Objectives To find out the organization structure of Tsingtao and Heineken and discuss the potential of globalization of these two companies.Background 1. Business Background of Tsingtao Tsingtao Brewery Co. , Ltd. , one of the oldest beer producers in China, was founded in 1903 by German and British merchants under the name Nordic Brewery Co. , Ltd. Tsingtao Branch.
Tsingtao Brewery was the sponsor of the Beijing Olympics in 2008. The brand value of Tsingtao Beer is as high as RMB 36. 625 billion, making Tsingtao Brewery the top Chinese beer company among the world’s top 500 brands. On July 15, 1993, Tsingtao Brewery became the first-ever Chinese company to be listed on the Hong Kong Stock Exchange (stock code 0168).On August 27, 1993, it was listed on the Shanghai Stock Exchange (stock code: 600600), making Tsingtao Brewery the first Chinese company to be listed in both Mainland China and Hong Kong. Due to numerous strategic mergers and acquisitions, purchases of insolvent companies, reorganization, and joint-venture partnerships in the late 1990s, the company now has more than 50 breweries in 18 provinces municipalities and autonomous regions, further strengthening its leadership in the Chinese market. In 2009, Tsingtao Brewery sold 5.
1 million kilo-liters of beer, an increase of 9. 9% from the previous year. The revenue and net profit reached new record highs of RMB 17. 761 billion and 1. 253 billion respectively, up 12. 5% and 79. 16%.
Tsingtao Brewery was exported to more than 70 countries and regions including the USA, Japan, Germany, France, UK, Italy, Canada, Brazil and Mexico. The Barth Report, an authoritative publication which assesses the global beer industry, ranked Tsingtao Brewery as the 6th-largest brewery in the world based on total yield from 2006 to 2008.Tsingtao Brewery’s vision is to become an international company with a global brand. Our mission is to bring joy to life by passionately brewing the beer which is loved among beer drinkers from all over the world. “ (Tsingtao Official Website 2010) Timeline of Tsingtao 1903Qingdao Beer creating Germanic stock company was established German businessman and British businessman with annual production capacity of 2,000 tons, produce beer and black light beer. 1916Changed its name to "Big in Japan Brewery Co. , Ltd.
Qingdao factory. with trademark of "Sapporo","Sun ", "Fu"and"unicorn" and other brands. There were 15 Japanese employees, 7 Japanese workers, 164 Chinese workers. 1939Built malting plant. The equipment was manufactured in China malt only. 1942Built a large-scale expansion of factories, built the storage tanks, improved Glycosylated room, packing room equipment, and installed a set of install wine, the beer output increased to 4663 tons. 1945After Japan's surrender, the government took over the company.
295 retained personnel and 8 Japanese technical personnel remained employing.The company was named to "Tsingtao Beer Company. " 1948The first Tsingtao Beer was exported to Singapore 1950To get rid of dependence on foreign imports of raw materials hop passive situation, the firm created a testing ground hops production and planted 32 acres of hops, which get success. 1964Created the famous "Qingdao Beer Operation Act, " to promote the beer industry in the country 1972Got into the U. S. market. The sales in the United States in 1988 have reached 1.
24 million boxes. Tsingtao became the largest beer brand of Asian exports to the United States. 990The sales of Tsingtao beer in Macau market reached 64% of total sales. 1993Tsingtao Brewery Co. , Ltd. officially listed in the Hong Kong Stock Exchange, becoming the first mainland Chinese companies listed overseas. Moreover, the firm was listed in the Shanghai Stock Exchange.
1998Implement the "big brand development strategy ", the first large-scale mergers and expansion in the country. 2001Qingdao Beer made by the "bigger and stronger" to "stronger and bigger" change, development strategies by the "expansion" to "integration. " 2002Signed a "strategic investment agreement" with AB Company.AB Company became strategic investors in Tsingtao Brewery Company. 2005As the beer sponsor of the Beijing 2008 China. Moreover, Tsingtao Brewery was established in Kaohsiung, Taiwan. The 10 million tons production scale beer production made Tsingtao as an important indicator of production outside 2006Trinity Marketing Strategy was introduced.
2. Business Background of Heineken “Heineken was founded in 1864 in Amsterdam by Gerard Adriaan Heineken; the brewery company is dedicated to supplying the best quality beer with no effort spared.From the outset, Heineken has been determined to fulfill this promise by continually refining all aspects of its business, including brewery techniques, quality control as well as packaging. In 1886, Heineken was the first company to successfully cultivate a unique pure strain of yeast, known as Heineken ”A”yeast, which is used exclusively by Heineken and is the key to the brand’s superior beer quality “(Heineken Official Website-Hong Kong 2010). “The Heineken story began 145 years ago in 1864 when Gerard Adriaan Heineken acquired a small brewery in the heart of Amsterdam.Since 1886, the unique Heineken A-yeast has guaranteed the pure, premium taste of Heineken beer. After 13 years of prohibition, in 1933, Heineken set foot on American soil and in 1937 the first Heineken beer was brewed outside the Netherlands, in the Dutch East Indies.
Over the ensuing years, growth and acquisitions substantially expanded the Company, particularly in Europe, which created a stronger, more competitive business focused on sustainable growth. Four generations of the Heineken family have been passionately involved in the expansion of the Heineken brand and the Heineken Company throughout the world.By the 21st century, the small 19th century local Amsterdam brewer has grown into a worldwide business with a global brand, employing more than 55,000 people. ”(Heineken Official Website-Hong Kong 2010). Timeline of Heineken 1863-1874Heineken’s Bierbrouwerij Maatschappij NV was established by Gerard Adriaan Heineken in the Netherlands. 1874-1886Most of the beer was transported to customers by boat. Because these journeys could take up to a few weeks at a time, the beer was exposed to a range of conditions (such as temperature changes) which endangered the quality of the product.
At particular risk was the beer’s yeast. In 1885, Heineken equipped a special laboratory and enlisted a chemistry expert to investigate the yeast issue. Doctor H. Elion finally cultivated a pure strain of yeast, the Heineken A-yeast. It was also beneficial to Heineken in other areas of the business. 1886-1914Heineken was popular in Paris. In 1893, Gerard Adriaan Heineken passed away.
At the World’s Fair in 1900, Heineken built a wonderful pavilion featuring its trademark five-pointed star and be able to judge the merits of the beer produced by other breweries. 914-1940Gerard Adriaan Heineken’s only son, Henry Pierre took over the company’s leadership, stimulating the introduction of modern technology. In 1929, the brewery began its own production of bottled beer, which offered an even better guarantee of beer quality. Heineken established Malayan Breweries and two breweries in Egypt. The company became an international organization. 1940-1968Alfred Heineken took over the company’s leadership, promoted the beer and the brand. The Heineken management at the time believed advertising to be an unnecessary luxury because a good product sells itself.
But Alferd got his way, with the first branded Heineken’s bottle of beer going on sale in 1948. Heineken’s first TV commercial was broadcasted in 1968. Moreover, the slogan “ Heerlijk Helder Heineken”was used in the first time. 1968-1972Van Marwijk kooij and de Pesters established their own Beiersch Bierbrouwerij in Amsterdam in 1870. Amstel was famous for sophisticated designing and the brewing of dark beers. In Greece, Amstel has been the country’s leading beer brand since 1965. 1972-1980Europe’s country having its own culture with its own beer tradition.
In 1971, Heineken had only a 2. 8 per cent share of the European market. Heineken took its steps onto the French and Italian market. In 1975, a new Heineken ‘s brewery was opened with a production capacity of 1. 5 million hectoliters per year, complete with its own water purifying installation. 1980-1989“When you make a great beer, you don’t have to make a great fuss”. With this advertising campaign, Heineken continued to establish itself as an international company and brand.
In the early 1980s, Heineken was available in 145 countries around the world such as Singapore, Malaysia and Indonesia.In 1983, Heineken was sold in China as an import beer. In 1988, Heineken acquired a stake in Shanghai Mila Brewery, the brewers of the Reeb brand. 1989-2002Heineken continued to strengthen its position across Europe – in France with Fisher, in Italy with Moretti and in Spain with Cruzcampo. In 1999, the Heineken brand was hailed by the Dutch business sector as the Brand of the Century, with Alfred Heineken being named Advertiser of the Century. Alfred pass away in 2002. His daughter, Charlene de Carvalho-Heineken, continues the family tradition by serving in the company’s management.
002-2010The acquisition of Brau-Beteiligungs A. G. (BBAG) in Austria, the largest acquisition to date in the history of Heineken, significantly extends the lead of Heineken in Europe. The business is further shaped through acquisitions and joint ventures, ensuring the creation of value. In 2005, Heineken introduces Heineken Light in the US and in France. Heineken also introduces its portable draught beer system, the Heineken DraughKeg. With the acquisition of FEMSA Cerveza, Heineken adds numerous well known brands to it’s international portfolio.
3. Organization Structure and Design 1.Organization Structure of Tsingtao Geographic Departmentation This is early stage of the organizational structure. As you seen, the firm uses functional departmentation approach for the office of sales company. There are different offices for inside province and outside province. It is effective for decision making for different departments at different areas. In another view, Tsingtao uses Hybrid departmentation for its organizational structure.
However, there are some disadvantages for Tsingtao’s approach: 1. Waste resource: since the firm used extensive management for the acquisition of subsidiaries. Extensive management is regardless of the cost and efficiency (effectiveness) of crude, not detailed management” (MBA???? N. D. ). It wasted resource for duplicate funding. It makes the production efficiency, product quality and service can not be improved.
2. The larger the p, the less potential – as the no of p of control under the president is 11. It can be look as a flat structure which the attention that a supervisor can devote to each subordinate decreases. 3. Not effective to market development Functional Departmentation (Tsingtao Official Website 2005)This is the new approach of the management structure. As you seen above, the management structure of Tsingtao contains three main parts: 1. Marketing Center 2.
Administration Center 3. Manufacturing Center The firm uses functional departmentation approach which works best in small to medium-sized firms. It is an effective means of organizing the smaller division of large corporations. [pic] (???? N. D. ) This is another analysis of the organizational structure – Three centre approach: 1. Investment and Strategy Development Centre 2.
Profit and Management Centre . Quality management and cost control Centre This approach separates the function of different management levels clearly. It is a clear mind for division of work. Functional Departmentation (Tsingtao Official Website 2005) This is the analysis of the organizational structure of Tsingtao’s Manufacturing Center. It uses functional departmentation – to separate the job duties with different functions. 2. Organization Structure of Heineken [pic] (Heineken Official Website-International 2010) As you seen, the management structure of Heineken contains three parts: 1.
Administration – functional departmentation. It is responsible for the global administration of the whole business. 2. Finance -- functional departmentation. It is responsible for the global financial support of the whole business. 3. Regional management -- Geographic departmentation.
It is responsible for the local administration in different areas. 3. Compare the Similarities and Differences of Organization Structure between Tsingtao & Heineken Similarities 1. Both functional departmentation in administration – Heineken and Tsingtao also use functional departmentation in administration.It is common case for many companies. It is an effective means of organizing the smaller division of large corporations. It is clear to separate the duty of different departments.
2. Both hybrid departmentation in organization structure – they both use functional departmentation in administration. Heineken also uses functional departmentation in Financial Support and geographic departmentation in Regional management. Tsingtao uses functional departmentation in manufacturing center and process departmentation in manufacturing process. 3. Flat Structure in administration – it can be sad hat both companies have large number of p of control which the attention that a supervisor can devote to each subordinate decreases. Differences [pic] (Birkinshaw, J 2001) 1.
Heineken uses Area division but Tsingtao uses international division – The Area division of company structure helps Heineken to separate the job duties and power of decision making in different areas. There are also a global administration to monitor and cooperate different countries’ business. It is very effective for Heineken to develop their global business.To compares, Tsingtao is working hard to imitate global companies. They are working hard to improve their organization structure. 2. Heineken uses financial independence – it can effective share the resource to different department of the firm.
The executive board can have instant sense of their financial status and implement related policy immediately. 3. Heineken uses global functional management -- there are a global administration to monitor and cooperate different countries’ business. It is very effective for Heineken to develop their global business. 4.The management structure of Tsingtao contains three main parts: Marketing Center, Administration Center and Manufacturing Center -- it is clear to separate the duty of different departments and make quick policy implement. 5.
The management structure of Heineken contains three parts: Administration, Finance and Regional management -- it is clear to separate the duty of different departments and make quick policy implement. 6. Heineken is more decentralization than Tsingtao – Heineken share the power of decision making in different areas. It helps to make quick policy implement and quick decision making for different countries. . Approaches to Management & Organizational Behavior 4. 1 Motivation Tsingtao [pic] (???? N.
D. ) The above is the motivation model of Tsingtao. Tsingtao uses intrinsic motivation – bonus money as an economic reward to motivate the staff to work hard. “Frederick Winslow Taylor (1856 – 1917) put forward the idea that workers are motivated mainly by pay. His Theory of Scientific Management argued the following: Workers do not naturally enjoy work and so need close supervision and control Therefore managers should break down production into a series of small tasks “ (Tutor2u N.D. ) However, workers dislike Taylor’s approach because they are boring during working, repetitive tasks to carry out and were being treated little better than human machines.
Tsingtao has a belief to their staffs: “As a glorious history of the company over a hundred years, Qingdao Beer "people oriented "business philosophy, firmly believe that a simple truth: "If companies can not help employees grow, do not expect staff will serve as the company's services. "” (???? 2009) This is an intrinsic motivation for the staff.It can be determined by actions and behavior of managers and related to psychological rewards. Heineken “We believe that if we take care of our people, our people will take care of us. That is why we offer our employees all the benefits and rewards their talent and hard work deserves. Here’s an overview of what our people receive. ” (Heineken Official Website-Career 2010) Heineken believes that there are needs for their staffs apart of salary, such as healthcare, training and development.
Comparison of Tsingtao ; Heineken [pic]Maslow’s, Alderfer’s and Herzberg’s theories of motivation Above is the theories of motivation which discuss what factors motivate workers to work hard and enjoy working. In my opinion, these two companies do well in motivation. They both offer benefits apart from salary and take care their staffs. For example, by Alderfer’s ERG theory, the firms should concerned with the development of potential and covers self-esteem and self-actualisation. Heineken believes the better trained you are, the bigger the impact you can have at Heineken. 4. 2 Leadership TsingtaoIn 2009, Tsingtao was awarded the best leadership development companies in China; the only one Chinese company has been awarded.
The experts believe that a hundred years Everlasting Tsingtao Brewery Company through ongoing cultural and institutional aspects of the building, in the continuity of leadership development, systems integration and scientific three dimensions has been the level of international companies, and the formation of The Company’s unique competitive advantage, it is more committed to international development of companies and learn from.Tsingtao Brewery focus on strategic echelon personnel training for key personnel the lead in establishing a "three-tier talent pool", including the Group's headquarters level (corporate headquarters), the center level (marketing and manufacturing center) and local (provincial and regional plant sales company ), To achieve a "basic personnel training center personnel to share, the group headquarters personnel accumulation " system of leadership training. Business leadership from the top down the whole system of organizations and leadership development to enhance professional competence of the bottom-up, so beer in Qingdao leadership development system, for senior management personnel, professional management personnel And manufacturing (or marketing) interface of the personnel, Tsingtao Beer were based on employee and business development strategies need to differentiate training.For example, for senior management personnel, to rotation, personnel exchanges, testing and tempering, AB exchange of best practices, leadership training, challenging goals, etc, the training team in practice, and for professional and managerial talents, places Capability mainly focuses on reserves, training, and career planning guidance” (??????? 2010) Heineken In Heineken, the leadership is an action-centre leadership. Group interaction analysis |Heineken |Tsingtao | |Ohio State leadership study |Structure |Consideration | |University of Michigan study |Production centre supervision |Production centre supervision | |McGregor,assumptions about people and work |Theory X |Theory X | |Blake and McCanse, Leadership Grid |Concern for production |Concern for production | Comparison of Tsingtao & Heineken I would better to say the leadership of Tsingtao is quite better than Heineken. Tsingtao believes the cohesiveness of the group as a working unit.In addition to system, but to make leadership development more effective landing, fully protected so that "the right people the right things dry", Tsingtao Brewery and innovative learning, including internal training, school-enterprise cooperation, best practices, exchange, etc The organizational systems to enhance leadership and within the company formed a perfect system and culture of leadership development By the Ohio State Leadership Studies identified two major dimensions of leadership behaviour: Tsingtao uses consideration leadership which reflects the extent to which the leader establishes trust, mutual respect and rapport with the group and shows concern, warmth, support, and consideration for subordinates.
A high consideration, high structure style appears to be generally more effective in terms of subordinate satisfaction and group performance. 4. 3 Learning & Knowledge Management Tsingtao Should focus on the knowledge level of explicit knowledge to strengthen their internal ordering, of tacit and explicit knowledge, the internalization of external knowledge; in the business level, from the technical, management and culture go hand in hand three dimensions, with Tsingtao IT systems to create a borderless knowledge networks and sharing platform, building a sound knowledge management, organizational structure, management and evaluation of incentives to protect the Qingdao Beer effective operation of the Knowledge Management System to build excellent knowledge sharing and learning culture in order to facilitate staff Conscious of knowledge management. In promoting these efforts, and gradually formed the three forces Tsingtao knowledge management, knowledge management to build long-term operation of the power mechanism. This is the knowledge management traction, driving force and support force, can be called "three of the one. " [pic] “Channel in the beginning of the construction of knowledge, Qingdao Beer identified the "central sector"knowledge channel management and channel management with reference to television channels to determine the overall knowledge of the construction program.Headquarters to establish a "China Central Television, " is divided into headquarters integrated channels, human resources channels, financial management channels, strategic management channel, channel marketing management, public relations management channels, etc.
; also modeled on the branch, "local television"model to establish the corresponding integrated channel And department channels. ” [pic] (???? 2008) Heineken Heineken University is the main content of the learning & knowledge management for Heineken. Functional and leadership training across the Heineken organization is coordinated by Heineken University, in cooperation with some of the world’s leading institutions in business training and education. Heineken University designs and delivers tailor-made learning solutions that support our ambition by: 1. Providing learning pportunities that are linked to our company strategy. 2. Linking our learning efforts to competence profiles required for leadership and functional excellence 3.
Delivering our learning solutions in the most effective formats with emphasis on action learning, e-learning and learning networks. 4. Maximizing the use of our regional/global learning resources to avoid fragmentation and duplication. 5. Facilitating best practice exchange between our business units and growing the links between our people globally. 6. Evaluating the effectiveness of development initiatives on improved personal and business performance.
Comparison of Tsingtao & HeinekenThere is no doubt to say that the Heineken University is the best for knowledge management to identify, create, represent, distribute and enable adoption of insights and experiences. Using Kolb’s Learning Cycle, students at the Heineken University can learn the knowledge easily. [pic] Kolb’s learning cycle 4. 4 Human Resource Management Tsingtao [pic] (???? N. D. ) [pic] (???? N. D.
) Heineken “Wherever in the world you join us from, you will enjoy a varied career both supporting and shaping the people agenda for those who make Heineken a global success story. As well as driving the development and delivery of the initiatives that make us an employer of choice, you'll play your part in attracting and retaining the talent which helps us grow our business.It is a huge challenge making sure that we have the right people, in the right place, at the right time but one which gives you the chance to develop new skills, as the business faces an ever changing marketplace. Through a varied agenda you will be expected to focus on ensuring that you drive a performance oriented culture. ” (Heineken Official Website-Career 2010) Comparison of Tsingtao ; Heineken In 2010, Tsingtao was awarded 2010 the best employer in China. This is a evidence how effective the Tsingtao’s human resource department is. They approach “suitable man do suitable work”.
They work hard to separate the job to different suitable workers.Moreover, they focus on training and keep learning to their workers. These benefits both individuals and organisation to 1. increase confidence, motivation, and commitment of staff, 2. provide recognition, enhanced responsibility, and the possibility of increased pay and promotion, 3. give a feeling of personal satisfaction and achievement, and broaden opportunities for career progression 4. help to improve the availability, quality and skills of staff 4.
5 Culture ; Diversity Tsingtao Tsingtao has created a new company culture – Tsingtao culture, to implement their policy and management strategy: [pic] (Tsingtao Official Website 2010) [pic] , the graph represents the upper half of the adaptability of companies and external, the lower part of the company's emphasis on coordination, the left side of the performance of the company's innovation ability, the performance of the company the right balance; 2, more attention will affect the internal rate of return on investment and employee satisfaction; 3, attention will affect market share and external sales growth; 4, reflecting the flexibility of products and services quickly and effectively adapt to changes in response capability; 5, the stability of the direct impact on return on assets, return on investment, return on sales; 6, upper and lower, left and right are contradictory unity, the key is balance and harmony, harmony profit growth point performance and value in the balance between growth; 7, integrity and harmony and cultural heritage of the Tsingtao Brewery, Tsingtao open and enrich the culture of innovation. Heineken The value and principle of Heineken: “Clearly recognisable standards and values are not a luxury: they are essential to our business at every level. Heineken is committed to sustainable development and as such, to optimising our financial results with minimal impact to our business environment. To do this, we abide by a number of governing business principles and three core values - respect and enjoyment and passion for quality - that reflect our passion for beer and our respect for our employees, business partners, customers, shareholders and all others who are connected to our company. RespectRespect for individuals, society and the environment is essential for sustainable business growth. As a brewer, we advocate a policy of responsible alcohol consumption, both for our customers and our employees. As part of local communities around the world, we cherish a corporate culture that embraces diversity and a business approach that honours local laws and regulations.
Recognising that rigorous environmental accountability is essential to our future success, we have implemented programmes to address three key areas of environmental concern: water, waste and energy management. Enjoyment Beer is all about enjoyment and for us, the social experience is inseparable from the beer.We sponsor music, sport, art and other commercial events because we think they are great ways for people to come together and enjoy themselves. We also try to positively express our values in the media, workplace, and in public life. Passion for quality Our business only works if we make great beer, but quality at Heineken goes beyond the products. It touches everything we do, extending, for example, to our social policy and to the significant investment we make in our employees. Business principles We try to impose trends rather than passively accepting, and suffering, from them.
We have identified fifteen themes in a worldwide programme on social accountability including anti-corruption, child labor, employee representation, sexual harassment and non-discrimination.We also have special programs on HIV/AIDS and responsible alcohol consumption. Since 1999, we have required all of our operating companies to develop these programmes in phases as an integral part of their activities. ” Comparison of Tsingtao ; Heineken Tsingtao has paid a lot of attention in the development of the Tsingtao culture. It really helps the policy implement and management strategy of the firm. Workers also get a brief and gain sense of belongings to the firm. There are some benefits for a strong culture in a firm: 1.
Creates a stronger employee commitment to the organization. 2. Aids in the recruitment and socialization of new employees. 3.Fosters higher organizational performance by instilling and promoting employee initiative 4. When accepted by employees culture increases the authority of management because they are motivated to achieve organizational objectives 4. 6 Information Technology Tsingtao [pic] In the official website, there is an electronic platform for workers or customers to give comments to Tsingtao.
It can help improve the services or products of the firm. There is also job employing function on the official website, which can organize the information of employees for time-saving. Company’s background, belief or news can be also founded on the official website. Heineken Underpinning Heineken's entire global operation is our sophisticated IT infrastructure. This bedrock of our business ensures we have the technologies at our command to keep operations running as smoothly as possible. But it is not merely technical knowledge you will need in this division of our business. We will expect you to get to grips with the commercial realities we face, enabling you to design, develop, implement and support the many different systems that are so vital in a competitive international market.
” (Heineken Official Website-Career 2010) [pic] A centralized information system cans effective help the operation in different areas.Also the detailed Company’s background, belief or news can be also founded on the official website. We can also found the information of the company in different countries. Comparison of Tsingtao & Heineken Both these two companies use IT for: 1. Use IT to Manage the Organisation’s Knowledge Resources 2. Use IT as a Communication Tool 4. 7 Communication Tsingtao Online feedback platform is useful for receiving feedbacks from customers.
E-mail is well used in daily operation. Heineken Heineken is a global international company. There are many businesses at many countries. E-meeting and long-distance phone calls are useful technology for business meeting. E-mail is well used in daily operation.Comparison of Tsingtao & Heineken As the organization structure of Heineken is clearer than that of Tsingtao, the communication between departments are more effective than that in Tsingtao. 5.
Conclusion [pic] As the international financial crisis did not bring too much impact to China’s beer market, the national output volume of beer reached 429. 4 million hl, representing an increase of 4. 7% comparing with helped it be the largest beer market in tern of output volume in the world for successive years. Tsingtao is a fast growth company. Its famous management culture and the human resource strategy help the firm to become the most successful beer company in China.In order to share the global market, Tsingtao should learn from other international company likes Heineken. One of the main improvements is the organization structure.
It should be more clear and effective for global business development. I hope that Tsingtao will be success in the following years.