Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis Harvard Case Solution & Analysis

Xinxing Dutile Iron Pipe Company is a Chinese state-owned enterprise (SOE), which produces cast tubular products and steel products. The company grew to become the dominant player in the industry of plastic metal pipe, own more than 40% of the domestic market and 20% of the world market. Historically, Xinxing Pipes Control system was based on the standard cost. This system worked well until the global financial crisis in 2008, where demand for steel has decreased dramatically as a result of intense price volatility, both up and downstream. The current system of management controls do not respond to a fast and efficient way. As a result, Xinxing Pipes reform of management control system. The reform was based on two main ideas: (1) closely monitor the market to improve communication between departments, to take coordinated action, and quickly respond to external changes in the market, (2) changes in economic-oriented model of production units "in the profit-oriented model." The two leading ideas gave birth to "Production and production and sale of Quick Contact" and "Imitation of legal entities." "Hide
by Ning Jia, F. Warren McFarlan, Xiaohui Li Source: Tsinghua University 20 pages. Publication Date: December 30, 2011. Prod. #: TU0023-PDF-ENG

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