology. By setting up e-commerce logistics and warehouse networks, the company has been able to address complex logistics and high infrastructure prices (Bhuiyan, 2013). For instance, now, goods are kept in and delivered from distribution stations via online platforms (Straube, 2004). Companies can sell to a hypermarket through a procurement manager (the person to negotiate the prices), with no need for overseas companies to monitor the distribution or manage the flagship shops on the e-commerce platform. JD deploys a retail strategy as a service, allowing other companies or industries to lease the company’s technology and infrastructure (for example, underutilized warehouse space). This practice increases the use of real estate, making the logistics industry more productive. Another advantage is that partners can use co-branding and choose the super-efficient delivery service of JD, with the goods marketed as “Delivered by JD Logistics.” By realizing its potential initially envisioned by Mr. Liu, gradually but steadily JD has become a cross-border ecommerce giant, offering not just intermediary services and e-presence for foreign merchants, but also full-service marketing, management, and logistics solutions. Its progress has been remarkable, even beyond anything Richard could have ever imagined. From establishing its presence and reputation in China, forming lucrative partnerships with the world’s leading retail and technological companies, and replicating its most efficient strategies abroad, JD has become a true success story.

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Fig. 3 JD Logistics timeline. Source: jdcorporateblog.com

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By crossing international boundaries, it has managed to make its infrastructure and strategy indispensable even in foreign markets (see Fig. 4).

Fig. 4 Cross border e-commerce platform. Source: jdcorporateblog.com

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Next Steps

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Product Diversification

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The more the company grew, the more time and money it spent expanding and modifying its retail portfolio. Mr. Liu found it essential to diversify the product line to expand the popularity of the business. Currently, the company offers more than 10 product categories via its online retail platform directly, including home appliances, computers, and furniture. A joint venture marketplace, Yihaodian, was created to provide well-off customers with high-quality imported products. All of these activities were executed after the company realized that success lay in a combination of diverse product offered via online and world-class retail business standards.

4.2

New Technology

JD Worldwide uses AI in practically all areas of its business—from marketing to management. These tools include algorithms for learning consumer behavior to foresee future trends and creating speech recognition and voice fingerprinting technology to allow consumers to shop online using voice commands. In addition, JD devised a smart supply chain management solution that supports the design, planning, implementation, and control of activities using current data, blockchain, natural language processing, machine learning, IoT, deep learning technologies, and image and vision recognition. All of these services are necessary to compete in the global market (Gunasekaran & Ngai, 2003). Leveraging its potential, JD is now leasing resources and expertise to companies without sufficient capacity and those in need of an effective sales strategy.

4.3

Cloud-Based Expansion

Further, JD developed a cloud-warehouse management solution using AI to improve retail productivity. Many small- and medium-sized businesses in China are modifying their supply chains with the company’s technology and supply chain knowledge to improve current warehouse management systems. The initiative deploys big data to help partners foresee inventory demand and supply and efficiently structuring warehouses by employing JD smart supply chain open solution for merchants. The key to success for overseas companies is to engage actively with mainland collaborators. JD cites the following success story as an illustration of the above statement. One of Hong Kong’s health supplement brands selected standard products and an operating team in mainland China in its initial stages. It visited the offices of JD.com in Hong Kong and Beijing to meet staff and exchange ideas

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about how to improve exposure on the front page. Based on many years of experience and consumer data analysis, JD’s team made several recommendations to help the company achieve exceptional sales growth. The success was achieved by improving the hit rate via flash sales, sales promotion, and operations integration. Richard Liu knew that the next steps were crucial if the company was going to continue to grow. What should he do next to retain a competitive edge? How could he leverage JD’s strategy and resources in foreign markets? JD is engaging in well-thought out strategic partnerships with foreign brands. Which companies can provide JD with new partner opportunities? What sectors will align best with JD’s current operations?

References Accenture. (2012), European Cross-border E-commerce: The Challenge of Achieving Profitable Growth, Dublin: Accenture Publications. Aryapadi, M., Ecker T. and Spielvogel, J. (2020). Future of retail operations: Winning in a digital era. McKinsey & Company. Bhuiyan, M.N.K. (2013), Application of E-SCM Strategies to Enhance Efficiency and Effectiveness in the Clothing Retail Sector, Industrial Engineering Letters, Vol. 3 No. 10, pp. 11–21. Gunasekaran, A. and Ngai, E.W.T. (2003), The successful management of a small logistics company, International Journal of Physical Distribution & Logistics Management, Vol. 33 No. 9, pp. 825–842. Islam, D.M.Z. and Zunder, T.H. (2013), Issues of eLogistics Applications for Varying Stakeholders: Findings from an Online Survey, European Transport Research Review, Vol. 5, pp. 65–78. Li, M. (2020). In-depth report: Shop, sell & deliver globally with joybuy.com. JD Corporate blog. https://jdcorporateblog.com/in-depth-report-shop-sell-deliver-globally-with-joybuy-com/ Liu, R. (2020). In-depth report: In retrospect and outlook: How JD made it. JD Corporate blog. https://jdcorporateblog.com/in-depth-report-in-retrospect-and-outlook-how-jd-made-it/ Liu, X., Chen, D. and Cai, J. (2015), The Operation of the Cross- Border e-commerce Logistics in China, International Journal of Intelligent Information Systems, Vol. 4 No. 2, pp. 15–18. Smith, J. (2018). Chinese Retailer JD.com Turning Its Logistics Network Into Broader Delivery Service. The Wall Street Journal. https://www.wsj.com/articles/chinese-retailer-jd-com-tur ning-its-logistics-network-into-broader-delivery-service-1539833400 Straube, F. (2004), e-Logistik, Berlin-Heidelberg-New York: Springer. Wang, J. (2014), Opportunities and Challenges of International e- Commerce in the Pilot Areas of China, International Journal of Marketing Studies, Vol. 6 No. 6, pp. 141–149.

Operations of the TV Series Hua Qian Gu Jingzhao Yang

1

Introduction

Hua Qian Gu, whose English translation is The Journey of Flower, is a famous TV series in China (see Fig. 1). It was adapted from the published novel of the same name written by Fresh Guo Guo. After it was released in June 2015, there have been wave after wave of reviews. By the end of 2015, the total number of views of the show exceeded 20 billion, and its single-episode ratings had the highest weekly record of a Chinese weekly series at that time. Hua Qian Gu won the 2015 National Drama Festival annual top 10 influential TV series award, and was awarded the title of “Drama king of the year” at the “Scream 2016 Iqiyi night”. Hua Qian Gu was also nominated for best TV series at the 22nd Magnolia Awards in 2016. The series won the 11th TV production industry’s “Excellent TV drama works” award in February 2017. Although the TV show was broadcast for less than a month, its mobile game, with the same name launched by Tianxiang Interactive Research and Development, landed in the app store and ranked among the top three of the free, best-selling iPhone apps within 10 days. Tianxiang interactive, Yunpeng, made a public announcement in July 2014 that the daily number of new users of the Hua Qian Gu mobile game had reached more than 1 million. Total active users had already broken the 10 million level. Its monthly bank flow reached about 200 million, and the surrounding industries and derivatives generated huge profits because of the driving effect of the TV series. Compared with other Xianxia dramas adapted from online novels, Hua Qian Gu can be considered unique, making people wonder about its outstanding achievements (Sarmah et al., 2018).

J. Yang (B) School of Management, Jiangsu University, Zhenjiang, China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Fan et al. (eds.), Casebook of Chinese Business Management, Management for Professionals, https://doi.org/10.1007/978-981-16-8074-8_16

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Fig. 1 Hua Qian Gu, the famous TV series in China. Source: Publicly available information online

2

Before Production—“Make the Cocoon into a Butterfly”

2.1

Original Novels Are Popular at Home and Abroad

Hua Qian Gu, an online novel, was serialized in May 2008 with a total of 820,000 words. A large audience followed it during serialization. The reading of each chapter reached more than 1 million listeners, with a total score as high as 580 million. It was officially published and issued in 2009, fully supported by the serial’s fans, and quickly collected many new readers as well. Its popularity spread abroad; in 2010 and 2013, traditional Chinese, Thailand, and Vietnam versions were published, and revised editions were reprinted in 2013 and 2014. Notably, 70% of its fans are female, and most are very young (Zou, 2015).

2.2

Appeal to Film Production

As most readers welcomed the novel, the demand to make it into a TV series increased. A film and television culture company responded to the request and made the novel into a film. The most crucial step in the preparation process was the selection of actors. The main actor and actress cast in Hua Qian Gu were Jianhua Huo and Liying Zhao, based on star exposure rate, role compliance, audience devotion, and fan expectations. Jianhua Huo, the lead actor, has many fans and a good reputation among audiences. Recently, TV shows he participated in have received high ratings. Among them, “Xiao Ao Jiang Hu” won its period of provincial satellite TV ratings, and “Battle Changsha” ranked first among 2014

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Douban films. Every TV show starring Liying Zhao has had a high audience rating as well. She is called the “Audience Queen”. In May 2013, Hunan Satellite TV broadcast the “Lu Zhen legend”, and in 2014, the “Boss & Me”. Liying Zhao also performed very well in 2014, ranking first with 21,894,667 votes at the 10th Golden Eagle Festival, which has a significant star effect. Fans of the novel Hua Qian Gu expressed their strong approval and expectation of the casting decisions (Zhang & Mo, 2017).

3

In Production—Audience “full Participation in National Production”

3.1

Network Builds Momentum

Before the official release of Hua Qian Gu, the organizers conducted an online campaign to attract audience participation. The production team first launched a high-definition pilot into the market for fans to download. With the influx of character-based films in the market, fans have showed growing enthusiasm for these shows and a high sense of participation. Simultaneously, the producer attracted fans to participate in TV series-related activities, such as a long-stay summer interest class, which significantly increased fan attention on the actors along with their expectations of the show (Lee & Kim, 2017). The Hua Qian Gu production team held more than 10 advanced showings in Beijing, Shanghai, Guangzhou, and Dalian, among many other first-tier cities before its release. Other 3D film shows played a significant role in promoting the production of the show as well.

3.2

Benefit by Mutual Discussion

Hua Qian Gu production also held a global lyrics and music competition, which effectively attracted significant musical talent, inspiration, and penetration. A theme song “The end of time” was created by netizens. Netizens were provided materials for grumbles and adaptations while they provided topics and ideas related to the plot’s development so that they could re-create and re-ferment the plot. In Weibo, it stayed among the top rankings on its hot list for a long time. During that summer, there were endless posts, microblogs, and spoof videos of Hua Qian Gu, concocting plot content, triggering netizen discussions, providing innovative materials, and encouraging fans to participate. Notably, the production team held a Hua Qian Gu Face Changing Contest. Winners were filmed with the stars and experienced actors’ lives, after which they could change their faces through 3D technology (Ruan & Zhao, 2017). The extensive fan participation has transformed the traditional mode of producing TV series while expanding the show’s creative ideas.

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Fig. 2 Three-link interactive show development process. Source: Prepared by case writers

Hua Qian Gu relied on extensive online interaction and audience participation, using the knowledge and power of netizens to complete the show (Hajli et al., 2017). The cost of obtaining design ideas for games, animation, and advertising was extremely low or nearly zero. At the same time, users participated in the production process through social media. Consumer ideas were directly converted into products to accommodate, “what they want is what they get”. In this context, social media was the “relationship chain”, the user relationship the “accelerator”, and the show the “engine.” (see Fig. 2) By involving users in product design, development, and marketing, the online production and communication with users grew stronger, encouraging the role of enthusiast users, and continuously improving quality and user satisfaction.

4

After Production—Parallel Management

The Hua Qian Gu crew mainly used multi-screen interactions of “TV screen + computer screen (website) + mobile screen (mobile phone screen + PAD screen)” to achieve a highly coordinated interaction for “TV + Weibo” (Liu et al., 2017). This enabled the interoperability of all platforms for the online novel and games, completing parallel management of the entire chain.

4.1

“TV + Microblog” Network Linkage

The TV station broadcasting Hua Qian Gu cooperated fully with various media, interacted with the audience in real time, obtained the audience’s response, and completed the series production and broadcast (see Fig. 3). Hua Qian Gu was

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Fig. 3 The realization process of social manufacturing. Source: Prepared by case writers

scheduled to be released in summer, close to the target audience holidays. It was easy to promote discussions of this in Baidu Post and on Weibo. The crew prepared related content and released various spoof videos, constantly throwing out topics and ideas, creating discussion and grumbles on the plot. The timely release of HD film flowers and trailers were used as production materials for netizens. These attracted participation, fun adaptations, and guided netizens to recreate content and engendered excitement (Gu & Zhu, 2010). Before Hua Qian Gu was released on Hunan Satellite TV, the TV station signed an agreement with Sina Weibo to continuously launch Weibo activities during the show to create continuous participation and discussion (Luo et al., 2017). For example, Sina established the “Seven-Kill School” and “Changliu School” that netizens could choose from according to their preference and practice using daily check-in. The competition between the two schools then became the basis for future duels. Sina organized a duel every other week. The winner received an exclusive Hua Qian Gu gift from Weibo to inspire fans to continue their efforts and continue paying attention. Sina also launched a “weekly task” to arouse netizen enthusiasm and increase the popularity of Hua Qian Gu in many ways, such as allowing netizens to vote on popular topics. The Hua Qian Gu official Weibo account counted the number of students of each school every week, and encouraged everyone to fight side-by-side with the leading actor Changliu fairy Master Zihua Bai, guarding the fairy world, or kill the demon Master Qianmo Sha, protecting Xiaogu (the lead actress). It formed a lively and fervent scene every week on Weibo’s hotlist. Weibo continued to launch topics related to the TV series, increasing attention through TV series lists, hot topic lists, real-time hot search lists, films, and television hot search lists, among others (Palma et al., 2019).

4.2

Series Game Development

Although the TV show was broadcast for only a short time, its mobile game with the same name landed in the app store. The Hua Qian Gu game retains the main

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Fig. 4 “Customer as the center” social manufacturing process. Source: Prepared by case writers

plot of the TV series, and employs the novel’s writer, Fresh Guoguo, as the game’s chief plot architect. The plot of the Hua Qian Gu TV series has the element of “breaking through barriers” (Song et al., 2019). For example, Hua Qian Gu’s entry into Changliu Xiuxian, the Taibaimen battle, the Liancheng investigation, and so on, and the continuous killing of demons as the locations change. The game adapts Hua Qian Gu’s experience into independent chapters, such as “The poison of Bu yuan” and the “Shaobai mystery”. The Shaobai mystery restores the TV drama’s plot in the game and attracts fans to review the brutal journey in the TV series. These chapters can only be started after successfully breaking through previous barriers, strengthening the fighting and fighting characteristics of the game, and arousing the player’s desire to continue and upgrade. Besides restoring the wonderful plot of the TV series, the game also restored deleted plot elements, which attracted fan attention to the game and made up for any regrets in the game world. Figure 4 is the social manufacturing process, based on the “customer as the center” (Kim, 2013).

5

The Way to Success

First, from the novel made into a TV show and then adapted into a game, the secret of Hua Qian Gu’s success was that it absorbed and retained the essence of the original work. It was adapted and enriched according to the different media and artistic attributes of the TV series and the games, having the same content reflected in the TV show and the games, thereby attracting the audiences and migrating the TV audiences to the game. Therefore, the work served as a high-level interaction with the audience throughout the entire process. Second, Hua Qian Gu had in-depth collaborative industrial links, as well as close cooperation in production, marketing, and publicity, among other links. It pioneered the exploration of the “drama and tourism link”, providing experience

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Fig. 5 “Customer at the center”: changing the role of customers. Source: Prepared by case writers

and a reference for film and television producers and game manufacturers (see Fig. 5). This positive interaction between a domestic show and electronic games can provide a model for the production of high-quality TV series in a market. In addition, it provided an important method for supply-side structural reform in the TV drama industry and even in the game manufacturing industry.

References Gu, J. and Zhu, Z. (2010), Knowing Wuli, sensing Shili, caring for Renli: methodology of the WSR approach, Systemic Practice and Action Research, Vol. 13 No. 1, pp.11–20. Hajli, N., Shanmugam, M. and Papagiannidis, S. (2017), Branding co-creation with members of online brand communities, Journal of Business Research, Vol. 70, pp. 136–144. Kim B. (2013), Review of social manufacturing technology on product life cycle management, Journal of the Korean Institute of Industrial Engineers, Vol. 39 No. 3, pp. 156–162. Lee, S. and Kim, B.G. (2017), The impact of qualities of social network service on the continuance usage intention, Management Decision, Vol. 55 No. 4, pp. 701–729. Liu, C.S., Guo, J.H., Jin, H. and Chen, J. (2017), Research on the safety risk management and control model for enterprise based on WSR methodology—case analysis of “11·22” Sinopec oil pipeline leakage and explosion accident, Management Review, Vol. 29 No. 1, pp. 265–272. Luo, J.Q., Li, W.P. and Zhao, Y.P. (2017), A WSR-based research on the state and evaluation of manufacturer’s service derivatization, Management Review, Vol. 29 No. 6, pp. 129–140. Palma, F.C., Trimi, S. and Hong, S.G. (2019), Motivation triggers for customer participation in value co-creation. Service Business, Vol. 13 No. 3, pp. 557–580. Ruan, P.N. and Zhao, Y.Q. (2017), Research on user demand identification based on open innovation community—Taking Millet Community as an example, Soft Science, Vol. 31 No. 12, pp. 20–24. Sarmah, B., Kamboj, S. and Kandampully, J. (2018), Social media and co-creative service innovation: an empirical study, Online Information Review, Vol. 42 No. 7, pp. 1146–1179. Song, L.F., Liu, S.S. and Song, Y.F. (2019), Research on enterprise platform business model from the perspective of redundant value sharing: Taking Haier, Mi and Handu Group as examples, Chinese Journal of Management, Vol. 16 No. 4, pp. 475–484. Zhang, B. and Mo, Y. (2017), Domestic dramas and video games: from text adaptation to industrial linkage—discussion based on “Gu Jian Qi Tan” and “Hua Qian Gu”, China Television, Vol. 10, pp. 55–60. Zou, P.Y. (2015), The successful way of the adaptation of the film and TV series of the network novel “Hua Qian Gu”, View on Publishing, Vol. 13, pp. 88–89.

Xiaomi Mobile Phone’s “Social Manufacturing” Journey Jingzhao Yang

1

Introduction

Xiaomi, founded in April 2010, is an internet company with mobile phones, intelligent hardware, and an Internet of Things (IoT) platform as its core business. Its vision is “making friends with users and being the coolest company in user’s hearts”. The company is continually innovating and pursuing the highest quality, thereby creating exceptional growth. After only seven years of operation, Xiaomi’s annual income exceeded RMB 100 billion. In 2018, Xiaomi’s business covered more than 80 countries and regions around the world. On July 9th of that year, Xiaomi was successfully listed on the Hong Kong Stock Exchange, becoming the first listed company with different share rights. It was the largest initial public offering (IPO) in technology segment in Hong Kong history and the third-largest technology share IPO in the world at that time. Today, Xiaomi is the fourth-largest smartphone manufacturer globally and is in the top five mobile phone markets in more than 30 countries and regions, particularly in India, which has had the highest mobile phone shipment volume for five consecutive quarters.1 Through its unique “ecological chain model,” Xiaomi has invested and nurtured more likeminded entrepreneurs. Meanwhile, it has built an IoT platform connecting more than 130 million intelligent devices. Undoubtedly, Xiaomi’s growth has benefited from its mission; that is, making quality products that “touch people’s hearts at reasonable prices” to enable everyone in the world to enjoy a life enhanced by science and technology. Xiaomi’s philosophy of keeping users in mind and its unique management strategy are the secrets to its success. J. Yang (B) School of Management, Jiangsu University, Zhenjiang, China e-mail: [email protected] 1

https://www.mi.com/about.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Fan et al. (eds.), Casebook of Chinese Business Management, Management for Professionals, https://doi.org/10.1007/978-981-16-8074-8_17

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Focus on User Experience and Complete Crowdsourcing Mode

2.1

Crowdsourcing Model Centered on the User Experience

Xiaomi’s mobile phone operating system, MIUI, has been developed with the assistance (or dominant influence) of many Xiaomi fans in a completely free and open environment (Dong & Chen, 2014). The MIUI system continues to be updated every week, with the updates announced online. Xiaomi users can submit relevant questions, solutions, or suggestions online. Moreover, the application functions are chosen based on user voting. Consequently, the system’s monthly active users increased 41.7%, from 146 million in June 2017 to 206.9 million in June 2018. To improve users’ trust and reliance, Xiaomi has been selecting users with high points to try its new phones before they are released, and quickly dealing with problems or modifications suggested by these users, generally within a week. User points are calculated based on user postings, for example. That is, Xiaomi users can create or improve functions and discover bugs according to their own needs, which realistically achieves, “What you want is what you get.” The development process is illustrated in Fig. 1.

2.2

Crowdsourcing Model Improves Products

Xiaomi adopted a “crowdsourcing” model when developing the MIUI operating system in 2010, collecting opinions through interaction with fans on the Xiaomi

Fig. 1 The working process of Wuli-Shili-Renli (WSR) methodology. Source: Prepared by case writers

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forum, updating the system versions frequently, namely, every week, and making improvements in the product. Xiaomi’s research and development (R&D) team also followed this model. Certain ideas were disclosed to users in advance through the forum before new functions were developed, or one to two weeks before the official version was released to let users vote on what they needed. Users also play an active role in Xiaomi phones’ reproduction and product testing, and present questions and/or suggestions during the development of new products, which effectively promotes Xiaomi phones’ updates. The update process is “users updating their phones—defects feedback—system improvement—version updating—defects feedback—continue to improve”. For example, the MIUI system was launched with a major version and a minor version. The major version is updated once a year. On May 31, 2018, the latest major version, MIUI 10, was launched. The minor version of the MIUI includes a stable version and a development version. The stable version is updated from time to time, while the development version accepts user opinions and is updated every Friday. For instance, Xiaomi now has a lockless system-updating function. There was no such function initially, as Xiaomi believed it could cause trouble for subsequent services. However, many Xiaomi fans on the Xiaomi forum asked during the R&D process that Xiaomi phones provide a free system updating function. In respect for users’ needs, Xiaomi now provides users with the ability to freely change their systems in the final version. According to a report released by the official Weibo account of the Mi Game Center, the total number of Xiaomi games downloaded in the first half of 2015 was 667 million.2 Many active participants have contributed to this highly personalized characteristic of the MIUI operating system. Xiaomi has transformed social demand into social manufacturing to achieve real-time interaction between the company and cyber movement organizations (CMOs). CMOs represent customer movement organizations (Hamalainen & Karjalainen, 2017). Through netizens’ movements, the company can accurately grasp customers’ diverse needs and attract customers to join the production process (Jiang et al., 2015). Therefore, the key to this process is the role of “Ren” (people), who are part of netizens groups as shown in Fig. 2.

3

Methods for Parallel Management

3.1

Proactively Contact Users

Xiaomi has organized correspondence teams on forums such as Weibo, WeChat, Space, and Tieba (which means “online posting”). About 20% of these teams focus on content and 80% on customer service. Many team members are “hardcore players” in the original Xiaomi forum, and most have product management background. They have a strong understanding of Xiaomi’s MIUI system and product

2

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Fig. 2 Conversion of social demand into social manufacturing capability. Source: Wang, F.Y. (2009)

functions and can interact with users to identify product needs and the feasibility of user demands. All founders and executives of Xiaomi Company are self-made media stars. Additionally, frontline employees also play the role of “chief marketing officer”. Frontline employees become nodes in the corporate network and directly interface with consumers on social media. The main task of the social media customer service operation team is to manage Xiaomi service feedback and tracking on Weibo, understand user needs and consumer psychology, quickly determine the functional failures of the mobile phone, respond to all users’ questions about the phones quickly, and understand user satisfaction with Xiaomi mobile phones and fragmented demand (Jiang et al., 2016).

3.2

Establish a “Xiaomi Fan” Circle

Xiaomi has used social networks to establish various platforms, such as QQ space, forums, APPs, and WeChat public accounts. The company then distributes as well as receives personalized mobile phone news on these platforms. Both the Xiaomi Weibo and WeChat accounts have many fans, and a large number of Xiaomi customers leave messages on the WeChat account every day. The company’s position is to focus on enthusiast hobbies and mobile phone users. In this way, it maintains frequent online interactions with users. The system can reply to frequently asked questions, while most complex messages are answered individually by the customer service staff. Statistics show that according to the WeChat public account information and user feedback, up to 70% of Xiaomi phones’ news is opened for reading. Xiaomi uses social media to interact frequently with users and capture a large amount of information. It has proven through practice that efficient communication depends not only on the number of links but also on the number of active fans.

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Xiaomi’s MIUI users come from all over the world. The company allows users to recompile and customize its MIUI systems. This open strategy has attracted many domestic and foreign enthusiasts to develop and disseminate MIUI systems in depth. With user participation, Xiaomi has released English, Spanish, and Portuguese versions of MIUI. Xiaomi phones use “identity” as a way to expand user links. The company strengthens the identity between Xiaomi phones and users by organizing public relations activities, such as “Wisdom and Courage, Breaking Through”, and “Let’s Guess”, “Everyone Watching the Conference Live Broadcast”. As a classic case of cooperation when the Mi Phone 1 Youth Edition launched, Jun Lei, the founder of Xiaomi phones led all executives to appear in an animated micro movie, “150 g of Youth”. On the launching day, the Mi phone youth version became the company’s best-selling model. Users snapped up 150,000 Xiaomi phones within two hours. In terms of product R&D, design, function improvement, and after-sales service, among others, Xiaomi frequently engages in interactive activities on the forum. These include question-and-answer sessions offering prizes, user voting, user reviews, and snapping up mobile phones. The China Depository Receipts (CDR) prospectus of Xiaomi released by the China Securities Regulatory Commission shows that in March 2018, active users of Xiaomi’s latest version MIUI10 reached 190 million (Zhou et al., 2019).

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Consumers Transform into an “R&D Team”

Through online and offline interactions, Xiaomi’s consumers have become members of its R&D team. Through its online sales model, Xiaomi effectively promotes various mobile phone accessories, such as mobile phone back covers, mobile phone stickers, mobile phone pendants, earphone winders, and mobile phone cases. Users can buy accessories on its official website based on preferences and add accessories to their Xiaomi phones to personalize the style of their phones. Offline, Xiaomi also created the Mi Community Zone, an interactive and communication space for Xiaomi fans. It serves as a sales point for Xiaomi phones and accessories and provides mobile phone after-sales service and technical support. To support online promotions, Xiaomi has launched other offline activities, such as city meetings, the Geek Party, and Popcorn and Netizen initiated meetings in the same city. The company has provided users with an online communication and interaction platform, grouped users according to attributes, such as area, arranged offline activities, and related ongoing information. In the event called Popcorn, the main aspects included offline communication meetings of Xiaomi fans and Xiaomi launch conferences. Through carefully arranged activities, the company helps users achieve valuable experiences. For example, specialized personnel produced a video to introduce senior users of Xiaomi phones from different industries and invited these users to walk on the red carpet. The Geek Party event was for users who were keen on researching mobile phones and network technologies. Although the event was

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Fig. 3 The development process of Xiaomi phones based on the “User experience as the center”. Source: Prepared by case writers

small in scale, participants discussed core technical issues, such as screens, CPUs, frequency, power consumption, battery capacity, software compatibility, and software vulnerabilities, indirectly participating in the R&D of the Xiaomi phones (Zhang et al., 2017). The development process is illustrated in Fig. 3. Focusing on user experience, Xiaomi has built a unique operating system, MIUI, according to the characteristics of Chinese users, helping users (enthusiasts) actively participate in the optimization and improvement of its systems. The process has increased a sense of user identity. The company can interact with its fans and thereby disseminate its corporate culture. It has abandoned traditional sales channels and adopted an Internet-based business sales model to increase user stickiness. As it pursues the balance of high quality–cost performance as a competitive advantage, product users are expanding into enthusiasts.

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The Road to Success

The success of Xiaomi has not been accidental. It has followed a strategy from the beginning of its establishment to capture customers’ hearts and gain a large number of loyal fans. Its first step was to appeal to young users, as students and the young in general have a particular preference for mobile phones. This market segment likes to play games, watch videos, and chat on mobile phones. Mobile phones have become a daily necessity among the young. For some, the mobile phone is even a reflection of status. This means that the young may change their mobile phones quickly and are willing to spend money on them. Its second step was using the power of its founders. Jun Lei, the founder of Xiaomi, has been engaged in Jinshan, UCWEB, Fanke, and duoplay.com for many years. He has a strong network and extensive user influence. Through Lei’s network influence, Xiaomi’s mobile phone was able to improve its popularity among its target audience by successfully incorporating many software applications that

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appeal to the young, such as Jinshan Ciba, Fanke, the duoplay.com UC browser, YY voice, WPS, and meter chat. In this way, Xiaomi’s mobile phone quickly captured several loyal Jinshan users and was recognized by this target market. Xiaomi also created a fan group. The establishment of the Xiaomi fan group for “viral” communication has captured many new customers, and these new customers became the first group of fans and promoters of Xiaomi phones. The company was able to launch its mobile phones into the market by creating an identity, a harmonious customer relationship, and focusing on the youth. To date, Xiaomi has filled a gap in the market through the cultivation of netizens, its targeted customers. Notably, Xiaomi has adopted a different organizational structure from that of traditional mobile phone companies. The company’s business is divided into several modules, and an independent leader runs each one. It has adopted a flat organizational structure of “strong specialty and weak management”. There is no complex rank structure. Its structure is basically three levels: the core founder, department leaders, and the employee team. Each team is not large, and if it becomes slightly larger, it is divided into smaller teams. Such an organization’s operational mode supports an environment that is close to its customers.

References Dong, J.L. and Chen, J. (2014), Seamless open innovation: The product innovation model of Xiaomi in the Internet ecosystem, Science Research Management, Vol. 35 No. 12, pp. 76–84. Hamalainen, M. and Karjalainen, J. (2017), Social manufacturing : When the maker movement meets interfirm production networks, Business Horizons, Vol. 60 No. 6, pp. 795–805. Jiang, P.Y., Ding, K. and Leng, J.W. (2015), Service-driven social manufacturing paradigm, Computer Integrated Manufacturing Systems, Vol. 21 No. 6, pp. 1637–1649. Jiang, P., Ding, K. and Leng, J. (2016), Towards a cyberphysical-social-connected and serviceoriented manufacturing paradigm: Social Manufacturing, Manufacturing Letters, Vol. 7, pp. 15–21. Wang, F.Y. (2009), Additive manufacturing and intelligence industry: 3D printing, human search, social computing and social manufacturing, Beijing: Social Computing and Parallel Management Center of Chinese Academy of Sciences. Zhang, Y., Li, B.X. and Liu, J.P. (2017), Model and mechanism of customer participation in brand value co-creation under network environment: A case study of Xiaomi mobile phone, Journal of Beijing Technology and Business University (Social Sciences), Vol. 32 No. 1, pp. 61–72. Zhou, W.H., Chen, L.Z. and Deng, W. (2019), Value co-creation process model among entrepreneurial platform, entrepreneurs and customers: A case study of Xiaomi entrepreneurial platform, Management Review, Vol. 31 No. 4, pp. 283–294.

Teaching Notes for Management Case Samples

Teaching note for the smart Internet hospital case Understanding the concept of business process reengineering in the medical industry Analyzing a complex information system from a systematic and engineering perspective

Teaching note for the person and job matching case Understanding the concepts, methods, and measures of financial data management of large enterprises Understanding the key approaches of building cross-departmental team processes and integrated department connections in the context of change Understanding the ways of using appropriate tools to describe, analyze, and evaluate a department or position in a company

Teaching Note for the Smart Internet Hospital Case: The Building Process of the AHJU Internet Hospital Jia Ke

1

Teaching Objectives

(1) Applicable courses: Management Information Systems and other related courses. (2) Applicable object: This case is applicable mainly to undergraduate, MBA, EMBA, and graduate students of economics and management. It can also be used in lectures on information management, information systems, and other related technology. (3) Teaching purpose: This case describes the development of Affiliated Hospital of Jiangsu University Internet hospital (AHJU online), from online conception to the completion of the first phase of planning. It discusses a management information project through the stages of demand analysis, overall planning, system design, and implementation. Through discussion and case knowledge, students can learn how to analyze a complex information system from a systematic and engineering perspective. Against the backdrop of the application of the “Internet plus medical health”, students are exposed to the connotation and essence of the concept of “Internet plus”. Information technology is advancing business process reengineering in the medical industry. Information centralization and big data from the Internet plus medical health approach create the linkage between information technology and business activities. The necessary series of activities run in parallel to achieve business outcomes while the functions of business data are integrated. The case offers a strong theoretical and practical foundation for the understanding of management information systems.

J. Ke (B) School of Management, Jiangsu University, Zhenjiang, China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Fan et al. (eds.), Casebook of Chinese Business Management, Management for Professionals, https://doi.org/10.1007/978-981-16-8074-8_18

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Discussion Points

Please assign the following questions to the students in advance and ask the students to investigate the relevant information before class to help them become familiar with the case. Students should think about the problems and exchange views in class in depth. The questions are set according to the organization of the case content so that students can grasp it all. (1) Combining the application background of “Internet plus medical health” to understand the degree of information necessary for the management of AHJU, analyze the primary motivation of constructing the Internet hospital, AHJU online based on the existing functional information system of each department, and compare the differences between the Internet hospital and the original hospital management information systems. (2) Based on management information system theory, analyze the entire development process of the AHJU online project and how it achieves information management innovation. (3) Using your real treatment experience, from the perspective of information flow, analyze the entire business function process in the closed-loop system of the internet hospital’s operation. (4) If you were the person in charge of the information department, what new information technologies would you introduce in the system’s design and implementation in the next two to three construction phases? What are the important links that need attention?

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Analysis Ideas

Teachers can use this case flexibly, according to their teaching objectives. An analysis idea for this case is presented here for reference only. (1) Read through the case to understand the overall content. Teachers can guide students to discuss the discussion points further, introduce the background of the Affiliated Hospital of Jiangsu University, background of the medical information system, necessity of launching Internet hospital projects, and development of hospital information and challenges of the concept of “Internet plus medical health”. (2) After gaining an understanding of the current information technology situation in the Affiliated Hospital of Jiangsu University, based on the lifecycle method of management information system development, guide students through an in-depth analysis of the detailed development process and the problems at each stage of the lifecycle method. (3) Guide students in summarizing the problems of and experiences with medical treatment in the case combined with their own medical experiences. Then, ask

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students to install the AHJU Online app and use it. Students can then compare the differences in the two service experiences. Guide students to think about the role of an Internet hospital in medical service process reengineering. Combined with their experience with the functional modules they used, guide students to follow the flow of information in each functional module and summarize the process of the Internet hospital platform’s business processes in the closed loop of the system’s service. (4) Combined with the development of Internet technology and information technology, guide students to think about the problems that may be encountered in the construction process of phases II and III of the project from the perspective of system engineering and consider what information technology can be adapted to meet the needs of the complete implementation of the system to promote innovation in medical services. The detailed analysis ideas and steps of the case are shown in Fig. 1.

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Theoretical Basis and Analysis

4.1

Theoretical Basis

(1) Internet plus medical health Recently, the concept of “Internet plus” technology has become a popular development field. As for healthcare, the changes wrought by information technology are gradually expanding to the medical and health industries. With the application of new technology, the construction of Internet hospitals has become a top priority at many hospitals. In the Internet hospital, the “Internet plus” technology plays an important role. Generally, it comprises three aspects: building infrastructure, information management, and networking equipment. With the help of information technology, the hospital builds an information management system and platform to process all internal hospital information. A two-way interaction between the hospital and the patients is achieved. Through data analysis, the hospital can optimize medical resource allocation and establish an intelligent medical system. Internet medicine includes health education, medical information inquiries, electronic health records, disease risk assessment, online disease consultation, electronic prescription, remote consultation, remote treatment and rehabilitation, and other forms of healthcare services using the Internet. Internet medicine represents the medical industry’s new development direction, which is conducive to solving the imbalance between medical resources and the demand for healthcare in China. It is a medical development mode actively guided and supported by China’s Ministry of Health.

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Knowledge points

Time axis

Before June, 2018 Project background

Requirement analysis

June, 2018 Project requirements An overall plan December,2018 Project planning and design

System analysis and design

October,2019 project implementation

December,2019 Project staging plan

System implementation

System operation management and maintenance

System update, redevelopment and upgrade

Life cycle method of information system development Fig. 1 Case analysis chart. Source: Prepared by case writers

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(2) Lifecycle method for management information system development The lifecycle method introduces software engineering and system engineering into the development of management information systems. Applying the concept of “putting the customer first”, the system is analyzed and designed from top to bottom looking at structure and modularization. Specifically, the entire information system development process is divided into six independent stages: system requirements analysis & overall planning, system analysis, system design, system implementation, system operation & maintenance, and system evaluation & upgrading. ➀ System requirements analysis and overall planning stage The first stage of the lifecycle is initiating the concept of a management information system. Through the investigation and summary, we can obtain the enterprise’s demand for information systems. The main goal of this stage is to decide what kind of management information system to develop that can meet the actual needs of the enterprise, formulate the overall planning of the management information system, and determine the development direction, scale, and process of management information system for the full lifecycle. At this stage, we should understand the system’s organizational structure, the entire business process of the enterprise, and be able to describe the information process of the entire system abstractly and comprehensively. ➁ Systems analysis stage The main task of this stage is a feasibility study and detailed investigation. The feasibility analysis focuses mainly on the following four aspects: economic feasibility analysis, technical feasibility analysis, legal feasibility analysis, and the choice of implementation schemes. The investigation systematically explains the object of study and the problem to be solved, determines the focus and scope of the problem, collects data, analyzes the relationship between various factors, seeks a feasible solution to the problem, establishes various mathematical models according to the nature and requirements of the system, uses mathematical models to compare various schemes, and determines the optimal scheme. Through the analysis, if you are not satisfied with the selected scheme, it can be re-analyzed according to the original steps. If the report’s conclusion is feasible and approved by the senior executives of the enterprise, the system analysis stage can begin. At this stage, developers need to perform a detailed investigation, and a comprehensive and detailed analysis of the current system business processes, data processes, data structures, and system objectives. ➂ System design stage According to the results of the system analysis, this stage uses the ideas and methods of system science, the process of designing a new system to

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meet a goal. The system design includes two parts: the overall structural design, followed by a detailed design. The work includes determining the system’s function, design policy, and method, generating the ideal system and creating a draft, revising the draft by collecting information, generating an optional design scheme, and decomposing the system into several subsystems. It is important to clarify what needs to be processed and transformed in the system and the form, nature, and quantity of the output results. This will clarify the necessary transformation links from input to output in the system and the feedback control mode of the system. Future changes in environmental factors should also be considered. The main task in the system design phase is based on the outcome of the system’s logic function in the system analysis phase. In this stage, we follow the systematic, economical, reliable, and acceptable principles, determine the system’s overall structure, the technical scheme of each subsystem, and put forward a system implementation plan. ➃ System implementation stage This is the process of putting the new system into practice. According to the control structure diagram, database design, system configuration scheme, and detailed design data provided in the system design stage, the main activities are to compile and debug programs, create a complete management system, debug the system, switch between the old and new systems, and transform the logical design into an actual physical system. ➄ System operation and maintenance stage As a business is always evolving, various errors or deficiencies will appear, which will need to be addressed. To adapt to the system environment and other factors and ensure the regular operation of the system, the system modifications need to include the improvement of functions and the solving of problems during its operation. This includes system redevelopment and upgrade to meet the phased demand growth of the system. The lifecycle method of management information system development is the primary theoretical basis of the case, capturing the concept of system development from top to bottom, from overall to partial, engineered and systematic. It is an integral theory followed in the construction of management information systems in practice. Parts 2–5 of the case focus on the Internet hospital system’s development process. From the start of the project, system construction is carried out according to the lifecycle method. The system development and implementation of the Internet hospital platform is gradually introduced according to the time axis.

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(3) Information system business process The business process refers to a series of activities performed by different members of the organization to achieve specific goals. There are strict restrictions on the sequence of activities and precise arrangements and definitions of the content, methods, and responsibilities of the activities to make it possible for different activities to be passed among different roles. Business process informatization refers to informatization tools that help promote, transfer, assist, and manage the business process activities. Business process informatization is the core of a growing enterprise. The use of an information system can continuously collect essential business data from the business process so that managers can readily analyze, simplify, and optimize the business process, and provide the basis for business process reengineering (BPR). ➀ Value chain analysis Generally, the value chain analysis method is used to analyze an enterprise’s internal and external environmental factors, with the core operations of the main business links examined. From the informatization perspective, redundant links are removed, and simplified and effective central business processes are designed. The primary business process should be in line with the company’s value creation and transfer process between different roles or departments. ➁ Hierarchical analysis An enterprise has main processes and sub-processes. By analyzing this hierarchical relationship, we can identify the primary incongruity that limits the sub-processes from serving the main process to improve the efficiency of the main process. The operational efficiency of an enterprise depends mainly on the efficiency of the main process. If we do not identify these distinctions, we become mired in the process. ➂ Data flow analysis Frequently, the information needed for enterprise management is not part of a single process. For example, each subsystem’s data may need to be captured from different processes and databases, such as other subsystems, and organically summarized into reports, trends, and distribution required for enterprise management. In the design process, the direction of the data flow needs to be consciously planned.

4.2

Problem Analysis

(1) Based on the application of “Internet plus medical” care, the main motivation for constructing the internet hospital, AHJU Online, can be identified based on the existing information system of the Affiliated Hospital of Jiangsu University, and the difference between the Internet hospital and the original hospital management information systems can be compared.

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This case analyzes the main reasons for the construction of an Internet hospital from two aspects: the needs of patients and the need to upgrade the enterprise information system. Individuals have indicated that the statements it is “difficult to see a doctor” and it is “complicated to see a doctor” capture the pain points related to people’s livelihoods. It is common that patients register, check in, and then queue up when they go to a hospital. A main driving force of hospital management innovation has focused on how to solve long waiting times and improve patient efficiency. Today, with the continuous improvement of hospital information, traditional medical and health services are having difficulty meeting the growing demand for multi-level and diversified medical services. Thus, there is an urgent need to apply information technology to optimize resource allocation, innovate service methods, improve the medical experience, and enhance the alignment between medical service supply and demand. At present, after the information construction and development for many years, hospital has gradually built a business system group covering multiple departments, including hospital information system (HIS), laboratory information management system (LIS), electronic medical records, picture archiving and communication systems (PACS), physical examination, materials and equipment, surgical anesthesia, and data exchange platforms. However, each functional system focuses on different fields while intersecting with each other; however, some data cannot be integrated effectively, resulting in the “information island” problem within the hospital. The solution to how to improve data sharing and information exchange between heterogeneous systems is to establish a unified information platform that supports the integration of existing systems. A unified platform architecture needs to be formed for the affiliated hospitals that provides a unified data interface standard, integrates and utilizes the old system data effectively without affecting the old system’s operation, and creates a new application system to realize the continuity and correlation of clinical data. Moreover, it needs to achieve the sharing and exchange of information standards between business systems, meet the needs of future application expansion and comprehensive data application, improve hospital management, and, finally, support a “patient-centered” modern hospital service mode. (2) Based on the management information system theory, this case analyzes the development process of the AHJU online project and how to achieve innovation in information management. The management information system’s development process can be analyzed and summarized according to the lifecycle theory of management information system development, combined with the detailed processes of functional achievement in AHJU online. The process of system development occurs in six stages: system requirements analysis & overall planning, system analysis, system design, system implementation, system operation & maintenance, system evaluation & upgrade. The construction of the second and third phases of the project will be built in the next two years. Students should be encouraged and supported to participate in the analysis and

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understanding of each stage of system development, and discuss their unique perspectives and feelings. The Internet hospital integration platform advanced the hospital’s information management mode in the following aspects. ➀ “Internet plus intelligent guidance” promotes the patient’s medical experience. After downloading and registering on the AHJU online app, online intelligent pre-diagnosis or online manual guidance can be conducted, and appointment registration and online payment of registration fees can be accomplished for newly diagnosed patients. Patients can go to the consulting room directly according to appointment time, eliminating waiting times for registration and payment. ➁ “Internet plus online inquiry” lessens the need for patients to revisit the hospital. It provides online follow-up medical services for common and chronic diseases. At home, patients can conduct face-to-face video consultations with doctors on their mobile phones. Doctors can issue prescriptions and exam applications on the Internet. Patients can complete payments and appointments on their phones. ➂ “Internet plus medical alliance” promotes the overall effectiveness of medical services. The online medical alliance’s telemedicine cooperation platform was established with the hospital at its core. With AHJU online carrying out upstream and downstream referral services with primary hospitals, high-quality medical resources are fully linked, the hierarchical diagnosis and treatment referral processes are convenient and efficient, and the medical pattern of “minor diseases in the primary level, serious diseases in the hospital, rehabilitation back to the community” is consolidated. ➃ “Internet plus health consultation” promotes health management. Patients can use their mobile phones to check previous medical information and various examination reports at any time and receive online health consultations, disease management, medication guidance, discharge follow-up, and other health services characterized by the management of pediatric asthma and other specialized diseases. ➄ “Medical insurance payment without card” improves the efficiency of patient settlements. In April 2017, Zhenjiang City opened medical insurance card-free payments, becoming the second city in China and the first city in the province to offer this. Through facial recognition technology, the integration process between Alipay and social security cards is optimized. This replaces the old mode of integration with the social security card, which had to be activated and paired with financial functions and other complicated procedures in advance. After connecting with the medical insurance card, Alipay allows the patient to easily see a doctor without a medical insurance card in the hospital and quickly pay all expenses. ➅ “Cloud pharmacy delivers medicine to the home” to improve patient satisfaction. The cooperation between the Affiliated Hospital of Jiangsu University and Shanghai Pharmaceutical E-health Cloud Business Co., Ltd., using an intelligent distribution base to carry out home delivery, has

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opened up the “last mile” of conventional medical treatment, and built a closed-loop process from hospital diagnosis and treatment to cloud pharmacy drug supply. It is a beneficial practice to explore further in the distribution of medicine. (3) Combined with the student’s real experience with treatment, and the use of the AHJU online app, the flow of information and the process of all the business functions in the closed-loop system of Internet hospital operation service can be analyzed. Encourage students to discuss their real experiences according to the information flow of appointment, inquiry, payment, interaction, and other links, and prompt and help students complete the analysis and identification of the business processes on the Internet hospital platform, and analyze the business processes of the closed-loop service system according to the three service systems of pre-diagnosis, diagnosis, and post-diagnosis. See Fig. 2. The Pre-diagnosis Stage. Patients are admitted to the Internet hospital through the WeChat official account/Alipay service window (client), remote consultation application of primary medical institutions, or drugstore remote inquiry application. Through intelligent guidance, patients can receive treatment instructions for various diseases and understand the hospital’s treatment process in advance to enable relevant medical preparation. Patients should undergo preliminary self-examination according to their symptoms. The Diagnosis Stage. Patients enter the network consultation room through the client for users or remote consultation client for primary medical institutions and initiate a consultation with doctors by voice, graphics, or video. Doctors interact with patients through the doctor’s platform, interact with patients through auxiliary means, such as a medical record folder, access the patient’s health files, put forward diagnosis suggestions, and write in online medical records. Patients’ online payments and settlements are completed at the visit.

Fig. 2 Completing process of medical service. Source: Prepared by case writers

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The Post-diagnosis Stage. According to the doctor’s diagnosis suggestions, the platform can help patients find referrals to offline hospitals or cooperative hospitals for in-depth treatment. During the treatment period in the hospital, the platform still provides full medical service guidance. The prescription process helps patients complete drug delivery and distribution. At the same time, patients can receive health education, follow-up, medication reminders, and other medical services on the platform. The platform also helps patients with various forms of health record management services. (4) Ask students to put themselves into the position in charge of the information department; what new internet technologies can be integrated into the system implementation in the next two and three phases of construction, and what essential links need attention? ➀ Internet of Things (IoT) technology The IoT is an important part of current information technology development based on the internet. Through the network, the IoT can use the Internet to create mutual connections between people-to-people, people-tothings, and things-to-things. Real-life objects connect through the Internet for information exchange, supervision, communication, and other functions, to achieve the intelligent identification and positioning of objects. In an intelligent hospital, IoT services can provide information for the hospital by scanning codes, such as the barcode for each inpatient. In the process of transfusion, examination, and other operations, the patient barcode, drug barcode, and inspection item barcode can be aligned before the next operation to avoid human error. In addition, taking the examination report and scanning the self-service reporting equipment’s code can save time and obtain examination results quickly. ➁ Cloud computing Cloud computing is a new way of computing based on information technology and the Internet. It includes advanced technologies such as distributed computing and integrated virtualization. It has the characteristics of significant scale, high computing levels, and diversified operational modes. The effective integration of cloud computing and virtual desktop technology can build a corresponding cloud computing data center. With only one phone, medical images can be transmitted remotely so that doctors can diagnose and treat patients in a timely manner. Moreover, with the help of relevant three-dimensional image technology, the patient’s specific situation can be fed back to the doctor to improve accuracy and timely diagnosis. The cloud storage function is used in the process of building hospital information. All hospital data are saved on a virtual server, and redundancy is adopted to ensure data reliability. Intelligent hospitals rely on cloud computing technology to establish a medical computing model, build a medical

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resource database, provide patients and hospitals with comprehensive medical information, improve medical services’ effectiveness, and establish a cloud platform to achieve safer and more efficient management. ➂ Big data application Hospital big data refers mainly to the massive information generated in the process of routine clinical diagnoses, scientific research, and process management, including various clinical outpatient records, inpatient records, medical image records, rational drug use records, laboratory operation records, and medical insurance data records. The primary characteristics are as follows. There is a vast amount of data. The hospital information system records are the basic data of patients’ diagnosis, treatment, hospitalization, medication, and examination, capturing massive amounts of electronic medical records and medical insurance data. The data require distributed storage structure as they include structured data, such as numbers and texts, and unstructured data, such as medical images, audio, and video. For example, patient registration information is synchronously displayed in the outpatient doctor’s workstation; in this way, the doctor obtains the necessary information on the patient initially. The HIS stores general hospital data, patient data, and financial, management, and decision-making data, as well as other data. ➃ Artificial Intelligence (AI) China’s medical industry is going through a significant evolution as it shifts from focusing on treatment to focusing on health. The medical field is a typical data-intensive industry. The improvement in data generation speed has also resulted in a significant increase in the accumulation of medical data. AI technology can dramatically accelerate the efficiency of mining and extracting deep-seated information. At present, it plays a professional role in medical image diagnosis and analysis, diagnosis and treatment expert systems, medical examination project robot applications, data mining and analysis, and management assistant decision-making. Data mining algorithms in AI technology can mine and analyze big medical data and describe the complicated relationships between different medical datasets. Machine learning algorithms have the characteristics of autonomous learning and complex feature analysis. These can analyze medical datasets and obtain highly abstract diagnostic feature sets. The algorithms can gradually realize the autonomous learning of electronic medical record systems and medical imaging systems and improve doctors’ diagnoses. The problems that may occur in the later stage of construction are as follows.

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➀ Information security The intelligent hospital is based mainly on Internet connectivity, which requires strict security protection for medical data and patient privacy. Therefore, ensuring that patients’ personal information and medical data cannot be hacked has become important. Simultaneously, the hospital information platform should be able to share information with the regional health information platform and other external systems, such as the effective connectivity with medical insurance, public health, regional health, community health systems, and the safe sharing and exchange of relevant data. ➁ System scalability requirements The hardware must be able to support the dynamic expansion of computing power and storage capacity without interfering with the current system’s operation or the migration of the current system. It should be able to migrate to a virtualization and cloud computing architecture. The platform needs to support an increasing number of integrated heterogeneous systems, which increase the scope of platform deployment, and have strong connectivity with a superior system. Vertically, it should be able to support data integration at a fine-grain level and be well-timed to meet high requirements and exchange data with superior platforms or data centers; horizontally, it should be able to support a range of expansion in networking institutions exchange with non-medical data centers. The application software should be easy to integrate and share with the original system and support industry standards.

5

Background Information

In January 2015, the National Health and Family Planning Commission issued the “Notice on further improving medical service action plan”, establishing three years to significantly improve the nation’s medical service level, the experience of seeing a doctor, social satisfaction, and the doctor–patient relationship. In July 2015, the State Council issued “Guidance on actively promoting the ‘Internet plus’ action”, which calls for the promotion of online medical and health models, the development of Internet-based medical and health services, and the active use of the mobile Internet to provide online booking, consultation, reminders, pricing, payment, consultations, and drug delivery. In August 2015, the State Council issued an “Action plan for promoting big data development”, which specifically defined 10 big data projects. Among them, the public service big data project prioritized the application of big data in health care, social security, and people’s livelihoods. In April 2018, “Put forward the suggestion to promote the development of Internet plus medical health” document issued by the General Office of the State Council, it encouraged medical institutions to expand the reach and content of medical services by using the Internet and information technology, and constructing online and offline integrated medical service modes covering the whole

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process of diagnosis. Meanwhile, it also allowed the development of Internet hospitals linked to medical institutions. At the same time, the National Health Commission formulated the “Internet diagnosis and treatment management measures (trial)”, “Internet hospital management measures (trial)” and “Telemedicine service management specification (trial)”. In July 2018, the National Health Commission issued a notice on the launching of the Internet plus medical health campaign for the benefit of the citizens. The objective was to accelerate the construction of smart hospitals, use Internet information technology to transform and optimize the diagnosis and treatment process, and pass through the various links before, during, and after the diagnosis to improve the patient’s medical treatment experience. In December 2018, the Ministry of Health issued “The administrative measures for graded evaluation of the application level of electronic medical record system and evaluation standards (trial)”, which proposed that local health administrative departments at all levels should strengthen their work, organize relevant medical institutions within their jurisdiction to continuously promote the construction of electronic medical record information, and improve the level of medical service and management information. In August 2019, the General Office of the State Council issued “The guidance on promoting the healthy development of platform economy”, which supports the influx of social capital in Internet-based medical and health care, education and training, elderly care and home economics, culture, tourism, sports, and other emerging service fields, to transform and improve the network infrastructure of education and medicine, expand the supply of high-quality services, and meet the multi-level and diversified needs of the masses. It also encourages the platform to expand the scope of services, strengthen brand building, improve service quality, develop new formats of convenient services, extend the industrial chain, and drive employment growth.

6

Teaching Plan

This case can be used as a particular class discussion. The case is suitable for small classes, as the class size should be controlled to under 30 students. The class time should be controlled to under 120 minutes. Some students will be responsible mainly for sorting the content, and others will be responsible for the analysis and research of the case problems. The classroom should have a projector, blackboard, chalk, table, and other equipment. Simultaneously, to facilitate better student participation in the class discussion, the teacher can remind students to prepare a name card before class to create a relaxed discussion atmosphere. To enrich the teaching form and content, students can quickly and efficiently master the relevant knowledge. We can carry out classroom teaching according to the following plan.

Teaching Note for the Smart Internet Hospital …

6.1

181

Pre-Class Preparation

Send the case to the students one week in advance of the class to read the case materials. Arrange the grouping and assign each group a thought-provoking question, which focuses on the analysis. Encourage students to analyze and pay attention to the relevant national policies of hospital informatization and the Internet plus medical care approach. Put forward five pre-class thought-provoking questions (The primary purpose is to guide students to think independently and actively participate in the discussion in class). Ask students to complete the reading and preliminary thinking before class. The question suggestions are as follows. (1) (2) (3) (4)

What is the basic process of hospital management? What are the standard systems in hospital information management? What are the national policies of Internet plus medical care? What are the development processes of management information systems and representative systems in the field of professional application? (5) Recall and sort out the process of seeing a doctor in the hospital and the problems encountered.

6.2

Class Plan

Table 1 is the suggestion for the classroom activities. Table 1 Suggestion for the class plan. Source: Prepared by case writes No.

Content

Teaching aids

Teaching activities

Time

1

Case review and scene play

Case scenario simulation props

(1) Case review 20 mins (2) Assign a small group to present the main content of the case in class in a scene play.

2

Group discussion

PPT White board

(1) Present class discussion questions (2) Eight to ten students work in groups for analysis and discussion

30 mins

(continued)

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Table 1 (continued) No.

Content

Teaching aids

Teaching activities

3

Panel concluding speech

White board

Each group selects one 50 mins representative to present its conclusions to the following: Compare the difference between the Internet hospital and the original hospital management information system. Analyze the entire development process of the AHJU online project, and how to achieve innovation in the mode of information management

Time

4

Teacher comments

PPT White board

The teacher leaves comments on the report results for each group and, finally, gives suggested answers

10 mins

5

Discussion and analysis

PPT White board

After the presentations and comments of each group, an extended discussion on the questions is conducted under the guidance of teachers. Five students can be randomly invited to express their views to extend general understanding of the topic

20 mins

6

Case conclusion

PPT

Summarize the key takeaways from the entire case

5 mins

Teaching Note for the Case of Person and Job Matching in the Newly Established Department of a New Energy Power Company Jingzhao Yang and Jing Wu

1

Teaching Objectives

(1) Applicable courses: This is a comprehensive case, suitable for MBA, graduate, and undergraduate teaching. It can also be included as a case in lectures on “Job Analysis” and “Salary Management", as well as auxiliary relevant lectures on “Human Resource Management". (2) Teaching objectives: Mainly, this case introduces the construction and development of the Financial Shared Service Center (FSSC) at one of the branches of China Nuclear Power Engineering Co., Ltd. (NP company) and describes its status changes and personnel changes at different enterprise stages. Through the discussion and analysis of this case, students will obtain the following. ➀ Understanding the concepts, methods, and measures of financial data management of large enterprises in the context of current big data management. ➁ Understanding the key approaches to building cross-departmental team processes and integrated department connections in the context of change. ➂ Understanding how to use appropriate tools to describe, analyze, and evaluate a department or position in a company.

J. Yang (B) · J. Wu School of Management, Jiangsu University, Zhenjiang, China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Fan et al. (eds.), Casebook of Chinese Business Management, Management for Professionals, https://doi.org/10.1007/978-981-16-8074-8_19

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Discussion Points

(1) What management challenges do you think will arise in the process of setting up a new department? What role does the human resources department play in this? (2) What are the characteristics of the required personnel in the construction and operation stages of the FSSC of NP company? (3) What is the core talent needed for the FSSC of NP company? What qualities should the personnel have? (4) What do you think are the main reasons for the loss of information personnel at the FSSC of NP Company?

3

Analysis Ideas

This case describes the construction and operation of NP company’s FSSC and guides students in gaining an understanding of the organizational reform of the company and the current management situation after establishing the FSSC. Teachers can use this case flexibly, according to the current curriculum plan. The analysis ideas proposed in the instructions are only for teacher reference. Specific suggestions are as follows. Mainly, the case study focuses on the timeline of the construction and operation of NP company’s FSSC, as well as the logical process of matching people and jobs during construction and operation (as shown in Fig. 1). Explain the necessity of establishing the FSSC and identify the “driving force” in the organizational change in NP company. Explore the current status of the FSSC in NP company. Analyze the possible reasons for the loss of information personnel in the FSSC at NP company, and identify the measures needed to help it out of this predicament based on the above discussion.

4

Class Discussion

4.1

Analyze the Responsibilities and Functions of NP Company’s FSSC According to the Case; Write the Job Descriptions and Qualifications as an Operation Supervisor

[Theoretical Basis] McClelland, a famous American psychologist, proposed the “Iceberg Model” in 1973 (shown in Fig. 2) that divided individual qualities into the surface “above the iceberg” and the deep “below the iceberg", according to their different forms of expression.

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185

Fig. 1 Person–post matching analysis diagram. Source: Prepared by case writers

Fig. 2 “Iceberg Model”. Source: Hines et al. (2008)

Those “above the iceberg” include basic knowledge and skills, which are external manifestations that are easy to understand and measure and easy to change and develop through training. Those “below the iceberg” include attitudes, values, selfimage, quality, and motivation, which are internal manifestations that are difficult to measure, and difficult to change through external influence, but which play a key role in individual behavior and performance (Hai et al., 2016).

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[Concrete Analysis] According to the relevant responsibilities and functions of the FSSC of NP company described in the case, combined with the work analysis at the organizational level and at the job level, the table 1 shows the job descriptions and qualifications of the information personnel in the FSSC:

4.2

Try to Evaluate the Value of the Position of the Information Operation Supervisor at the FSSC of NP Company

[Theoretical Basis] In 1951, American expert Hay developed a three-element method for job evaluations, now recognized as the most accurate job evaluation method in the world. Hay believed that the compensation factors for all positions could be abstracted into three categories with universal applicability: knowledge, problem-solving ability, and risk accountability. Three sets of evaluation scales were designed to synthesize the scores and obtain the relative values of each position. According to this assessment method, a job exists because it bears a specific responsibility, namely, the job’s output. The questions is what needs to be put in to obtain the expected output? The knowledge and skills of the person holding the position are the input. How can employees with certain knowledge achieve the expected output? Solving problems on the job, that is, using “knowledge” in the process of “problem-solving” will generate the final output of “accountability". The internal logical relation is input–process–output (Pamela & Susan, 2008). This means the input of knowledge can solve a problem, with the aim of completing one’s responsibility. In Hay’s job assessment method, the “shape” of each position must be considered when evaluating the scores of the three main compensation factors to determine the weight of each factor. The total score of the relative weight of each position is calculated to complete the job-evaluation activities. The so-called “shape” of a position is determined mainly by the comparison and distribution of the influence of the two factors knowledge and problem-solving ability rather than the responsibility of the position, usually divided into three shapes: The “uphill” shape (this position has more responsibility than knowledge and problem-solving skills, e.g., company president, sales manager, management in charge of production, etc.); the “flat path” shape (knowledge and problem-solving are equal with responsibility in this type of position, e.g., accounting, personnel, and other functional teams); the “downhill” shape (where the responsibilities are less critical than knowledge and problem-solving skills, e.g., scientific research and development and market analysis). Hay’s job evaluation method values and scores the position according to the above three elements and corresponding standards. The job-evaluation score is obtained, that is, the job’s evaluation score = knowledgeability score × (1+ problem-solving ability score) × corresponding weight + responsibility score × corresponding weight. The

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Table 1 Job descriptions and qualifications of the information personnel in FSSC. Source: Prepared by case writers Job

Information operation supervisor

Job description No.

NP-FSSC-001

Position sequence

Manager

Job hierarchy

Supervisor

Subordinate departments

Accounting department

Department/Project department

Accounting department

Working department

FSSC

Superiors

Operation manager

Purpose of the job: Take responsibility for the construction of the FSSC system and the standard system, daily maintenance of financial informatization, development of financial informatization processes and other businesses according to the overall work requirements of the FSSC, as well as the work responsibilities of the operational departments. Major duties: 1. Responsible for organizing the revision of the FSSC manual. 2. Responsible for the establishment of the operational section work systems. 3. Responsible for the daily maintenance of financial informatization and coordination of the troubleshooting of financial software. 4. Responsible for establishing and improving front-end support business specifications. 5. Responsible for organizing financial information system planning, implementation strategy, and implementation plan preparation according to the company’s overall informatization construction goal and financial informatization demand. 6. Based on the needs of financial users, combined with the financial and peripheral systems, responsible for preparing the optimization plan to be communicated with the information technology department and the implementation party about the demand details, and determine the reasonable functional implementation plan. 7. Coordinate and cooperate with all relevant parties to follow up on the progress of the informatization project and ensure the project results meet the needs of users. 8. Analyze the offline process, understand business characteristics, and promote the offline process online. 9. Understand the technical development language and related system codes, handover with the system implementer, and withdraw the system development authority if necessary. 10. Responsible for the information interface with state power investment, software companies, etc. 11. Other tasks assigned by leaders. Job Relation

(continued)

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Table 1 (continued) Job

Information operation supervisor

Job description No.

NP-FSSC-001

Qualification: Education background

Degree

Bachelor’s degree or above

Major

Computer-related

Title and qualification

Title

Intermediate Professional Computer Title

Qualification certificate

Certificate of Accounting Profession

Training requirements

Training for junior management personnel

Working experience

At least six years of work experience in financial informatization

Experience

Professional experience

Experience in department or team management

Professional Professional knowledge requirements and skills

1. Familiar with accounting standards for enterprises, general financial rules for enterprises, and other national accounting laws and regulations; 2. Familiar with national financial laws, rules and regulations, guidelines, and policies; 3. Proficient in Excel, PPT, Visio, etc. Familiar with more than one development language (Java, Python, etc.) and framework. Familiar with more than one relational database (MySQL, SQL Server, etc.), with database modeling and performance optimization; 4. Proficient in UML modeling, have a certain experience in system architecture design, module division, and technical implementation; 5. Full process implementation experience in financial ERP (such as Oracle, SAP, UFIDA, Kingdee) preferred.

Ability quality (Option)

Common skills

· Sense of duty · Teamwork · Study ability · Creativity

Management ability

· Goal planning ability · Organization/Coordination ability · Leadership communication skills · Analytical and judgment ability · Supervisory and control ability · Motivation and cultivation of subordinates · Execution · Influence

Job ability

· Risk awareness · Rigorous and meticulous · Forward-thinking · Decision-making ability · Achievement oriented · Cost consciousness · Comprehensive outlook · Initiative

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knowledgeability, responsibility assessment, and final scores are all absolute scores, while the problem-solving assessment score is relative (100 points). [Concrete Analysis] ➀ Skill Level In terms of professional theoretical knowledge, information operation supervisors need to have skilled professional expertise and be able to independently deal with complex affairs in the field such as financial information maintenance, financial software troubleshooting, understanding the corresponding technology development language and system code for the implementation of the system handover and recovery of the system development authority—such that their communication skills are “proficient". In terms of management skills, they need to communicate with the information technology department and implement party on-demand details, determine reasonable functional implementation plans and promote offline and online electronic processes, requiring communication, coordination and feedback with relevant departments and software developers—such that their communication skills are “relevant". In terms of interpersonal skills, in the development process, the information operation supervisor has to understand not only the feedback and information conveyed by others but also give precise answers to technical problems that can only be implemented to a limited degree— such that their communication skills are “important" (Robson, 2002). Therefore, according to Hay’s influence factor grading and distribution table, the value of the informatization operation supervisor’s knowledge factor is 304. ➁ Problem-Solving Ability The informatization operation supervisor is restricted by financial laws, general regulations, rules, and specific regulations in process development. According to the enterprise’s development, the “thinking” environment is broadly defined; each enterprise needs to build a FSSC. The construction of a FSSC is a highly creative endeavor. The difficulty of “thinking” is unprecedented. Thus, problem-solving ability is rated as 66% of the skills needed. ➂ Responsibilities Undertaken Information operations supervisors have greater freedom of action and are guided by operations managers; so the position is "guided". The FSSC aims to improve the level and efficiency of the enterprise’s financial management and provide data support for its business activities. It has a particular influence on enterprise operations and development. However, it is generally considered “auxiliary"; the FSSC staff of NP company is at less than 80% of the standard allocated staff number. As the NP leadership does not attach enough importance to it, the job value of the information personnel is not recognized. Therefore, the ability to assume responsibilities is slightly inadequate and insufficient. Thus, the overall score of the information operation supervisor in terms of responsibility is 100.

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Table 2 Knowledge worker classification framework. Source: Prepared by case writers Category

Knowledge update

Knowledge Innovation

Low

High

High

Low update, high innovation (artists)

High update and innovation (university teachers, research and development personnel)

Low

Low updating and innovation (ordinary white-collar workers)

High update, low innovation (programmers)

In conclusion, the position of the information operations supervisor is of the “downhill type", that is, knowledge and problem-solving ability are more important than responsibility. Therefore, the total score of this job is 304 × (1+66%) ×70%+ 100×30%=383.248.

4.3

If You Are the HR Director of the Finance Sharing Center of NP Company, What Measures Will You Take to Avoid Informatization Staff Turnover?

[Theoretical Basis] Since Drucker and Horibe proposed the concept of knowledge workers, scholars have continuously expanded and extended the connotation of knowledge workers. The mainstream definition states that the primary difference between knowledge workers and non-knowledge workers is that knowledge workers rely more on just doing work. By contrast, the latter rely more on physical strength. Therefore, according to knowledge workers’ essential characteristics—knowledge updating and knowledge innovation—Hai Li in China divided knowledge workers into four categories and constructed a knowledge workers classification model, as shown in Table 2. According to the existence-relatedness-growth (ERG) theory, (Fig. 3) the satisfaction of a lower level of need will lead to a desire for a higher level of need. Unlike the hierarchy of needs theory, ERG theory holds that multiple needs can act as motivators simultaneously. Moreover, when they attempt to satisfy higher-level needs, people will return to their lower-level needs (Ruan & Zhao, 2017). Therefore, management measures should be changed accordingly with the changes in the structure of human needs, and the corresponding management strategies should be formulated according to the different needs of each person. [Concrete Analysis] In the knowledge economic era, the number and importance of knowledge workers are becoming increasingly prominent and diversified (Yin, 2013). This evolution is impacting the differences in working characteristics and demand structure, among other elements. A top priority for enterprises is using different human

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Fig. 3 ERG theory. Source: Alderfer, C. P. (1969)

resource manager (HRM) measures for different types of knowledge employees and fully exploring the potential of employees to improve team efficiency to achieve development. For NP company in this case, the information personnel who have resigned from the Financial Shared Service Center are knowledge workers to some extent. According to knowledge workers’ essential characteristics—knowledge renewal and knowledge innovation—information workers are knowledge workers with high renewal and low innovation. They are responsible for establishing primary data in the financial sharing system, setting permissions and process maintenance, and solving the financial sharing system’s failures. The work is singular and repetitious, and innovation is low. Therefore, what exactly causes this kind of knowledge worker turnover problem? Based on the hierarchy of needs theory, ERG theory was proposed, which focuses on how satisfaction at work will affect an individual’s desire to work and thus work behavior tendency. Combined with the relevant narration of the FSSC of NP company, three variables—salary satisfaction, working relationships, and career growth—are identified as the survival, relationship, and growth needs of these knowledge workers. According to the comprehensive quality and ability requirements proposed by these positions, the knowledge and skill level, and problem-solving ability of information personnel are more important than responsibility. At the same time, information personnel are knowledge workers with high updating and low innovation requirements. In terms of employment mode, employees with low innovation pay more attention to salary, working relationships, and other incentive factors, and thus have a higher turnover tendency. Enterprises can adopt market-based employment methods to address this, namely, give these employees a salary slightly higher than the market level according to the market price of labor, pay attention to short-term performance, and prepare in advance for their resignation. For highly innovative

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employees who pay more attention to career growth and long-term development in the enterprise, enterprises should adopt a commitment employment model, focus on training and development of employees, authorize and encourage them to participate in decision-making, and increase work autonomy to improve employees’ long-term commitment. In terms of employee training, different training content should be designed for different knowledge employees according to the knowledge worker classification framework. For employees with low innovation, the training content should focus on the relevant work content and job responsibilities; for highly innovative employees, the training content should focus on the higher vocational skills needed for career development, improvement in their vocational skills, and preparation for their future career development. At the same time, managers should provide career counseling and planning guidance to employees and provide information about vacancies within the organization to provide employees opportunities for promotion. In terms of knowledge workers’ incentives, managers should choose appropriate incentive strategies, which not only provide good salaries but also provide opportunities for better salaries; managers can provide flexible compensation, and different compensation packages for different employees according to employees’ specific needs, and pay attention to the rationality of the compensation structure to improve employees’ compensation satisfaction (Zaidah, 2007). For knowledge employees with low innovation, the company should pay more attention to the salary incentive effect. The proportion of one’s fixed salary can be slightly larger. The salary payment cycle should be relatively short to improve employees’ salary satisfaction, stimulate extrinsic motivation, and reduce turnover. For highly innovative knowledge employees, the company should pay more attention to career growth, increase investment in career development, provide sufficient channels and opportunities for career growth, stimulate intrinsic motivation, and improve work enthusiasm and innovation.

5

Teaching Plan

Teachers should distribute the case to students to read and collect relevant materials at least one week in advance. Simultaneously, they should prepare the class discussion materials according to their knowledge, reference to the case, and a case description of the relevant content. In terms of time, the teaching time of the case class should be controlled to approximately 120 minutes, and the specific plan can be as follows (for reference only): Pre-class: put forward questions and ask students to finish reading, and conduct preliminary thinking and relevant information collection before class according to the requirements of blackboard case notes (as shown in Fig. 4). Table 3 presents the suggestions for classroom activities.

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Fig. 4 Blackboard case notes. Source: Prepared by case writers Table 3 Suggestion for class plan. Source: Prepared by case writers No. Content

Teaching aids

Teaching activities

Time

1

Case Case • Case review review and scenario • Assign a small group to present the main content of scene play simulation the case in class in a scene play props

2

Group discussion

PPT White board

• Present class discussion questions 30 mins • Eight to ten students work in groups for analysis and discussion

3

Panel White concluding board speech

Each panel selects one representative to present its 50 mins conclusions regarding the following: • Analyze the responsibilities and functions of the FSSC of NP company, and provide design ideas of the job content and qualifications of relevant positions. Assess relevant positions in the Financial Sharing Center of NP company. • Analyze the possible reasons for staff turnover in the FSSC, and put forward corresponding improvement suggestions

4

Teacher comments

The teacher leaves comments on the report results of each group and finally gives suggested answers.

PPT White board

5 mins

10 mins

(continued)

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Table 3 (continued) No. Content

Teaching aids

Teaching activities

Time

5

Discussion PPT and White analysis board

After the presentations and comments of each group, 20 mins the extended discussion on the thinking questions is conducted under the guidance of the teachers. Five students can be randomly invited to express their views to extend their perspectives on the topic.

6

Case PPT conclusion

Summarize the knowledge points of the whole case.

5 mins

References Hai, L., Zhu, J., Zhang, M., Sun, Q., Fan, S., & School, B., et al. (2016). How to motivate diversified knowledge workers? based on a classification framework and differentiated incentive model. Science of Science and Management of S.& T, Vol. 37 No. 10, pp. 164–180. Hines, P., Found, P., Griffiths, G., & Harrison, R. (2008). Staying Lean: Thriving, Not Just Surviving. Lean EnterpriseResearch Centre, Cardiff University, Cardiff. Pamela, B. and Susan, J. (2008), Qualitative Case Study Methodology: Study Design and Implementation for Novice Researchers, The Qualitative Report, Vol. 13 No. 4, pp. 544–559. Robson, C. (2002), Real World Research: a resource for social scientists and practitionerresearchers (2 nd ed.), Oxford: Blackwell. Ruan, P.N. and Zhao, Y.Q. (2017), Research on user demand identification based on open innovation community—Taking Millet Community as an example, Soft Science, Vol. 31 No. 12, pp. 20–24. Yin, R.K. (2013), Case Study Research: Design and Methods (5th ed.), California: SAGE Publications. Zaidah, Z. (2007), Case study as a research method, Jurnal Kemanusiaan, Vol. 9, pp. 1–6.