Jan 03 2005

Chinese Buyer of PC Unit Is Moving to I.B.M.’s Hometown

These days, every employee here gets a birthday gift, something a multinational company might be expected to do in this age of feel-good corporate management.

The problem is that people in China do not traditionally celebrate birthdays.

But that is changing. And so is Lenovo. It is trying to become a global company with its purchase of I.B.M’s personal computer business for $1.75 billion, and handing out birthday cakes is just part of the process of evolving into a multinational corporation.

To further globalize the company, however, Lenovo will do something even bolder: it will move its headquarters to Armonk, N.Y., where I.B.M. is based, and essentially hand over management of what will become the world’s third-largest computer maker, after Dell and Hewlett-Packard, to a group of senior I.B.M. executives.

American multinational companies outsource manufacturing to China. Why can’t a Chinese company outsource management to the United States?

Preparations are already under way in Beijing. For the last few months, all vice presidents have been required to study English for at least one hour a day. The chairman says he has read books about Bill Gates and Andrew Grove. And the chief executive of Lenovo has agreed to give up day-to-day management of the company to assume the role of chairman.

Lenovo’s challenge will be to meld radically different corporate cultures.

“Neither culture should be the de facto culture,” said Martin Gilliland, an analyst at Gartner Research. “They have to start a new one. Can they develop a new Lenovo business culture? That’s one of the keys to success.”

And the new language for the company is English, company officials say.

Lenovo officials say they are studying American business history, and the chief executive lists The Harvard Business Review as part of his regular reading.

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Hat tip: Going Global

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