Lenovo 2009 (A): The Role of Board Chairman in a Turnaround

The case brings readers to February 6, 2009 just after Lenovo, China’s largest PC maker, had replaced its American CEO — the third time in the five years since Lenovo’s acquisition of IBM’s PC business. The leadership shakeup was seemingly caused by the worsening condition in Lenovo’s key target market and the disastrous financial loss that followed, but the deeper causes actually lay within Lenovo. Lenovo had undergone the trickiest internal challenges that a globalizing Chinese company could experience: retaining international executives during a time of severe financial distress, integrating two companies with different cultural roots, changed power relations on the Board, the awkward relationship between a Chinese executive Chairman and a foreign CEO. The case includes four video clips of case author’s interview with Liu Chuanzhi, non-executive Chairman of Lenovo’s Board of Directors, the protagonist of the case. The first two clips contain Liu’s answers to the first two assigned case questions (see Section 2: Suggested Assignment Questions). The third and fourth video clips can be used for the discussion of question 3 and show Liu discussing his view of the Board’s role, and his thoughts on making Lenovo “a family business without family ties” from a governance perspective.