The document discusses Shenglong Electric, a Chinese electrical manufacturing company known for its unique "group boss system" model. Key points: - Shenglong was founded in 1979 and has grown to include 35 subsidiaries and factories through persistence in manufacturing and innovation. - Their "group boss system" gives sales employees ownership stakes for meeting targets, incentivizing hard work and cultivating new entrepreneurs. Over 400 "bosses" now help drive the company's growth. - While successful, some critiques note the model's reliance on monetary incentives could undermine cohesion in hard times. Younger employees may also lack room for growth.

1. Defining and Classifying Groups
 Group:
– Two or more individuals interacting and interdependent,
who have come together to achieve particular objectives
 Formal Group:
– Defined by the organization’s structure with designated
work assignments establishing tasks
 Informal Group:
– Alliances that are neither formally structured nor
organizationally determined
– Appear naturally in response to the need for social contact
– Deeply affect behavior and performance
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2. Subclassifications of Groups
Formal Groups
 Command Group
– A group composed of the
individuals who report
directly to a given manager
 Task Group
– Those working together to
complete a job or task in an
organization but not limited
by hierarchical boundaries
Informal Groups
 Interest Group
– Members work together to
attain a specific objective with
which each is concerned
 Friendship Group
– Those brought together
because they share one or
more common characteristics
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3. Example of case
– Shenglong Electric The " " not only
enhances the cohesion of Shenglong employees, promotes
the rapid growth of the enterprise, but also produces a huge
magnet effect.
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4.  From the perspective of time depth and space extension, Shenglong
electric group is a unique existence that best fits the development context
of China's reform and opening up in the past 40 years.
 On May 13, 1979, Xie Yuande, 29, together with six other young people,
put up the sign of Hubei's first rural joint venture in a simple hut in
Wangcheng Town, Zaoyang County, Hubei Province. At this time,
Xiaogang Village in Fengyang, Anhui Province has not been officially
recognized as a "household production quota" and Shenzhen has been
identified as a "special economic zone" half a year later. Without
exception, individual enterprises that are still going against the trend have
been excluded and suppressed. When the local bureau of industry and
Commerce hurried to close the door, it was discovered that this was an
enterprise without even a door.
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5.  Perhaps no one thought that this tenacious enterprise would become a
unique sample of China's private economy in the future and open a
wonderful door for the development of Chinese enterprises.
 Now, taking stock of the star enterprises that emerged at the beginning of
reform and opening up, we will find with regret that few of them are still
developing healthily and continuously. This also makes the significance of
Shenglong's sample more precious.
 As a rising star in China's electrical manufacturing industry, Shenglong
Electric Group has achieved remarkable development momentum in
recent years. In the general environment of increasing downward
pressure on the economy and slowing down the growth rate, Shenglong
still maintained a strong development momentum, and the response of
domestic and foreign markets was very optimistic. In 2017 alone,
Shenglong won orders of up to 75.6 billion yuan at an electric smart
power Expo held in Wuhan.
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6.  Break through and develop simultaneously, and grow tenaciously in
sticking to industry
 "Shenglong model itself is very simple, but its connotation is rich, and it is
easy to learn and difficult to do. The so-called" easy to learn "means that
you can understand it at a glance; the so-called" difficult to do "means
that few entrepreneurs have the mind, passion, dream and life realm of
Xie Yuande. To play a role in this model, we need to gradually cultivate a
group culture, that is, the essence of Confucian culture - 'we want to stand
up and stand up, and we want to reach and reach people.' this culture and
the market economy's impact on people The basic assumptions are
contrary. " It is a miracle that Shenglong can cultivate such a culture,
implement it and link it with its own business model.
 "The reason why we can continue to develop is that we have always
adhered to the real economy and firmly adhered to the green mountains;
we have always adhered to the high-quality development path, taken
innovation as the first driving force, and regarded quality as life; we have
always adhered to the common growth of employees and enterprises, and
established and successfully practiced a group entrepreneur system called
'group boss system'." 9-5

7.  Every step of Shenglong is precisely in line with the pace of reform and
opening up.
 In 1984, the excluded company moved from a small town to a county town.
Its business scope expanded from building materials to electrical switches
and took the lead in letting employees wear suits. Under the change in
clothing, there is a change in the system. Since then, Shenglong began to
abandon the big pot, establish the manager responsibility system, start
performance evaluation, and explore the group boss mode of "co
construction and sharing"
 It is reported that when the external environment for the development of
the real economy was not good in the past few years, many enterprises
chose to turn from reality to reality and switch to real estate, stocks and
futures, Shenglong electric was also faced with great temptation. Do you
want to change course to make fast money, or do you want to continue to
work hard in industry?
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8.  "Running an enterprise is like planting crops. We must be down-to-earth.
We cannot play tricks or speculate. The real economy is the foundation of
a country's economy and the foundation of Shenglong electric. We must
stick to it and never waver." In order to put an end to the idea of taking
shortcuts, Xie Yuande publicly announced that Shenglong electric would
not circle the country's land and the people's money at any time, "no one
is allowed to step on these two red lines".
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9.  Not only that, in order to focus on the main business, Shenglong also took
the initiative to peel off the hardware processing, construction,
transportation and other industries, focusing on the electrical
manufacturing industry, especially the internet intelligent electrical
manufacturing industry that the country urgently needs to develop.
Persistence and deep cultivation will pay off. Shenglong Electric has
become a leading full chain supplier in China's intelligent power industry
and a giant ship in the internet intelligent power supply equipment
manufacturing industry. At present, Shenglong has 35 subsidiaries,
factories and 2 research institutes. Its business covers all provinces and
cities in China and more than 50 countries and regions overseas. It has
not only successfully participated in many national major projects such as
the Beijing Shanghai high-speed railway, the south to North Water
Transfer Project, the capital airport, but also become an equipment
supplier for overseas major projects such as the State Grid of Vietnam,
the new port of Sudan, and the Hambantota airport of Sri Lanka.
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10.  In the view of peers, the key to Shenglong's success is that it can make
more accurate pre change and response under the uncertain market
environment. This seems to be closely related to its unique enterprise
definition.
 Shenglong defines itself as an enterprise that manufactures high-quality
products, a platform for cultivating entrepreneurs, and an ecosystem that
supports mass entrepreneurship. Strictly speaking, the latter two seem to
go beyond the connotation of enterprises, and more reflect the social
responsibility and public welfare. In this regard, Xu Honglan, vice mayor
of Wuhan, once commented, "Shenglong is an incubator and not just an
incubator, a platform but not just a platform, a factory but not just a
factory, a school but not just a school."
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11.  In the view of peers, the key to Shenglong's success is that it can make
more accurate pre change and response under the uncertain market
environment. This seems to be closely related to its unique enterprise
definition.
 Shenglong defines itself as an enterprise that manufactures high-quality
products, a platform for cultivating entrepreneurs, and an ecosystem that
supports mass entrepreneurship. Strictly speaking, the latter two seem to
go beyond the connotation of enterprises, and more reflect the social
responsibility and public welfare. In this regard, Xu Honglan, vice mayor
of Wuhan, once commented, "Shenglong is an incubator and not just an
incubator, a platform but not just a platform, a factory but not just a
factory, a school but not just a school."
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12.  In order to achieve the dream of the first workshop, Shenglong has
embarked on a unique road. According to Gong Shengde, general
manager of intelligent power distribution division of Shenglong Electric
Group Co., Ltd., Shenglong was initially engaged in power distribution
equipment related business. Before the reform and opening up, China's
power distribution business followed the Soviet Union standard. After the
reform and opening up, abb, Schneider, Siemens and other international
giants quickly occupied the Chinese market. Compared with domestic
distribution equipment, the products of foreign brands are lighter,
thinner and lower in energy consumption, with obvious advantages. But
at the same time, these brands are too large, and they are not grounded
when they first enter China, and there are certain limitations in service.
Judging the situation, Shenglong adopted the strategy of learning from
international giants and gradually became the authorized manufacturer
of these big brands. More importantly, aware of the weakness of foreign
brands, Shenglong has made great efforts to meet the different needs of
customers and made differentiated designs in the number of switches,
circuits, centralized control and management of products.
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13.  In this process, Shenglong always adheres to the road of high-quality
development, takes innovation as the first driving force, and devotes great
efforts to build a market-oriented, enterprise oriented, and industry
university research deep integration technology innovation system. It has
carried out industry university research cooperation with Tsinghua
University, the Institute of electrical engineering of the Chinese Academy
of Sciences, and established an intelligent power distribution research
institute led by Gu Guobiao, a famous electrical expert in China and
academician of the Chinese Academy of Engineering in Beijing, And it
does not stick to one pattern to attract high-end talents at home and
abroad.
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14. The mode is original, and
the group boss system is a
powerful driving force.
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15.  "One of the core of Shenglong's model is the 'group boss system', that is,
the sales function of the enterprise is fully contracted to the employees of
the enterprise. However, this kind of contracting is not simply to be the
shopkeeper, but to provide all-round services for the sales personnel to
ensure the product quality, cost advantage and design scheme
optimization. The sales personnel are not only the soldiers in charge, but
also the commanders of the enterprise's product decisions. This model has
greatly stimulated sales The initiative of the staff has improved the speed,
efficiency and pertinence of sales decisions, which I call the best sales
model. " Song Xuebao analyzed that this actually makes every salesperson
become a real entrepreneur and the first person responsible for serving
customers, makes sales really the leader of the enterprise, and makes the
enterprise truly market-oriented.
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16.  Specifically, the main approach of the "group boss system" is to create an
environment and build a platform for employees who are capable and
want to do things to help them grow into leading talents; Support
employees to become entrepreneurs through their own efforts, participate
in corporate governance and share development achievements. In order to
cultivate "bosses", Shenglong Electric has established a three-level
entrepreneurial company structure. When entrepreneurs have their first
bucket of gold and have their own 1 million yuan in the company account,
they can apply for registration as a manager of a three-level startup
company. After the manager's personal account reaches 3 million yuan,
he can apply for the establishment of a second level venture company and
serve as the general manager. After the personal account of the general
manager reaches 10 million yuan, he can apply for the establishment of a
first-class startup company and serve as the president.
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17.  In short, today's soldiers, tomorrow's generals and the day after
tomorrow's leading the three armed forces to fight a big battle are the
trilogy of the "group boss system". "Group boss system" not only
enhances the cohesion of employees, promotes the rapid growth of
enterprises, but also produces a huge magnet effect.
 Now, the "group boss system" has produced a "fission effect" in
Shenglong electric. After relay after relay, Shenglong Electric's "boss"
team is rolling like a snowball, getting bigger and bigger. These more than
400 "bosses" and their teams, like more than 400 large and small engines,
have provided strong and lasting impetus for the development of
Shenglong electric.
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18. Pros
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19. Cons
 1. First and foremost, it seems that the internal relations of this enterprise are all
maintained by money. We are in a head office (an entrepreneurial platform)
because it is profitable. But if one day, the company is in crisis and faces extinction,
at this time, small start-ups can not make profits from the head office. Can this
relationship maintained by money still exist? Only when the trees fall, the monkeys
scatter. When enough money is made, this incentive will no longer matter. There is
also a habit within Shenglong that the first generation boss supports the second
generation. When there is competition between the two, it may suppress the new
generation. This is still the reason why it depends on money. Only the strength of
the team is considered, and the cohesion of the group is ignored. If every boss is
short-sighted and only wants to make money, they will try their best to squeeze
costs, buy inferior raw materials, and the quality of products will become worse.
(forming a vicious circle) the company's purpose and values are very short-sighted,
which are abnormal and utilitarian values. So, what should be really used to
maintain the internal relations of the enterprise? I think it should be a kind of
vision, a kind of value and something similar to faith. This is also a very important
content in today's enterprise management. This is a kind of cohesion from the
heart. It is a kind of cohesion that can not be blown away.
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20. Cons
 2. There are also some small problems: there is no room for young people
to develop. There is a certain period for the development of an enterprise.
When the enterprise is saturated in the market and its market share has
reached the extreme, the enterprise is still continuously accepting new
young people. The enterprise is becoming more and more bloated and
difficult to manage. The young people have no room for development and
can only expand diversified businesses and markets. Then it comes to the
next technical issue.
 3. Technology research and development: technology has become more
and more important. The development of enterprises can not rely solely
on the expansion of scale. Competition is mainly driven by technology.
Enterprises should concentrate resources to do some technological
breakthroughs, overcome technological bottlenecks, and carry out
technological innovation, instead of focusing on sales.
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21. Cons
 4. Filing system: vicious competition, the first to arrive does not necessarily mean
strong competitiveness and good technology, and the reaction time to the market is
later than that of other companies. At this time, the highly competitive team may
choose to work alone or wait for the next assessment. However, it is also possible
that the payback period of the investment is often long, and some projects that
have no income at present but have strong income development in the future may
be shot during the assessment.
 5. Employees have no basic salary and no sense of security. They have a sense of
crisis in the environment of this wolf heart culture. When employees reach a
certain age, they may be under great pressure in life and have no strong
enthusiasm. If the enterprise can not provide them with a series of guarantees at
this time, employees may not have a strong sense of collective belonging, which will
also affect their work efficiency.
 6. The incentive level of technical personnel is not enough, only for the sales
department, and all of them are developed to the sales department, resulting in the
loss of technical personnel. The recruitment of new technical personnel will lead to
a series of consequences such as increased training costs.
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