TsinghuaTongfang

Case Summary:

This case illustrates the control systems used at upper management levels by a Chinese high-technology company. The case describes a number of bureaucratic controls that limit the autonomy of the company's managers. It also describes the company's performance evaluation and incentive systems and the company's desire to add a stock option plan when and if doing so becomes legal in China. US students, in particular, might be surprised that a Chinese corporation has such lucrative incentive plans. Historically such plans were rare in China, but they are becoming more popular as China builds its "socialist market economy."

Case Questions:

1. Evaluate theTsinghuaTongfangcontrol, performance evaluation, and incentive systems. What changes would you suggest, if any?
2. Should the company implement the proposed employee stock option plan?