Xiaomi Organizational Structure and Culture

This article discusses the organizational structure and culture of Xiaomi Corporation. It explores their management process, leadership style, and organizational design. The article also touches upon the company's mission, vision, and values.

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XIAOMI ORGANIZATIONAL STRUCTURE AND CULTURE
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Introduction
The term management defined as the process of managing of people and things; it is
the process of reaching organizational goals. The process of management includes different
stages like planning, organizing, directing, staffing and controlling. These all process is very
much important for the success of an organization and for the effective growth. The stages
involved in the management process helps in organizing the work in a systematic manner
(Baker, 2016).
Xiaomi Corporation is an internet company that provides the hardware, software and
internet services in the Mainland China and internationally. The corporation operates through
smartphones, lifestyle products, internet services and other segments. The company was
founded in 2010 and by Lei Jun. The headquarters of Xiaomi is in Beijing, China and has
offices in Asia Pacific, Brazil and India. The segment of smartphones sells smartphones and
the and the lifestyle products segments offers smart TVs , laptops, speakers, smart routers and
the other hardware products. The advertising services and the internet value added the
internet services segment provides services. The other segment provides the hardware repair
for its products, the company also engages in wholesales and the retail of smartphones and
the ecosystem partners. The logo that is been used in the Xiaomi Corporation is the MI the
logo stands for the mobile internet. It has also the other meaning like the mission impossible
because the Xiaomi Corporation faced many challenges that has seemed impossible to defy in
the early stages (Liu, Xun. and Gao, 2015)
Xiaomi Corporation believed that the high quality products built with innovative
technology, which must be approachable to everyone. They incorporate their feedback into
their range of product, which includes the MI and Redmi smartphones. With its presence in
30 countries and regions, the Xiaomi is expanding its footprint across the world to become a
global brand. Xiaomi focused on being the most user centric mobile internet company and

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their aim is to cross the expectations of the people through its innovations. The team of
Xiaomi Corporation is not only passionate about the technology but also pursues perfection
to break tradition and the boundaries related to push. The main motto of this reason is to
ensure that their product remains unique and offer an unparalleled user experience. The
vision of Xiaomi Corporation to be the customers preferred partner in the global world. The
mission is to provide customer with superior services, to inspire and motivate the staffs
working at Xiaomi, and to be the most reliable partner.
Discussion
Some of the distinguishing characteristics of the managerial work is the pace and
quantity of work the main reason manager is following this because of the job of the manager
is open-minded. The manager is responsible for the success of an organization, the manager
is encouraged with the reality of the work for developing a particular personality, to overload
himself with the work and to do things in an abruptly manner. The organizational
management needs to able to make decisions and resolve issues in order to be both effective
and beneficial. There are three types of organization process work process, behavior process
and change process. The managers is able to make decisions related to the long-term
commitments, the mangers has the power to develop his own information. The role of manger
defined as an organized source of behavior, which is belonging to an identifiable offices or
position (H, 1973).
Xiaomi leadership considered to be as one of the main competitive advantages for the
business. Xiaomi leadership challenges at present include the cost leadership position, used
for intensifying position from the other budget technology such as the Oppo and Vivo. Along
with the Lei Jun, the seven cofounders of the organization have senior leadership roles with
the title of president and vice presidents. The importance of having co-founders in the senior

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management team is due to the increased sense of ownership that is having the positive
implications on the performance of the executives. The leadership style of Lei Jun is
fundamentally different from Steve Jobs , so specifically Steve jobs was known for its micro
managing leadership style whereas the Xiamoi Corporation CEO has a reputation for being a
good listener and takes into consideration the accounts views of other members of its senior
management group(Li and Chu, 2014).
The meaning of organizational design is that it is the step-to-step methodology used
for identifying the workflow procedures, structures and systems. It helps to fit according to
the current business realities and goals and through which the new plans formed for executing
the new changes. It is the process of adapting, designing and defining the organizational
structure. The theories of organizational behavior is useful when applied to organization as
theories of physics and chemistry for developing the new manufacturing technology and
consumer products. The theory is not helpful in understanding the practical facts of the
organization. In order to define the good and bad theory, first the theory must contribute to
the goals of the science, which includes understanding, predicting, permitting and facilitating
the influence. Secondly, there should be the clear delineation of the domain of theory. The
boundaries of application must be specified so that the theory utilized according to the
situations. The matrix structure aims at handling the more effectively situations where the
regular intermeshing occurs between two or more of accountability. Matrix structure used to
resolve the staff or the line tension and the functional marketing departmentalization (J.B.
Miner, 1982)
The Xiaomi Corporation organizational structure can be classified as a matrix, the
Xiaomi organizational structure is decentralized it means that where the various business
units are managed independently. Despite the Xiaomi is explored across 70 countries and
having more than 18000 employees, the organization is having the less layer of management

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in comparison with the other businesses which is having the same business size. The matrix
organizational structure helps in allowing the mobile internet company as for example the
Xiaomi Corporation helping to develop its new products and services within a short duration
of time. This is because of the absence o0f bureaucracy that is associated with the hierarchal
organizational structures. The disadvantages of the matrix organizational structure is that it
includes the lack of strict control by the top management which over separates the business
units and there is lack of integration between the operations of business units.
It is important for the Xiaomi Corporation to maintain the flat organizational structure
in order to remain flexible so that the mobile internet company can adapt and follow the
frequent changes that is taking place in the global market because the matrix organizational
structure increase the complexity that is not a good prospect. Increase in management
overhead costs that will lead to the fall in the growth of the organization. There is the
possibility for conflicting the management directives and there is the also the possibility of
structure collapsing which can lead to fall in the growth of the organization. (Yanzhuang, Lei
and Hongchun, 2015).
The type of the technology influences the organization structure, Xiaomi system is
unlikely to imitate by the most of the smartphones manufacturers because of its limiting
structure of the technology of traditional business to the consumer communication channels.
Xiaomi is investing in a various India that they can have a greater degree of impact over their
business. The Xiaomi Corporation possess the low discretionary income to spend ion
technology because they are eager to become the tech users. Xiaomi must build the new data
centers in India so that they can pack its privacy claims as well as create the infrastructure to
provide high quality and well performing MI services so that the business is more well
explored.

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Organizational culture is also known as the corporate culture which is defined as the
beliefs , assumptions, values and the different ways of interacting and contributing to the
unique social and psychological environment of an organization. It is the way the
organization conducts its business, treats its employees, customers and the wider community.
The culture effects the productivity and performance of an organization and provide ideas on
customer care and service, the product quality and safety. The culture of the organization is
an important aspect for its growth and for the employees. The culture of the organization is
different in various organizations it is not the same in every organization and it is very
difficult to change it as all the things in the organization is set according to that. (Daft, 2015).
According to the author, Andrew Brown, (1998) organization culture defined as the
set of understanding and meaning shared by the group of people. The meaning is largely
tactic among the members, which is clearly relevant to the particular group and distinctive
group. The culture of the organization also refers to the unique confirmation of norms, values
and beliefs so that it can characterize the manner in which the group and individuals combine
to get the things. The difference that makes the organization culture different from one other
is that it is bound up with the history, character building, effects of past decisions and the past
leaders.
The first dimension of organization culture relates whether the culture is understood
in terms of clarity, whether the things are and what they are appeared to be. The simplicity or
the complexity dimension relates to the cultural artefacts and the number of embedded
subcultures and their relationships to the dominant culture. The most commonly measure of
the organization culture is the strength and the weakness. It regards a strength as a production
of interaction of a widespread distribution of beliefs in an organization; these dimensions are
illustrated in the range from supermarkets to religious organization.

6XIAOMI ORGANIZATIONAL STRUCTURE AND CULTURE
Xiaomi Corporation organizational culture can be differentiated as a power culture. At
the internet technology company the power of decision are concentrated in the hands of
founder and CEO Lei Jun. The inspiration al and the effective leadership style of the Xiaomi
Company justifies the power culture. The organizational culture of Xiaomi integrates the
three elements they are as following:
Just for funs concept: This line placed at the core of the Xiaomi organizational culture it
explains that the culture is about becoming friends with the consumers.
Innovation and creativity: The Company’s website claims that they are open and innovative,
never meeting are ended and there is not the concept of providing the lengthy process. The
culture of the organization is friendly and collaborative where the concept of creativity is
appreciated. The purpose of the company is to promote the informal organization culture at
every levels with the positive implications.
Intense working culture: The organizational culture of Xiaomi is intense this is because of the
cost leadership business strategy being followed by the company in such a way that the
application of this strategy implies the more benefit from the resources, including the human
resources.
The Maslow motivational theory tells that the people are motivated by unsatisfied
needs, the person is never completely satisfied on any need level but a reasonable amount of
gratification with basic needs , must be felt before he or she meets the hierarchy needs. It
comprises of the higher level needs and the lower level needs the higher includes the self-
actualization, self-esteem needs and the social acceptance needs. The lower level needs
includes safety and security needs and the basic psychological needs. Maslow’s model argue
with the growing economic security affluence in the society and generally rising the
educational levels. The workforce motivated only by the higher order needs of self-esteem

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and self-actualization. The Maslow take the view that the people were self-actualizes or not
(Adapted from Maslow, 1943).
The McClelland motivation theory not only includes the personality factors but also
the social influences as well, it is to understand the motivational drivers of the people. This is
not the theory of job design it offers the valuable corrective on the hierarchy of needs
approach. McClelland identified the three basic needs of individual needs to achieve, needs
of power and needs of affiliation. The needs to achieve is related to the business success, the
person with a high need to achieve reacts well with the challenges. Whereas the person with
low achieve are less stimulating. He stated that the managers are having the high needs of
power, they enjoy the power more than they enjoyed of being liked by colleagues or
subordinates. The need for affiliation is similar to the social man theory of Mayo however, in
McClelland’s it is generally not associated of becoming a successful manager and or
achieving high performance in the workplace (McClelland and Richard, 1982)
Corporate environmentalism known as the company wide recognition of legitimacy
and the importance of the biophysical environment in the formulation of the organizational
strategy the execution of the environmental problems. It involves the recognition by firms
that the environmental issues arise from the development, manufacture, distribution and
consumption of disposal of their products or services. Integrating the environmental issues in
the strategic planning process is another theme of corporate environmentalism. The
importance placed in a environmental concerns and the extent of their integration into an
organizational strategy determines the companies approach to environment strategy (Wright,
2018)

8XIAOMI ORGANIZATIONAL STRUCTURE AND CULTURE
Xiaomi despite of having its branding effort they did not show the same commitment
in the environmental responsibility. The mobile internet company may start publishing the
corporate social responsibility report after the initial public offering. The official Xiaomi
website declares the company’s promise to reduce the use of hazardous substances in the
products. However, the Xiaomi does not disclose any data regarding emissions or any other
environmental impact of Xiaomi products and services. One of the corporate social
responsibility done by the Xiaomi Corporation is that the MI India maintains the product take
back and recycling program. Xiaomi authorized the e waste recycler which can collects the e
waste from the customer location or customers can also drop the e waste at any of the
company’s service centers. Xiaomi uses physical appearance metric when the hiring process
takes place, which is leading to employee recruitment and selection process (Li et al, 2017).
The Porter’s five forces model is a weapon for analyzing the competition of a
business moreover, for understanding the strategy potential profitability. This is the important
aspect because when we understand the forces in our environment or industry that can affect
the profitability, the five forces model are:
Supplier power: It is an assessment that tells in which way it is easy for the suppliers to drive
up the prices. This is driven by the number of suppliers in each of the essential input, the
uniqueness of their product or relative size and strength of the supplier and the cost of
moving from one supplier to another.
Buyer power: This assessment tells in which way it is easy for the buyers to drive the prices
in the market. This driven by the number of buyers in the market, the cost of moving from
one buyer to other and the importance of each individual buyer to the organization.
Competitive rivalry: It tells about the number of competitors in the market, that many
competitors offers undifferentiated products and services.

9XIAOMI ORGANIZATIONAL STRUCTURE AND CULTURE
Threat of substitution: Where the close substitute’s products exist in a market, it helps in
increasing the likelihood of the customers in response to price increases.
Threat of new entry: The markets, which are profitable, attracts the new entrants, which
erodes the profitability (Dälken, 2014).
The bargaining power of supplier in Xiaomi Corporation is medium they faced the
credibility gap among the possible consumers. Most of the big component suppliers were
tremendously trustworthy to the customers, which are present but also the perceptions that the
Chinese mobile organizations producing the cheap imitations. Xiaomi emphasizes on its
unconventional business structure was the important element to give the suppliers for the
further confidence in Xiaomi.
The bargaining power of buyer in Xiaomi Corporation is medium, it has its own target
customers the people who want to buy the smartphones but do not have much money to buy
the smartphones, which are of high price. Xiaomi provides customers with its best quality
smartphones at competitive prices, which is making a big advantage. Xiaomi to practice on
an open design so that the community of users would be constructed.
The rivalry is high, with its big brand competitors such as Apple, Samsung and Oppo
that are competing and dominating the industry. For the new entrants it is difficult to compete
and gain the economies of scale and the market share against the major brand players. The
industry of smartphones is very much competitive in the market.
The threat of substitution is low of Xiaomi Corporation, it is explained as low because
due to the addition of multi functionality, apps and services that the smartphones are having
over the single featured technology product. The difference that Xiaomi make from its
substitutes is that it has its own exclusive platforms.

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The threats of new entrants is low, the entry barriers for the smartphones are high this
is because any elements are required to be successful. They are having the saturated type of
market that is the amount of capital that is invested is big. For entering in the industry of
smartphones, one of the most element that needs to be considered is the operating system.
The BCG matrix is a framework crated by the Boston Consulting Group for
evaluating the strategic position of the business and the brand portfolio. It classifies the
business portfolio under four sections question mark, stars, dogs and cash cow (Mohajan,
2017)
Under the question mark section, Xiaomi Corporation is in its rapid growth with the
dedicated segments and the information services can improve its market share.
Wire line broadband unit is adhered at higher speed, better quality and orientation
considered star for the company due to its rapid growth in the growing market this is due to
the increase in number of smartphone users.
Services business unit categorized as a dog for the company, in spite of having huge
investment the unit has failed to generate the expected revenue. The company has minimal
chances to grow.
The wireless data services categorized as cash cow for the company because of its
high revenue over the years that accounts for the company’s total revenue. However given in
mature market the business unit does not need large capital investments to maintain its high
revenues because of its limited opportunities.

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References
Baker, M.J., 2016. What is marketing?. In The Marketing Book(pp. 25-42). Routledge.
Liu, D., Xun, K. and Gao, F., Beijing Xiaomi Technology Co Ltd, 2015. Mobile telephone.
U.S. Patent Application 29/460,170.
H. Mintzberg, The Nature of Managerial Work (New York: Harper & Row, 1973) P.93-94.
Copyright © 1973 by Henry Mintzberg. Reprinted by permission of Harper & Row,
Publishers, Inc.
Li, Y.F. and Chu, S.H., 2014. APSSC-2907 Electronic Commerce with Social Network-The
Disruptive Penetration Strategy by Xiaomi Technology. Kuala Lumpur, Malaysia, p.164.
Yanzhuang, B., Lei, G. and Hongchun, Y., 2015. Research on the growth mechanism of
proprietary intellectual property rights brand driven by entrepreneurship: the case of xiaomi
technology Co. Ltd. Science & Technology Progress and Policy, 12, p.015.
Daft, R.L., 2015. Organization theory and design. Cengage learning.

12XIAOMI ORGANIZATIONAL STRUCTURE AND CULTURE
Adapted from Maslow, A.H. (1943) ‘A theory of human motivation’, Psychological Review
50(4): 370-96
J.B. Miner (1982) - Theories of Organizational Structure and Process, New York: Dryden
Press, P.423
Harold Hayward (1992) - ‘Organising and organisation’, in Fulop et al. (1992), P.169
Andrew Brown (1998) - Organization Culture, London: Financial Times/Prentice Hall, P.42,
Adapted from Maslow, A.H. (1943) ‘A theory of human motivation’, Psychological Review
50(4): 370-96
McClelland and Richard Boyatzis (1982, cited in Fincham and Rhodes 1992: 83)
Mohajan, H., 2017. An Analysis on BCG Growth Sharing Matrix.
Wright, C.H., 2018. Corporate environmental responsibility. In Companion to Environmental
Studies (Vol. 163, No. 168, pp. 163-168). ROUTLEDGE in association with GSE Research.
Li, D., Xin, L., Chen, X. and Ren, S., 2017. Corporate social responsibility, media attention
and firm value: empirical research on Chinese manufacturing firms. Quality &
Quantity, 51(4), pp.1563-1577.
Dälken, F., 2014. Are Porter’s five competitive forces still applicable? A critical examination
concerning the relevance for today’s business (Bachelor's thesis, University of Twente).

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Appendices
Strength
 Highest selling smartphone
 Huge China and Asia market
available
 Discriminative pricing
 Good quality
 Advantage of manufacturing
Weakness
 Advertising and marketing spend is
low.
 Low skimming price.
 Brand image and equity is low
because of the low advertising.
Opportunities
 Brand building
 Expansion
 Distribution
 Portfolio of the product
Opportunities
 Competition
 Brand differentiation is absent
 Service

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BCG Matrix of Xiaomi
Question mark
High growth market
Stars
High market share and high rapid growth
Dogs
Minimal chances to grow and improve
market share
Cash cows
High market share and low growth market.
Five question to be asked to 30 employees of Xiaomi Corporation:
1. Do they have good leadership?
1 2 3 4 5 6 7 8 9
1. Do they are following the strategy?
1 2 3 4 5 6 7 8 9
2. Is the structure of the organization organized?
1 2 3 4 5 6 7 8 9

15XIAOMI ORGANIZATIONAL STRUCTURE AND CULTURE
3. Is the motivation practices good in an organization?
1 2 3 4 5 6 7 8 9
4. How the culture of an organization is good or bad?
1 2 3 4 5 6 7 8 9

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