Huawei Technologies, based in China, is the world’s largest maker of telecommunications equipment and second-largest maker of cellphones. It builds fifth-generation (5G) wireless networks for sharing information and controlling Internet-connected products such as self-driving vehicles and robot-operated factories. The federal government has cautioned that Huawei technology can invade privacy and has charged the company with stealing intellectual property from several U.S. companies.
The United States alleges that Huawei’s products would enable it to fulfill requests from the Chinese government for information about users. This concern is based on a Chinese law requiring businesses and individuals to assist in intelligence gathering if requested to do so. If Huawei were to comply with such a request, China could obtain information about Internet use from Huawei’s monitoring of networks using its equipment.
The U.S. government and businesses have also accused Huawei of stealing intellectual property such as patents. A criminal filing charged Huawei employees in China with pressuring U.S. colleagues to share information about a competitor’s robot used for testing mobile phones. The United States, besides enforcing laws related to cybersecurity and intellectual property theft, has urged businesses and governments to avoid signing contracts with Huawei.
Huawei has denied charges of using its technology to spy and said it would sign sales agreements that ban spying. Although the ban on U.S. components poses a serious challenge, because half of Huawei’s microchips come from U.S. suppliers, the company anticipated the ban and built an inventory of parts to use while it prepares a way forward. Meanwhile, Huawei’s product developers in China are working around the clock to write software and design components it can make there, instead of importing.
The Chinese government has stood firmly behind Huawei. Support from the government has totaled $75 billion in tax waivers, loans, lines of credit, grants, and discounts on land purchases.
In this environment, Huawei has generated profit growth by offering a wide range of reliable, advanced products coupled with financing at favorable terms. In 5G, few competitors are as far along in the development of the technology. As of early 2019, Huawei had participated in the development of 10 countries’ 5G networks and had plans to do so in 20 more countries by year-end. Low prices and financing are especially helpful for selling in high-growth developing markets such as Vietnam and Zambia. When the U.S. ban on selling components was announced, sales of cellphones dipped and then steadied. Huawei ended the year with record profits despite growth slightly below expectations.

Questions

1. Briefly summarize the threats and opportunities you see for Huawei in its task environment. Consider suppliers, distributors, customers, and competitors, if applicable.
2. Briefly summarize the threats and opportunities you see for Huawei in its general environment. Consider economic, technological, sociocultural, demographic, and political/legal forces, if applicable.
3. In Hofstede’s model of national culture, China has been found to score relatively high on collectivism and very high on long-term orientation. In light of what this chapter says about those dimensions, how would you predict that Huawei’s Chinese managers and employees will deal with their opportunities and challenges?