Moreover, say Konka's managers, the incentives, while generous by local standards, are not attractive enough for outside investors.
Due to the frequency of electrical stoppages, the mayor demanded that Chongqing Konka's steady supply be given top priority.
Land for Chongqing Konka, for instance, was granted at one-quarter of market rates.
Luckily for Konka, the workers began to accept the new contract system as productivity and thus wages and bonuses rose.
Then, in March last year, Konka set up Chongqing Konka with the Chongqing No. 3 Radio Factory, investing 27 million RMB.
In 1995, Konka boldly plowed 18 million RMB into Shaanxi Konka Co.
In the mid-1990s, Shenzhen's Konka Group, now a major conglomerate making everything from TVs to mobile phones, was the lone wolf venturing warily into strange and unknown territory.
Structurally, Konka introduced some reforms that were not possible before such as replacing multi-year (three-five year) contracts with single-year contracts for all staff, including technicians and administrative cadre.
Haier in white goods, Legend in computers and Konka in television sets are all examples of Chinese firms with strategies based on their own brands or other intellectual property.
In order to the placate the workers and deal with extraneous but sometimes vexing personnel and welfare issues, the managers of the old factories were named chairmen of the JVs with Konka only sending in its general manager and his deputies for key departments.
The multinationals, off to a huge head start in the 1990s, retained their lead in the huge Chinese handset market over domestic firms entering the market like TCL, Ningbo Bird, Konka, Datang, Panda, Amiosonic, Longcheer and many others (many firms were former state enterprises that had extensive experience manufacturing TV sets, radios, and pagers).
FORBES: Chinese Phones For Sale: Cautionary Tales From The Emerging Markets
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