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BUSI 2311: Principles of Management

Section 103

Huawei Project Report

Fall Semester 2018

Instructor: Dr. Christopher John Voisey

Page Length: 12

Submitted by:

Arister Savio Fernandes- 201700724

Abdulrahman Al Bassam- 201700130

Ali Almarhoon- 201502050

Sulaiman Al Tamimi- 201700547

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Huawei- A Global-Leading ICT Venture

Introduction

In today’s business era, Huawei Technologies stands as one of the leading communication and

networking firms in the Information and Communication Technology (ICT) industry that deals in

competitive products and networking solutions. Dating back to its establishment in 1988, Huawei

was domestically recognized as a prime distributor of Private Branch Exchange (PBX) products.

Ren Zhengfei, CEO and founder, is remarkably known as the ‘magic weapon’ of the company as

a result of his strong technical proficiency from using military equipment in the past. As

Huawei’s position in the Chinese market developed in the late 1990’s, the company took to

international venturing by seeking and capturing new opportunities in foreign markets. Acquiring

an international presence improved Huawei’s client base and enabled them to engage in strong

alliances with companies in regions such as India, Sweden, United States, Ireland, Russia, and

Indonesia. Moreover, it helped them acquire a unique and competitive advantage in its value-

chain. Although this accomplishment involved huge investment in R&D and other challenges,

Ren was able to transform Huawei into a Globally Integrated Enterprise (GIE). Today, the

company is recognized as a leading smartphone manufacturer and distributor across the globe. In

addition, Huawei has always been consistent with improving the future quality of life through

advanced communication technology by translating it into competitive products and solutions for

its customers (Luo, Cacchione, Junkunc, & Lu, 2011).

The objective of this paper is to analyze Huawei’s success by examining its HR Department’s

hiring strategy, corporate culture, corporate strategy, and role in the achievement of social

justice. The methodology of research includes secondary sources of information such as online

links, articles published by business scholars in corporate journals, etc.

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HR Hiring Strategy of Huawei

Since Huawei is a firm that is strongly focused on innovating technologies that surpass the

imagination of the public, the company would definitely require to hire human resources that

possess creative ideas and strong human capital in technical proficiency.

According to Chan (2018), Huawei has apparently adopted a new approach towards the

recruitment of internal staff through which it reserves placements for fresh university graduates.

This is because introducing new blood from local and overseas universities can facilitate

innovative creations due to the latent skills and talents of the new employees. Apart from fresh

graduates, Huawei also externally recruits candidates with 12 to 15 years of experience in the

fields of IT, cloud computing, Artificial Intelligence (AI), data security, etc. Regardless of such a

strategy, Huawei enthusiastically believes that its employees are the main assets of the company,

for they drive the organization along the right road and in the right direction.

The company will further continue to attract global talent under its current vision because

adopting an open approach can further lead to workforce and cultural diversification, and also

the absorption of new energy. For example, in 2016, 38% of Huawei’s finance department

consisted of university graduates from globally reputed universities such as Harvard, Oxford,

Cambridge, Yale, etc. Moreover, these members possess common qualities- hardworking, time

management abilities, leadership and teamworking skills- that make the organizational

workforce more diverse, inclusive and innovative (Weiwei, 2018).

Corporate Culture

Corporate culture refers to the amalgamation of standards, attitudes, beliefs, vision, and mission

of an organization. It is an essential component that significantly contributes to the success of

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any business venture. As such, the development of corporate culture is always based on the

organization’s structure, strategies, approaches to labor, goal setting and objectives. This section

analyses the corporate culture of Huawei and how it impacts on the current performance and

competition from other potential companies.

The first prioritized effort in Huawei Company is the employee welfare by ensuring that

there is a shared objective between the management and the workforce. Due to dynamics in the

business environment along with the complexity of internal demands, the company has

formulated a talent management system by which proactively unites the different minds in

having a common business purpose. Additionally, Huawei intends to introduce policies that

promote strong performers and provide incentives that will help in growing the available

opportunities. The company has other strategies that involve integration of various talent groups.

These groups incorporate different structures such as professionals, experts, and commanders

who are arranged differently in their unique abilities (Huawei’s Culture, 2017).

Work Diversification is another strategy that Huawei utilizes in the maximization of profits. For

instance, the company has approximately 180, 000 employees who come from more than 161

countries worldwide. Huawei has launched diversified initiatives which are based on different

factors such as age, gender, religion, and race. Additionally, the company ensures gender

equality in the workplace along with strict measures and regulation against gender biasness.

Women are equally recognized as men in the management of the company where more than 7%

of the top management team are women. The initiative also involves hiring local employees, who

significantly contribute to the understanding of different cultures in various countries (Huawei’s

Culture, 2017).

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Huawei has developed a culture that ensures openness and inclusivity of employees from

all domains. The company believes in the development of a stable human capital that

substantially contributes to long-term success. Through inclusivity, Huawei can consolidate

different talents which are crucial elements that help to overcome business environment

dynamics (Huawei’s Culture, 2017). For instance, the company started with the promotion of

more than 4,500 top performing employees. Such approaches have influenced their performances

and growth opportunities since the company is interested more in responsibilities and results.

The company aspires to improve on these numbers in 2018, through provision facilities and

adoption of approaches that will enhance their qualifications and competency. To enhance the

perfection of employees in different fields, Huawei has already built two bases in Guizhou and

Guangdong. These facilities have significantly helped the employees in learning new and

advanced skills that provide high values services to customers. Additionally, the company has

developed a platform known as iLearningX, which is used to train employees on how to combine

mobile and desktop platforms.

Another crucial component of Huawei culture is a compensation and benefits system. The

system has competitively benefited the company through the provision of reliable data that helps

in awarding employees based on individual and corporate performance. For instance, the

company formulated a time-based unit plan in 2017, which intends to include employees in

sharing of Huawei’s benefits. Additionally, the company provides social insurance, medical

assistance, and commercial insurance as employees’ benefits.

The fifth component in Huawei’s culture is the creation of a favorable workplace where the

company has built a global value chain. Huawei is a global company that invests in more than

170 countries and requires formulation of human resources regulations that aligns with standards

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of local and industrial laws. Additionally, the company has developed an Employee Relationship

Department, which focuses on understanding the plight of employees (Huawei’s Culture, 2017).

Corporate Strategy

Huawei’s mission is based on achieving a sustainable management system, operating with

integrity, improving communication and establishing a harmonious business ecosystem (Huawei,

2018). Its corporate strategy is associated with low prices, rational investments in R&D,

innovation and brand popularity. The company’s products have generated high sales through cut-

off prices; with a maximum difference of 70% from its competitors in its B2B model (Chong,

2015). However, since Huawei is currently focused on a B2C model, the executives are

strategically adopting innovative methods of technology, and incurring annual investments-

worth 10% of Huawei’s annual profits- in research and development of advanced technology to

satisfy customer’s needs.

Initially, after the company began adopting a B2C business model, it was faced with the

challenge of improving the popularity of its brand internationally. Chong (2015) mentions that

the development of Huawei’s brand image was a slow process as consumers outside China

perceived that Chinese products were of inferior quality due to their low prices and the ‘closed

door’ approach of Chinese firms. Eventually, the company attracted global customers through

cost-effective marketing tactics such as online retail channels, digital marketing, brand

campaigns, and sponsorships.

The key success factor of Huawei’s organizational strategy in today’s business world is

innovation, which is characterized by openness and cooperation. Survival in the competitive

technology industry can be challenging for entrepreneurs. But by placing innovation at the core

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of its operational strategy, Huawei has been able to adopt a ‘customer-centric’ approach and

capture the market from every direction. According to Ken Hu (2017), Rotating CEO and

Deputy Chairman of Huawei, the company believes that collaborating with open markets that

promote fair trade practices and competition can offer greater opportunities and industry support,

as compared to closed markets. Hu also mentions the various approaches that enable Huawei to

implement successful future-oriented technologies and satisfy customers at higher speeds and

low costs. These approaches include:

Investments in R&D on an annual basis for the purpose of discovering innovative

technologies that could be implemented to raise the market for their smartphones and

other telecommunication products. Such investments are also made to integrate global

resources on a high scale with maximum efficiency. Moreover, investment in education

and infrastructure has also proved to enhance Huawei’s innovation capabilities by

attracting competent human capital and sustainable technologies.

Emphasizing innovations on the basis of applications, product design and quality, and

technological fundamentals. While application and product innovations remain tangible,

Huawei strongly focuses more on the intangible innovations in fundamental technology

due to its crucial success in accelerating product and application innovations.

Maintaining transparency and openness with its global partners has enabled Huawei to be

cooperative at different levels. Since customer requirements are the direction of its

innovative strategies, the company has also engaged in collaborative innovations with

international customers and governments in order to remain consistent with the market

and create substantial value for its products and services.

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Respecting and protecting innovative creations by securing intellectual property rights

(IPR). Huawei has played a significant and legal role in protecting its IPR’s to benefit

from the rewarding outcomes as a result of their innovative technologies. The company

also respects the IPR’s of its partners and legally uses them through cross-licensing and

fee payments to further innovate technologies and secure them at greater levels.

Huawei’s Role in Achieving Social Justice

In achieving social justice, Huawei plays an important role in resolving two major issues in the

ICT industry: privacy protection and cyber security. The executives of the organization are

determined to mitigate these issues not just because of legal requirements, but as a means of

corporate social responsibility. Since the technology industry is subject to disastrous security

threats, it poses a major challenge for firms to develop counter measures against them. However,

Huawei’s approach to addressing privacy protection and cyber security is in fact distinct from

other telecommunication companies.

Addressing Privacy Protection:

According to a report on Huawei’s official website (2018), it stated that Huawei complies with

applicable and practical laws regarding privacy protection globally. Such laws include the EU

General Data Protection Regulation (GDPR). In addition to law compliance, Huawei also

ensures that its employees are well-trained with regard to protecting private information about

the company’s customers, clients, and suppliers. In accordance with the GDPR requirements,

Huawei maintains a record of processed data in its database and implements emergency response

mechanisms in the events of personal data leak to prevent exposure of information in the public

domain. Moreover, to ensure consistent compliance with data security rules and regulations,

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Huawei regularly organizes internal audits for thorough technical and process assessment. In a

nutshell, Huawei has extensively adopted measures to ensure that personal data of the users of its

products are fully secured from manipulation, biases and other types of technical fraud. The

company vows that it will continue to evolve its products and services to ensure that user data is

protected, secured, and prevented from exposure to risk (Huawei Privacy, 2018).

Countering Cyber Security:

With the accumulation and development of big data, technological innovations such as Artificial

Intelligence (AI), Machine Learning (ML) and User Interface (UI) Intelligence, continue to grow

on an enormous scale. However, the issue of security with these technologies becomes a

challenge to be accomplished by Huawei. According to an AI Security White Paper (Huawei

Cybersecurity, 2018), the prime cause of security breaches in these technologies is due to lack of

explanation regarding the functions of these systems. Such a drawback can make these systems

vulnerable to cyber attacks like attacks on data integrity, model integrity and model

confidentiality. However, on the bright side, Huawei counters these attacks by implementing the

following cyber security measures for AI systems:

Attack-Defense Security :

Under this measure, Huawei focuses on the implementation of various defense mechanisms to

prevent cyber crimes such as data hijacking, trap door attacks, SQL injection, etc. One example

of a defense control methodology implemented by them is mutation-testing-based detection of

cyber invasions. This control measure contributes to data security by detecting the source of the

attack on the company’s AI system and developing defense strategies for a counterattack. Such a

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technology can also be installed in existing systems to prevent security breaches by white collar

criminals (Huawei Cybersecurity, 2018).

Model Security :

Huawei ensures the security of its AI models by ensuring their verifiability and reliability in

securing relevant data in the database systems. Moreover, it also assesses whether the manpower

of the data security divisions can comprehend the functionality of AI technologies, so that they

can be trained to tackle various cyber security issues and prevent the AI systems from being

manipulated (Huawei Cybersecurity, 2018).

Architecture Security :

To ensure architecture security, Huawei analyzes the characteristic features of different AI

models, the risks associated with the use of the models and the services offered within the

system. Based on such analysis, the firm decides and implements a particular architectural design

for the chosen model, and also deploys security mechanisms for each service within the model.

For instance, fusing, isolation, detection and redundancy are some methods of security

deployment used by Huawei to increase the robustness of its AI systems (Huawei Cybersecurity,

2018).

Conclusion

As the information and communication technology industry continues to manifest enormous

innovations in the future, Huawei will definitely attempt to seize these innovative opportunities

for its betterment. Had it not been for Ren Zhengfei’s ideal strategy of international venturing,

Huawei would not be one of the gateways to innovation on a large scale today. With the

integration of global resources and open market support, Huawei is determined to continue being

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innovative in the creation of its ICT products and services. Moreover, it aims to look ahead into

the future and fulfill market demands at lower costs. Huawei is also committed to bridging the

digital divide through innovation in order to ensure ubiquitous access to network connections,

telecom services and advanced communication technologies to every user of its products. Also,

with the issues of cyber security and privacy protection posing a major concern, Huawei will

willingly counter these issues in the future for the social concerns of its stakeholders in the

business environment.

Today, Huawei is the leading future of the ICT industry with the variety of technical accessories

and smart devices it deals in. According to a news report by CNBC (Kharpal, 2018), Huawei’s

latest Mate 20 smartphone series is known to overtake Samsung’s Galaxy Note 9 and Apple’s

latest model of the iPhone XS. As a provider of ICT services, Huawei is striving for the

implementation of 5G technology, advanced Artificial Intelligence developments, and

augmented reality. The company will face tough challenges in capturing the technology market

in the future; yet, Huawei’s innovative strategies will never prevent it from achieving its market-

oriented objectives.

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References

Chan, S. (2018, October). Huawei’s Latest HR Hiring Direction. Human Resources. Retrieved

on 13th November 2018 from: https://www.humanresourcesonline.net/huaweis-latest-hr-

hiring-direction/

Chong, G. (2015). Chinese Telecommunications Giant Huawei: Strategies To Success. Paper

Presented at the Nanyang Technopreneurship Case Centre, Singapore.

Hu, K. (2017). ICTs & Innovation. Retrieved on 30th November 2018 from:

https://www.huawei.com/en/about-huawei/executives/articles/hw_332172

Huawei (2017). Caring for Employees. Retrieved on 13th November 2018 from:

https://www.huawei.com/en/about-huawei/sustainability/win-win-development/

develop_love

Huawei (2018). Privacy and GDPR. Retrieved on 1st December 2018 from:

https://www.huawei.com/en/privacy-and-gdpr

Huawei (2018). Strategy and Policy. Retrieved on 30th November 2018 from:

https://www.huawei.com/en/about-huawei/sustainability/management/manage_strategy

Huawei (2018, October). AI Security White Paper. Building Multi-Layer Defense to Cope with

New AI Security Challenges. Retrieved on 13th November 2018 from:

https://www.huawei.com/en/about-huawei/cyber-security/whitepaper/ai-security-white-

paper

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Kharpal, A. (2018). CNBC. After overtaking Apple in smartphones, Huawei is aiming for No. 1

by 2020. Retrieved on 16th November 2018 from:

https://www.cnbc.com/amp/2018/11/16/huawei-aims-to-overtake-samsung-as-no-1-

smartphone-player-by-2020.html

Luo, Y., Cacchione, M., Junkunc, M., & Lu, S. C. (2011). Entrepreneurial Pioneer of

International Venturing: The Case of Huawei. Organizational Dynamics, 40(1), pp. 67-

74.

Weiwei, H. (2018, February). Huawei’s Views and Strategies Regarding Talent. Paper Presented

at the 2018 Mobile World Congress, Barcelona, Spain.