Lining: Confusion Between Decentralization And Centralization Of Power

After a wave of executive turnover in the first half of 2011, the Li Ning Co Ltd personnel crisis did not end.

Recently, vice president and CPO (chief product officer) Xu Maochun, director of the government and public affairs department Zhang Xiaoyan also confirmed his resignation.

The industry generally believes that the aftershocks caused by Lining's poor performance will continue.

Everyone is criticised Li Ning Co brand.

At the beginning of the new brand remolding in Lining, besides CEO Zhang Zhiyong, there were four top executives, namely, the official CMO official COO, who had resigned, COO chief operating officer Guo Jianxin, CPO chief product officer Xu Maochun, and CFO chief financial officer Zhong Yiqi.

Five executives took part in the management. Even during the period after the bid was changed, Zhang Zhiyong placed his public affairs department and information technology system in CFO Zhong Yiqi.

Such an internal structure seems reasonable, and each person manages one area to report to CEO.

However, for what purpose, Zhang Zhiyong set up a new functional department under the position of CMO -- BI (Brand Initiative, brand strategy planning department).

The establishment of BI aims at solving the problem of Lining's brand and product planning. It not only controls the life cycle of the brand, but also integrates company's brand strategy, sports marketing strategy and product strategy, and involves six major business categories such as basketball, running, women, sports life, urban light sports, badminton and so on, because of the brand, sports marketing and product planning, and the 5 senior directors of the BI department have led five major categories (badminton is added later), and their jurisdiction over COO and CPO has crossed.

After the establishment of BI and so on, the product planning originally assigned to COO is divided by two airborne CMO, CPO and 5 senior directors.

It seems that power has been effectively decentralized and checks and balances, but this has led to a coincidence between the functions of a department and its chief operating officer.

The disputes arising from such disputes, such as unclear rights and responsibilities, have seriously affected the operation of Li Ning Co.

Now, a number of executives, whether willing or unwilling, have been leaving. CXO, such as CEO, COO, CMO, and other senior executives in the company, have all changed except Zhang Zhiyong.

This gave Zhang Zhiyong the opportunity to rearrange Lining's management structure.

Now, we see that Lu Ning, who once worked in Baosheng international, has become a new COO. According to the new functions, COO Lu Ning will "co-ordinate the three major business segments of Lining brand sales headquarters and sales areas, products and supply chain".

At the same time, the general manager of footwear products and general manager of clothing / accessories products also report to Chief Operations Officer to co-ordinate product planning, design development and production management, reduce costs and improve efficiency.

Once decentralization once again moved towards centralization, however, the reform plan of the BI Department of the brand strategy planning department still failed to come out.

This department will undoubtedly become a chronic disease in the internal framework of Li Ning Co.

From the former "five carriages" to the centralization of power, Zhang Zhiyong's carding of the overall framework of Li Ning Co is still continuing.

Regardless of decentralization or centralization, each has its own advantages and disadvantages.

The high level centralized management will obviously weaken the reaction speed and the market competition ability when participating in the market competition.

Decentralization is very easy to get out of control, and even there will be management problems such as organizational fragmentation and self governance.

Judging from Zhang Zhiyong's adjustment to the BI department, he is still not determined to let Lining go.

Such lingering and strategic vacillation will undoubtedly slow down the pace of Li Ning Co recovery. Whether Lining can carry the banner of Chinese national brands in the face of foreign troops is really worrying.