As a successful company, Weichai Power [68.04 0.06%] Co., Ltd. ("Weichai Power") entered the Harvard MBA case. However, Zhang Fusheng, Weichai Power's director, said in an interview with China Accounting News, “The system construction of Weichai Power has not fully kept pace with the requirements of internal control construction. However, the internal system and the internal control guidelines of Weichai Power seem to have the same purpose. Zhang Fusheng said that the construction of Weichai Power's internal control has entered a state of ready to go.
Weichai Power (SZ:000338) Latest Price: 68.04 0.04 0.06% Market Trends Company News Latest Announcement Large Tracking of Money Flow Positioning Costs Stock Alerts Premium Warrants Forecast Long Hubang Weichai Power (HK:02338) Latest: 59.90 2.65 4.63 The trend of the company's stock market trend of the development of internal control
Zhang Fusheng stated that “the focus of Weichai Power's internal control construction is to continue its development and form a virtuous circle for the internal operation of Weichai Power.†In fact, Weichai Power has made detailed plans for its future internal control construction. The most suitable one of more than 20 subsidiaries was used as a pilot for internal control construction. From the point of view, face to face, and ultimately to the goal of making Weichai Power fully implement internal control construction. Second, Weichai Power plans to quickly establish a leadership team and actively carry out more stringent internal control construction work.
For internal control construction, Weichai Power has accumulated a lot of human, material, and financial resources. Prior to the introduction of the "Guidelines for Internal Control of Corporate Internal Control", Weichai Power has made active efforts in the construction of internal control, but there are also confusions.
After this year's "Guidelines for Internal Control of Corporate Internal Control" was issued, Weichai Power could finally change its status ready to go and "have its own hands". Zhang Fusheng stated that adhering to the superior spirit and its own corporate culture, Weichai Power still needs to be “pragmatic†and “steady†for this internal control construction.
Weichai Power will conduct two external audits each year. In addition to requiring the auditor to issue an audit opinion report, it will also rigorously require the issuance of a management proposal to formulate and improve the work plan based on the issues raised in the management proposal. In this way, the company The management level has been continuously improved and improved. Compared with companies that simply pursued the "unqualified opinion audit report," the practicality of Weichai Power is "very visible."
In addition to external review, Weichai Power will actively conduct internal review. The assessment agency within Weichai Power will review the internal control construction of more than 20 subsidiary companies and issue assessment opinions. During the review process, strict requirements are made and the review opinions are filed. Weichai Power will be able to improve the deficiencies of the previous year in the implementation of internal control in the next year.
Corporate culture soaked in execution
During the 12 years from 1998 to 2010, Weichai Power has grown from a state-owned enterprise on the brink of bankruptcies to the largest and most well-known professional engine manufacturing company in the country. Behind the success, Weichai Power has a unique corporate culture: a down-to-earth and pragmatic spirit, and a banned execution force. This corporate culture fully meets the requirements of the implementation environment of internal control guidelines.
The smooth implementation of the internal control of enterprises requires the execution force that is prohibited by the order. Without enforcement power, internal control guidelines are nothing but a piece of paper.
One such incident occurred at Weichai Power: The equipment factory received a mission in an emergency: a batch of cylinder heads were produced. At that time, Weichai had no special equipment, only a few processing machines and more than a dozen old drilling machines. Several foreign equipment experts working at Weichai unanimously considered this to be a “completely impossible taskâ€. After the equipment factory accepted the mission, it designed its own special tooling, borrowed a milling machine, and tried every means. After a short time of seven days, it completed the temporary production line and produced a qualified cylinder head. At the same time it reached 60 units. The daily output has turned "the impossible mission" into reality. This move made foreign experts stunned. This is the execution power of Weichai Power.
At the same time, Weichai Power has an international perspective that advances with the times, and its development path is synchronized with the growth of the world's industries. Its international competition has already demonstrated the dignity, status and value of Chinese companies.
Weichai System and Internal Control Guidelines "Different"
Weichai Power also has an efficient leadership team. They have the ability to alert and control risk at key moments. This once helped Weichai Power to make a leap into a butterfly. The international financial crisis in 2008 once caused a large number of world-class enterprises to close down. Weichai Power, however, achieved a contrarian increase during the financial crisis. At this time, Weichai Power fully demonstrated its ability to control risks. As early as December 4, 2007, Weichai Power held a meeting of all leading cadres. CEO Tan Xuguang [2.12 -0.47%] issued a warning to Weichai Power regarding the imminent arrival of the global economic recession and its strategies for its subsidiaries. Trends, cost management, cash flow management, logistics management, etc., conducted a comprehensive "physical examination," and temporarily formulated risk control strategies. In the first half of 2008, Weichai Power's companies simultaneously reduced costs, controlled inventory, strengthened accounts receivable management, and accumulated large amounts of cash reserves. This financial crisis not only did not “wound†Weichai Power. It also made it more "mature" after undergoing a "disaster" baptism.
A good system is the basis for good internal control.
In the past 12 years, Weichai Power's institutional system has been continuously improved. Zhang Fusheng said that the reason why Weichai Power has achieved greater development is because after accumulated experience, it finally concluded a mature system that suits itself.
“The system construction of Weichai Power has not yet fully kept pace with the requirements of internal control construction. In fact, the internal system and the internal control guidelines of Weichai Power seem to have the same purpose, and both are looking for the most suitable for enterprise development. Reduce the balance of corporate management risk.†Zhang Fusheng said modestly.
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