Acer Case Transnational Management Essay

1. When Multitech was starting up, Stan Shih preached frugality in the form of not spending more money then necessary and not being wasteful with the resources the money spent provided. Shih went as far as creating a campaign that focused on turning lights off, using both sides of paper, and traveling economy class. This is vastly different then the philosophy of other startup companies that spend more money then they have available and quickly go bankrupt. Secondly, Multitech made employment very attractive through delegated responsibility. Most companies have a top-down management approach where all decisions are made at the top and employees need to do what they’re told and keep their ideas to themselves. With Multitech, there was a sense of freedom, which led to the recruitment of bright young engineers. That type of creative freedom, as long as it’s for the betterment of the company, breeds increased productivity. Third, to compensate for offering no more then a modest salary, Multitech offered key employees equity in the form of ownership in subsidiary companies. Can you imagine just coming out of college and being offered ownership in a company? I would take a little less per hour for that opportunity. Imagine if any of us had such an opportunity with Apple or Facebook. Wow! Lastly, joint ventures allowed Multitech to expand its sales into new territories without the risk of hiring more people or raising more capital. In other words, Multitech increased their market share without taking on additional expenses or putting in more money. To sum up, keeping spending under control, hiring the best minds and keeping them happy, and expanding for â€Å"free† leads to an impressive startup. 2. Leonard Liu added value to Acer by making employees responsible for their actions. Liu did this by introducing productivity and performance evaluations. Before Leonard Liu came on board, employees did not have a profit and loss responsibility and as we know, the difference between a successful company and an unsuccessful company is profit. Now, if an employee wanted freedom to make his own decisions, that employee had to make sure his freedom produced a profit. Before Liu, there was a lack of structure within the company. Liu brought a professional management structure to Acer by establishing standards for intra-company communications to make sure everyone was on the same page. Most importantly, Liu created structure within the company by creating RBU’s and SBU’s. With this change, organizations, subsidiaries, and marketing companies under the Acer umbrella all had specific responsibilities instead of doing a little bit of everything. Unfortunately, some of the changes Liu implemented seemed to do more damage then good, which eventually led to employees questioning his judgment and implementing his directives half-heartedly. The supportive family approach was gone having been replaced with an iron-fisted form of management. Employees were not responding. The change was too drastic. Something in between Shih’s approach and Liu’s approach would have probably been more productive. Also, frugality was replaced with lavish spending on accounting and law firms and full acquisitions of companies instead of joint ventures, which put all the financial responsibility on Acer. If the goal was profit, Liu was losing just as much, if not more money. 3. In regards to development of the Aspire, I believe a local-for-local model was used. The Aspire was the first product designed and developed by an RBU, in response to a locally sensed market opportunity. Acer America and other RBU’s felt that Acer’s Taiwan-based SBU’s were too distant to develop product configurations that would appeal to diverse consumer and competitive situations around the globe. The second aspect of the local-for-local model requires that subsidiaries use their own resources to develop products. With that criteria, Mike Culver, AAC’s Director of Product Management, commissioned a series of local focus groups to explore opportunities in home computing. After the focus groups showed a potential for a consumer PC, Culver hired Frog Design to create a prototype for the Aspire. By using focus groups and hiring Frog Design, a company independent from Acer, Culver was using resources available to him outside of the Taiwan home base. From start to finish, the development of the Aspire happened in the US as a product initially for the US market. 4. Shih should allow the development of the Aspire to continue as long as implementation is transferred back to the SBU’s in Taiwan. If all of the company’s engineering and production expertise is located in Taiwan, those with the most expertise should handle the launch of such an expensive product into a highly saturated and competitive market. Shih would also need to make sure that the design of the Aspire stays as-is to achieve economies of scale on production. As far as marketing, I see no problem with different markets customizing the marketing plan for the Aspire. Companies all over the world implement different marketing strategies for a product depending on the market. For example, Diet Pepsi is marketed as Pepsi Light in some countries outside of the US. What may be an important feature of the Aspire in the US market might not be as important in a different market.