Reconsideration of NVC's Storm: The Transformation of China's Private Enterprises

The fierce competition between Wu Changjiang, the founder of the domestic lighting industry, and the control of the investor, has been going on for more than two months. The full-scale outbreak of NVC’s “infighting” not only caused all employees to strike, production stopped, but also It is affecting the capital market, and the company’s stock has been suspended since it was hit.

The NVC incident has already had a serious negative impact on the operation and development of NVC. Some media pointed out: NVC lighting is currently developing in the worst direction, and the future is slim. The NVC case just poised to the pain of the development of Chinese private enterprises - capital operation and modern management system.

Changing private enterprises is to find death, not to change private enterprises is to die
The history of the development of private enterprises in China, most companies rely on individuals, couples or families to start from scratch, the rivers and lakes are more habitual, and the development is free and fast. With the continuous growth of private enterprises, it is necessary to seek greater development through capital operations. Ever since, listing, strategic investor introduction, equity change..., private enterprises have gradually entered the capital market.

Throughout the history of NVC lighting, the starting point, development, capital, and predicament are the same as those of many private enterprises.

In 1998, NVC was established, and in a short period of ten years, it quickly grew into an industry leader with an annual turnover of tens of millions of dollars. In 2005, Wu Changjiang threatened dealers, leaving the other two major shareholders forced to leave; 2006 Safran invested $22 million in NVC; in 2008, Goldman Sachs invested; in 2010, NVC Lighting was listed on the main board of the Hong Kong Stock Exchange... Like many private companies, as the business developed, NVC began to capitalize Dance together.

However, the introduction of capital to private enterprises is not only a large amount of funds and a vast market, but also a manifestation of backwardness and malpractice in the management system of enterprises. The transformation from the founder's individual company to the public company, from the "individual dictatorship" to the "system management" has become the "transformation pain" of private enterprises, which has caused the development of private enterprises to fall into bottlenecks and obstacles.

Zeng Shuiliang, an expert on China's famous private enterprise governance and management integration, pointed out that changing private enterprises is to find death, and not changing private enterprises is waiting for death. Usually, the failure of the management transformation of private enterprises lies in the fact that when it tries to create a brand-new management model, it fails to establish a new set of cultural philosophy and values, and builds a new set of foundations. Management method. Rather, it still uses old-fashioned ideas and management models to operate a new management revolution. As a result, this management change is not uncommon and ultimately fails.

Private enterprises have a disaster, and organized conflicts
In the process of continuous growth of private enterprises, with the expansion of scale, the increase of personnel, the formation of organizational structure, due to the lack of scientific and rational organizational management and organizational structure, most private enterprises will face the hidden dangers of organizational conflicts, and even face fierce Organizational conflicts, such organizational conflicts contain huge conflicts of crisis...

From the rising sun to Wahaha, Gome, and now to NVC, many private enterprises have repeatedly staged organizational conflicts caused by "transformation."

In 2005, Wu Changjiang and the two founders of NVC launched a game, although in the end Wu Changjiang relied on the strong support of the dealers to stage the "king of the king", the other two founders were forced out, but this process caused NVC to Heavy hit, bad health.

Now, NVC seems to be repeating the scene of the year, employees strike, production pauses, stocks are suspended... Behind this, no matter what is wrong, whether it is Wu Changjiang’s return, or the foreign investors headed by Saifu completely control the mine. The damage that NVC has suffered has been self-evident.

If this crisis cannot be solved in a timely and satisfactory manner, in the end, NVC's shareholders, investors, employees, dealers, etc. will all suffer losses. The NVC case is also doomed to be The situation of losing both sides and losing all.

In this regard, private company governance expert Liu Shaohua believes: NVC's recent internal disputes, there is no so-called investor joint exclusion of the founder, this is the result of the company's standardized operation. In a large-scale listed company such as NVC, the company's decision-making should follow the three principles of “law, rules, and contract”, and Wu Changjiang’s actions during the period as chairman of the board violated these principles. With a strong "river and lake" meaning.

With the entry of the real economy into the adjustment period, in recent years, the contradiction between entrepreneurs and investors has become increasingly prominent. How to make private enterprises successfully realize the transformation from individual enterprises to public companies? How to make private enterprises stronger and bigger? It is worth pondering.

As the case of NVC shows, before the docking with the capital, the company has the final say, and after docking with the capital, the private enterprise is no longer a certain enterprise. As a public company, it must be invested. Talk to shareholders.

In other words, Chinese private enterprises must break through the bottleneck, must abandon their individual grass-roots management model, establish an efficient and transparent modern enterprise management system, and strictly enforce and enforce it, otherwise they will face punishment or even eliminate. In this regard, some media pointed out: As a company with perfect internal and internal corporate governance, if there are no rules and laws, returning to the rule of humanity in the wilder period, this is a great retrogression of the modern enterprise system.


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