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Baoshan Steel: Not A Failure, But A Success
An American professor of international business said recently that he "made a mistake" in his analysis of Baoshan Iron and Steel Company (BISC), the Shanghai-based Chinese steel giant.
David Ricks, a Missouri University professor known for his case study on the failure of global enterprises, is here at the invitation of BISC's executives, who had read about his negative comments on the company.
In an analysis of BISC's operation, Ricks said BISC is "doomed to fail since the day it was founded." The steel company was forced to cancel 5 billion U.S. dollars-worth of orders it had placed with some western companies, due to a wrong estimate of the market demand and its production capacity, Ricks wrote in one of his books.
However, during his stay at BISC, Ricks realized he has made a mistake in his case study: it was true that the company experienced some twists and turns in the early days of its founding, but it had, during the past two decades or so, grown into a large-scale iron and steel enterprise that produces over 10 million tons of steel each year.
After a site survey at the workshops, Ricks told Xinhua he had never expected to see such a modernized enterprise in China, with first-class facilities, information management, high efficiency and a beautiful environment.
The U.S. professor saw that most of BISC's facilities were state-of-the-art products from world-famous manufacturers of Japan, Germany, the United States, France and Finland. "Business partners from the West have faith in the Chinese market," he said.
"I've made a mistake. I thought today's Baoshan Iron and Steel Company is still what it was in the early 1980s," the professor told BISC's employees.
The company's early setbacks showed that people had very high expectations of it at the time, said Ricks.
"The company has geared into the right track after some readjustments, and has become the world's most promising steel enterprise," he said.
At the end of Ricks' visit, the professor said BISC is a big success and will constitute a most convincing showcase in his next publication.
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