Teco Taiwan Case

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EXAM CASE TECO ELECTRIC AND MACHINERY CO. Executive Summary TECO unique story of industrial innovation for over fifty years witnesses how a corporation from an emerging economy can progress and be part of the economic significant performance. That is Taiwan which has been both strong and stable for over the past decades. TECO had a very successful system for several years, and their mission was to generate customer satisfaction, create profit, and promote social prosperity. TECO was always dedicated to long-term development, creating new competitive advantages, enhancing service quality, and creating outstanding products. The case is describing TECO Electric & Machinery Co., and assessing the management control system with its cultural dimension. The company use of value-added as its primary key success indicator is an important subject in the case. This has its societal impact from TECO’s incentive and compensation to its work force. The accounting profit is addressed to show case the comparability with the value-added measure. To conclude, we question TECO’s new system design in the environment of Taiwanese culture and its compatibility. We also question whether this could be applied in other countries. TECO Electric & Machinery Co. Ltd., was established on June 12, 1956, starting out as an industrial motor manufacturer with an initial capitalization of NT$ 3 million (US$ 200,000). Over the years, TECO formed alliances with leading international companies to enhance its strategic position, it had successfully diversified into a conglomerate with worldwide business operations. The number of shareholders jumped from 437 in 1973 to more than 50,000 in 1995. The management implemented a form of divisionalization in 1985, by splitting the company into three divisions – home automation, factory automation, and information Technology. By

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