The firm had grown to become a dominant player in the ductile iron pipe industry, holding more than 40% domestic market share and almost 20% worldwide market share. In the past, Xinxing Pipes' management control system was structured on standard costs. This system worked well until the international monetary catastrophe in 2008 where market demand for steel fell rapidly, resulting in extreme price changes in both downstream and upstream.
The present management control system did not react in a fast and efficient manner. Consequently, its management control system was reformed by Xinxing Pipes. The reform was based upon two core ideas: (1) keep close watch available on the market, increase communication among departments, take coordinated activities, and respond quickly to external market changes; (2) transform the production divisions' price-focused model into a profit-centered model." These two directing ideas gave birth to the "Generation-Supply-Sales Rapid Linkage" as well as the "Simulated Legal Entities".
PUBLICATION DATE: December 30, 2011 PRODUCT #: TU0023-HCB-ENG
This is just an excerpt. This case is about LEADERSHIP & MANAGING PEOPLE
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