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Economist

Chinese industry: From guard shack to global giant

January 10, 2013

LENOVO started humbly. Its founders established the Chinese technology firm in 1984 with $25,000 and held early meetings in a guard shack. It did well selling personal computers in China, but stumbled abroad. Its acquisition of IBM?s PC business in 2005 led, according to one insider, ?to nearly complete organ rejection?.Gobbling up an entity double its size was never going to be easy. But cultural differences made it trickier. IBMers chafed at Chinese practices such as mandatory exercise breaks and public shaming of latecomers to meetings. Chinese staff, said a Lenovo executive at the time, marvelled that: ?Americans like to talk; Chinese people like to listen. At first we wondered why they kept talking when they had nothing to say.? Two Western chief executives failed to turn things around. By 2008, as the financial crisis raged, Lenovo was bleeding red ink.
Given all this, its recent success is startling. In the third quarter of...

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