SAP China: “You’re Out!”

In July 2008, SAP China fired three vice presidents who had openly questioned proposed personnel appointments in their sales meeting, where the new general manager from IBM, Zhang Liesheng, announced a plan to reengineer the organizational structure and processes at SAP China. This reorganization involved appointing four new vice presidents and redefining the positions of two current vice presidents. Two of the positions of the three fired vice presidents were redefined; the third one who was fired was the first person who challenged the personnel changes. There were two different cultures at SAP: a product-oriented German culture and a market-oriented U.S. culture. Although SAP China had adhered to the German style for a long time, the German general manager left and the successor advocated the U.S. style. Consequently, SAP China proposed aggressive growth target, which was opposed by the German-style veterans including the three fired vice presidents. Trouble ensued. This case addresses organizational and cultural management, personnel management, and other issues.