Huawei: Employee Stock Ownership, A Double-edged Sword
Supervising Professor: Xiang Bing; Case Researchers: Yang Yan, Zhou Yi [ Language available : Chinese / English ]

Huawei's employee stock ownership scheme has clearly had a very positive impact on the company, a fact supported countless times over the years. The interests of employees were tied to the development of the company, maximizing the value of human capital, and giving strength to company growth and performance. However, as the scale of employees’ shareholdings expands, the impact of the scheme loses its power, while the market environment has also changed. The scheme’s design drawbacks and risks are slowly being exposed. How are these manifested? Founder Ren Zhengfei could not have known that something with such a positive impact would eventually tie him down. What’s next for Huawei? An IPO? This case will hopefully bring some clarity to these issues.

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