From Compound Culture to Benchmark Culture: The Transformation and Development of BNBM

Abstract

BNBM is a state owned Chinese enterprise that manufactures gypsum boards for the construction industry. The case examines the creation of ‘home culture’ where BNBM cultivated a culture where the employees viewed the organization as their home.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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Resources

Appendix 1: Deng Xiaoping Inspecting BNBM’s Experimental Site for New Building Materials

A photo of Deng Xiaoping and Gu Mu inspecting BNBM’s experimental site for new building materials. In the photo there are also other people who were working at the construction site.

In 1979, late Chinese leader Deng Xiaoping, accompanied by Vice Premier Gu Mu, inspected the site of an experimental building of new building materials in Beijing.

Source: Internal information of BNBM

Appendix 2: The BNBM Monthly and Published Books on Corporate Culture

An image shows a few editions of the newspaper, The BNBM monthly, on the left and two of the published books related to corporate culture on the right.

The BNBM Monthly is still published monthly, with enthusiastic staff contributing their articles.

Source: Internal materials of BNBM

Appendix 3: Changes in the Organization Chart During the Reform

An organizational chart shows changes in BNBM’s structure during the reform in the year 2007.

An organizational chart shows changes in BNBM’s structure during the reform in the year 2016.

Source: Internal materials of BNBM

Three large-scale organizational adjustments and management innovations

2005

Organizational adjustment characterized by “specialization + synergy”

2012

The “focus + young” organizational adjustment for the gypsum board business with emphasis on regional and frontline companies

2014

Full implementation of in-depth management integration and transformation into a “customer-oriented” organization, full integration of marketing team and full coordination of production resources

An image shows three differently colored circles, stacked one beside the other, providing information about organizational adjustments and management innovations in years 2005, 2012, and 2014.

Source: Internal materials of BNBM

Appendix 4: Values and Cultural Concepts of BNBM

An image shows a garden-like plant and staff apartment of BNBM on the top left and bottom left, respectively, and the stone of Human Harmony on the top right.

Top-left: A Garden-like Plant; Top-right: The Stone of “Human Harmony”; Bottom-left: Staff Apartment

BNBM practices its corporate culture, promotes the core values of “innovation, performance, harmony, and responsibility” and the behavior code of “respect, gratefulness, humility, and decency.” The company carries on and develops the cultural idea of “dedication to the plant, honor in performance, innovative growth, and humanistic care”.

Source: Internal materials of BNBM

Appendix 5: “Six-Star Benchmark Company”

An image shows a star surrounded by the names of 11 regional companies that were named Six-Star Benchmark Companies.

In 2016, 11 regional companies were entitled “Six-star Benchmark Companies”, an 83% increase over 2015.

Source: Internal materials of BNBM

Appendix 6: BNBM Innovation Conference 2011

An image shows BNBM employees standing with their respective awards at the 2011 BNBM Innovation Conference.

Source: BNBM website

Appendix 7: Business Indicators Displayed at the BNBM Exhibition Hall (1997–2016)

Scale of Gypsum Board Business: From 40 Million m2 in 1997 to 2.13 Billion m2 in 2016

In the graph, the x axis is scaled from 1997 to 2016. After 1997 the next year is 2001 but the remaining years are at a gap of 3 years. The y axis is scaled from 0.00 units to 25.00 units with a gap of 5 units. A legend shows that 1 unit = 100 mm square. The data represented by the graph, with approximate values, are tabulated as follows:

Years

Units

1997

0.40

2001

0.40

2004

0.50

2007

4.80

2010

10.00

2013

17.00

2016

21.30

A line graph shows Gypsum board business size from the year 1997 to 2016.
Total Assets: From RMB 700 Million in 1997 to RMB 14.3 Billion in 2016

In the graph, the x axis is scaled from 1997 to 2016. After 1997 the next year is 2001 but the years following 2001 are at a gap of 3 years. The y axis is scaled from 0.00 units to 200.00 units with a gap of 50.00 units. A legend shows that 1 unit = RMB 100 m. The data represented by the graph, with approximate values, are tabulated as follows:

Years

Units

1997

5.00

2001

25.00

2004

40.00

2007

60.00

2010

75.00

2013

110.00

2016

150.30

A line graph shows total assets from the year 1997 to 2016.
Asset-Liability Ratio: From 34% in 1997 to 27% in 2016

In the graph, the x axis is scaled from 1997 to 2016. After 1997 the next year is 2001 but the years following 2001 are at a gap of 3 years. The y axis is scaled from 15.00% to 65.00% with a gap of 10.00%. The data represented by the graph, with approximate values, are tabulated as follows:

Years

Percentages

1997

34.00

2001

33.00

2004

47.00

2007

63.00

2010

55.00

2013

47.50

2016

27.00

A line graph shows asset-liability ratio from the year 1997 to 2016.
Total Profit: From RMB 100 Million in 1997 to RMB 1.7 Billion in 2016

In the graph, the x axis is scaled from 1997 to 2016. After 1997 the next year is 2001 but the years following 2001 are at a gap of 3 years. The y axis is scaled from 0.00 units to 20.00 units with a gap of 5 units. A legend shows that 1 unit = RMB 100 m. The data represented by the graph, with approximate values, are tabulated as follows:

Year

Units

1997

1.00

2001

0.80

2004

0.50

2007

2.50

2010

6.00

2013

14.00

2016

17.00

A line graph shows total profit from the year 1997 to 2016.
Net Profit: From RMB 93 Million in 1997 to RMB 1.5 Billion in 2016

In the graph, the x axis is scaled from 1997 to 2016. After 1997 the next year is 2001 but the years following 2001 are at a gap of 3 years. The y axis is scaled from 0.00 units to 15.00 units with a gap of 5 units. A legend shows 1 unit = RMB 100 m. The data represented by the graph, with approximate values, are tabulated as follows:

Years

Units

1997

0.93

2001

0.80

2004

0.50

2007

2.50

2010

6.00

2013

14.00

2016

15.00

A line graph shows net profit from the year 1997 to 2016.
Net Profit Attributable to the Owners of BNBM: From RMB 93 Million in 1997 to RMB 1.17 Billion in 2016

In the graph, the x axis is scaled from 1997 to 2016. After 1997 the next year is 2001 but the years following 2001 are at a gap of 3 years. The y axis is scaled from 0.00 units to 15.00 units with a gap of 5 units. A legend shows 1 unit = RMB 100 m. The data represented by the graph, with approximate values, are tabulated as follows:

Years

Units

1997

0.9

2001

0.8

2004

0.8

2007

2.00

2010

4.00

2013

9.00

2016

11.70

A line graph showing net profit attributable to the owners of the parent company from the year 1997 to 2016.
Net Cash Flow From Operating Activities: From RMB 63 Million in 1998 to RMB 1.7 Billion in 2016

In the graph, the x axis is scaled from 1998 to 2016. After 1998 the next year is 2001 but the years following 2001 are at a gap of 3 years. The y axis is scaled from 0.00 units to 20.00 units with a gap of 5 units. A legend shows 1 unit = 100 m yuan. The data represented by the graph, with approximate values, are tabulated as follows:

Years

Units

1998

0.63

2001

0.63

2004

2.50

2007

1.00

2010

9.00

2013

15.50

2016

17.00

A line graph showing net cash flow generated by the operating activities from the year 1998 to 2016.
Accounts Receivable Turnover (Times): From 4.8 in 1997 to 42 in 2016

In the graph, the x axis is scaled from 1997 to 2016. After 1997 the next year is 2001 but the years following 2001 are at a gap of 3 years. The y axis is scaled from 0.00 units to 50.00 units with a gap of 10 units. A legend shows 1 unit = times. The data represented by the graph, with approximate values, are tabulated as follows:

Years

Units

1997

4.8

2001

5.0

2004

4.6

2007

18.0

2010

9.00

2013

24.00

2016

42.0

A line graph showing accounts receivable turnover rate (times) from the year 1997 to 2016.
Percentage of the Balance of Accounts Receivable in the Year’s Operating Income: From 22.6% in 1997 to 2.3% in 2016

In the graph, the x axis is scaled from 1997 to 2016. After 1997 the next year is 2001 but the years following 2001 are at a gap of 3 years. The y axis is scaled from 0.00% to 25.00% with a gap of 5 units. The data represented by the graph, with approximate values, are tabulated as follows:

Years

Percentages

1997

22.60

2001

21.50

2004

16.00

2007

12.50

2010

4.00

2013

3.00

2016

2.30

A line graph showing proportion of balance of accounts receivable in operating income from the year 1997 to 2016.
Earnings Before Interest and Tax (EBIT): From RMB 97 Million in 1997 to RMB 1.75 Billion in 2016

In the graph, the x axis is scaled from 1997 to 2016. After 1997 the next year is 2001 but the years following 2001 are at a gap of 3 years. The y axis is scaled from 0.00 units to 20.00 units with a gap of 5 units. A legend shows that 1 unit = RMB 100 m. The data represented by the graph, with approximate values, are tabulated as follows:

Years

Units

1997

0.97

2001

1.00

2004

0.98

2007

4.00

2010

7.00

2013

16.00

2016

17.5

A line graph showing Earnings Before Interest and Tax (EBIT) from the year 1997 to 2016.
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA): From RMB 110 Million in 1997 to RMB 2.15 Billion in 2016

In the graph, the x axis is scaled from 1997 to 2016. After 1997 the next year is 2001 but the years following 2001 are at a gap of 3 years. The y axis is scaled from 0.00 units to 25.00 units with a gap of 5 units. A legend shows that 1 unit = RMB 100 m. The data represented by the graph, with approximate values, are tabulated as follows:

Years

Units

1997

1.10

2001

2.00

2004

2.25

2007

5.00

2010

8.00

2013

18.00

2016

21.50

A line graph showing Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) from the year 1997 to 2016.
Economic Value Added (EVA): From RMB 72 Million in 1997 to RMB 1 Billion in 2016

In the graph, the x axis is scaled from 1997 to 2016. After 1997 the next year is 2001 but the years following 2001 are at a gap of 3 years. The y axis is scaled from 0.00 units to 15.00 units with a gap of 5 units. A legend shows that 1 unit = RMB 100 m. The data represented by the graph, with approximate values, are tabulated as follows:

Years

Units

1997

0.72

2001

0.62

2004

−0.80

2007

0.72

2010

4.00

2013

9.00

2016

10.00

A line graph showing economic value added (EVA) from the year 1997 to 2016.

Source: Internal materials of BNBM

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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