chairman of new world development company limited cheng yu tong cheng yu tong group 6

Chairman of New Chairman of New World Development World Development Company LimitedCompany Limited

Cheng Yu TongCheng Yu Tong

Group 6Group 6

Outline (Click to go to different parts)

Profile of CHENG YU TONG His Career Development Position of CHENG YU TONG His personal Attributes as a leader

- Trait Approach- Behavior Approach

His leadership style Situational factor contributing to his success Will Cheng continue success as a leader? What we’ve learn from him?

Profile of CHENG YU TONG Name: CHENG YU TONGName: CHENG YU TONG Year of birth: 1925Year of birth: 1925 Marriage status: a wife with 2 sons and 2 daughtersMarriage status: a wife with 2 sons and 2 daughters Education level: primary schoolEducation level: primary school Field : BusinessField : Business Corporation Website: Corporation Website: Click HereClick Here Core business: Core business:

Property, service, infrastructure, Property, service, infrastructure, ports, telecommunication and ports, telecommunication and some strategic business.some strategic business.

Back to our outlineBack to our outline

His Career Development 1940

worked in Chow Tai Fook, a jewelry shop, as trainee 1943

Married with daughter of Chow Tai Fook 1960

Chow Tai Fook was acquired by Dr. Cheng Yu Tong 1970

establishment of New World Development In late 70s

diversify to other business e.g. gambling.foreign property , TV, hotel

In 90sdiversify to telecommunication market eg. New world Mobility


Position of Cheng Yu Tong

Chairman of Chow Tai Chairman of Chow Tai Fook Enterprises Fook Enterprises LimitedLimited

Chairman of the New Chairman of the New World Development World Development Company LimitedCompany Limited

Director of the Hang Director of the Hang Seng BankSeng Bank


Personal Attributes as Personal Attributes as a a LeaderLeader

Personal Attributes as a leaderPersonal Attributes as a leader

Trait approach (Big Five Model)Trait approach (Big Five Model) Behavioral approach Behavioral approach

(Yukl’s approach)(Yukl’s approach)

Trait Approach (Big Five Model)

An integrative conceptual frameworkAn integrative conceptual framework small number of metaconstructssmall number of metaconstructs encompass all relevant personal traits of a encompass all relevant personal traits of a

leaderleader

Simple~~Simple~~

Trait approach (Big Five Trait approach (Big Five Model)Model)

SurgencySurgency • Extroversion Extroversion

Always go to play golf with his friends Always go to play golf with his friends

e.g.Li Ka Shinge.g.Li Ka Shing Went to China with his subordinates before he made Went to China with his subordinates before he made

contracts with the Chinese businesscontracts with the Chinese business

• Energy and activity levelEnergy and activity level At an age of 77, he is still the chairman of directors of the At an age of 77, he is still the chairman of directors of the

New World Development Company Limited and makes New World Development Company Limited and makes

important strategic decisions for the company currentlyimportant strategic decisions for the company currently ..• Need for powerNeed for power

Try to gain as much power as he can in the New World Try to gain as much power as he can in the New World Development Company Limited which is a listed companyDevelopment Company Limited which is a listed company


ConscientiousnessConscientiousness• Personal integrityPersonal integrity

Let his patron be the chairman of the New World Let his patron be the chairman of the New World Development Limited for 10 years (until March,1982)Development Limited for 10 years (until March,1982)

-- Need for achievement-- Need for achievement In 1972, he decided to build the best buildings in Tsim In 1972, he decided to build the best buildings in Tsim

Sha Tsui and went to Paris to ask for experts’ opinion Sha Tsui and went to Paris to ask for experts’ opinion about the style of constructionabout the style of construction..

• DependabilityDependability When he came back to the office in 1991, he could When he came back to the office in 1991, he could

increase the profit margin from $1.168 billion (1991) to increase the profit margin from $1.168 billion (1991) to $2.363 billion (1992) $2.363 billion (1992)


AgreeablenessAgreeableness• Cheerful and OptimisticCheerful and Optimistic

Investment in gambling industry (1977) and Investment in gambling industry (1977) and navigation (1983): made a loss. This did not navigation (1983): made a loss. This did not discourage him from expanding his company.discourage him from expanding his company.

Optimistic about the future of Hong Kong after Optimistic about the future of Hong Kong after 19971997. .

• Nurturance (sympathetic, helpful)Nurturance (sympathetic, helpful) Cooperation with and provision of assistance to Cooperation with and provision of assistance to

social groups (e.g. religious group) on land social groups (e.g. religious group) on land development. development.

Trait approach (Big Five Model)Trait approach (Big Five Model)

AdjustmentAdjustment• Emotional StabilityEmotional Stability

Investment in gambling industry in Telran of Investment in gambling industry in Telran of Iraq (1977): a loss.Iraq (1977): a loss.

This did not reduce his confidence in making This did not reduce his confidence in making decisions afterward.decisions afterward.


IntellectanceIntellectance• Open Minded Open Minded

Innovative: the 1st Chinese-owned Company to issue Innovative: the 1st Chinese-owned Company to issue zero coupon bond.zero coupon bond.

Made the Chow Tai Fook Enterprises Limited into a chain Made the Chow Tai Fook Enterprises Limited into a chain store.store.

But not absolutely open-minded: Rule the New World But not absolutely open-minded: Rule the New World Development Company Limited in a traditional way.Development Company Limited in a traditional way.

• Learning OrientedLearning Oriented His philosophy: on learning by doing is the best.His philosophy: on learning by doing is the best. He began his career from a position of trainee in the He began his career from a position of trainee in the

Chow Tai Fook Enterprises Limited although it was Chow Tai Fook Enterprises Limited although it was owned by his father-in-law at that time.owned by his father-in-law at that time.


Personal attributes as a Personal attributes as a leaderleader

Using the trait approach alone is not Using the trait approach alone is not enough because ….. even when the enough because ….. even when the component traits are all relevant, they component traits are all relevant, they may not have the same relationship with may not have the same relationship with leadership behavior.leadership behavior.

Therefore we also use the behavior Therefore we also use the behavior approach – the three approach – the three

dimensional model dimensional model

Behavior Approach: Task-oriented behavior

Monitoring Monitoring

He don’t reply on others to monitor the He don’t reply on others to monitor the workers. He always monitor the work workers. He always monitor the work progress by going to the construction progress by going to the construction sites frequently. Even the short-term sites frequently. Even the short-term employed workers know his boss.employed workers know his boss.


Problem-solvingProblem-solving

When the debt of his company increases When the debt of his company increases continuous in 1989, he stopped his continuous in 1989, he stopped his retirement and manage the crisis. After retirement and manage the crisis. After his effort, the debt ratio decreases. Profit his effort, the debt ratio decreases. Profit increases by double from 1991 to 1992. increases by double from 1991 to 1992.


Planning and consultingPlanning and consulting

When he prepares to invest in China in When he prepares to invest in China in 1992 or before land bidding etc., he will do 1992 or before land bidding etc., he will do some research beforehand. The he’ll some research beforehand. The he’ll consult his subordinates and then make a consult his subordinates and then make a thorough plan together. thorough plan together.

Behavior approach: Relation-oriented behavior

SupportingSupporting

He believe that only if you care about your He believe that only if you care about your subordinates and support them, they will subordinates and support them, they will do their best for the company.do their best for the company.

Behavior Approach: Relations-oriented behavior

NetworkingNetworking

He has good relationship with his subordinates, He has good relationship with his subordinates, the government (he built the Hong Kong the government (he built the Hong Kong Conventional Centre with the Trade Conventional Centre with the Trade Development Council) and Development Council) and

even his competitors even his competitors

(He always play golf (He always play golf

with Li Ka Shing and with Li Ka Shing and

Lee Shiu Kee)Lee Shiu Kee)

Behavior Approach: Change-oriented behavior

His business is diversified including His business is diversified including property, hotel and telecommunication property, hotel and telecommunication business. He know when and how to business. He know when and how to make a change to his business and he make a change to his business and he commits to the changes.commits to the changes.


Leadership Leadership stylestyle

Leadership StyleLeadership Style

Directive leadership + few Directive leadership + few elements of participative elements of participative leadershipleadership

Directive leadershipDirective leadership::• Letting subordinates know what they Letting subordinates know what they

are expected to do, giving specific are expected to do, giving specific guidance, asking subordinates to guidance, asking subordinates to follow rules and procedures, follow rules and procedures, scheduling and coordinating the work.scheduling and coordinating the work.


Elements of participative leadership Elements of participative leadership found on Mr. Cheng Yu-Tung:found on Mr. Cheng Yu-Tung:• DelegationDelegation• Psychological empowermentPsychological empowerment

Leadership StyleLeadership Style Directive LeadershipDirective Leadership

• Investment in Tsim Sha Tsui in 1970:Investment in Tsim Sha Tsui in 1970: Although he did not have expertise in Although he did not have expertise in

the construction field, he gave a lots the construction field, he gave a lots of opinions in the styles and designs of opinions in the styles and designs of the buildings.of the buildings.

He went to the construction sites He went to the construction sites frequently. Even the temporary frequently. Even the temporary workers in the sites knew him.workers in the sites knew him.


• Management styleManagement style Monitor the work closely.Monitor the work closely. Gave a clear and specific direction to his Gave a clear and specific direction to his

subordinate, Selina Chow, who was the subordinate, Selina Chow, who was the head in restructuring the Asia Television head in restructuring the Asia Television LimitedLimited

Leadership StyleLeadership Style Participative LeadershipParticipative Leadership

• DelegationDelegation After Mr. Chen gave a clear After Mr. Chen gave a clear

goal to Selina Chow, the major goal to Selina Chow, the major

decisions in restructuring the Asia decisions in restructuring the Asia

Television Limited are left to her.Television Limited are left to her. She was free to hire anyone she found capable.She was free to hire anyone she found capable. She could decide how to spend a large amount of She could decide how to spend a large amount of

money to strengthen the companymoney to strengthen the company


Psychological empowerment (Selina’s Psychological empowerment (Selina’s case)case)• The Asia Television Limited was a joint The Asia Television Limited was a joint

venture of Mr. Chen and his partner, Mr. venture of Mr. Chen and his partner, Mr. Lim Por Yen.Lim Por Yen.

• Mr. Lim did not like the huge Mr. Lim did not like the huge expenditure approach by Selina Chow, expenditure approach by Selina Chow, while Mr. Chen believed that there while Mr. Chen believed that there would be a large return if the investment would be a large return if the investment was large.was large.

Leadership StyleLeadership Style• Selina could do whatever she Selina could do whatever she

wanted to do when it was Mr. Cheng that wanted to do when it was Mr. Cheng that monitored the daily operation of the company.monitored the daily operation of the company.

• When Mr. Cheng was superseded by Mr. When Mr. Cheng was superseded by Mr. Lim, Selina’s power was taken away.Lim, Selina’s power was taken away.

• Selina dissatisfied with the arrangement and Selina dissatisfied with the arrangement and left.left.

• It was evidenced that empowerment was It was evidenced that empowerment was found under Cheng’s leadership.found under Cheng’s leadership.

Leadership StyleLeadership Style PrudentPrudent

He prefer a debt ratio of 20% and 30% is He prefer a debt ratio of 20% and 30% is only acceptable while in the industry 50% only acceptable while in the industry 50% is considered as problematic.is considered as problematic.

He spend a long time (a few years) to He spend a long time (a few years) to observe his employee's ability and observe his employee's ability and reliability. reliability.


Risk AverseRisk AverseHe once said to the He once said to the public: public:

““I prefer to earn I prefer to earn less at low risks. less at low risks. There’s no point to There’s no point to be too risky.”be too risky.”


Situational factor Situational factor contributing to his successcontributing to his success

Situational FactorSituational Factor

Turning Point in his CareerTurning Point in his Career1.1. Marriage in 1943Marriage in 1943

2.2. Riot in Hong Kong, 1967Riot in Hong Kong, 1967

3.3. Cooperation with Trade Development Cooperation with Trade Development Council (TDC) in 1985Council (TDC) in 1985

MarriageMarriage

Stepping stone of his careerStepping stone of his career Married with Chow Tsui-Ying, (daughter of Married with Chow Tsui-Ying, (daughter of

Owner of Chow Tai Fook Jewelry Co.)Owner of Chow Tai Fook Jewelry Co.) After his marriage, he become the After his marriage, he become the

manager of Chow Tai Fook Jewelry Co. in manager of Chow Tai Fook Jewelry Co. in Hong KongHong Kong

Further developed his jewel businessFurther developed his jewel business

(Expand to Diamond business)(Expand to Diamond business) Chow Tai Fook Jewelry Co. provide the Chow Tai Fook Jewelry Co. provide the

capital to establish New World Groupcapital to establish New World Group

Riot in Hong KongRiot in Hong Kong Property market collapse Property market collapse Price of land dropped a lotPrice of land dropped a lot Cheng bought large amount of Cheng bought large amount of

high quality land in low pricehigh quality land in low price Diversity business scope from Diversity business scope from

jewelry to property marketjewelry to property market Those land became land reserve of Those land became land reserve of

New World Development Co. Ltd New World Development Co. Ltd

Cooperation with Trade Development Cooperation with Trade Development CouncilCouncil

Trade Development Council (TDC) aimed at Trade Development Council (TDC) aimed at promoting HK industrial productpromoting HK industrial product

Demand for an exhibition centreDemand for an exhibition centre New World get very attractive deal from TDC New World get very attractive deal from TDC

• Big ProjectBig Project• No need to paid the difference of land price No need to paid the difference of land price

for changing land usefor changing land use• Able to build hotels around the exhibition Able to build hotels around the exhibition

centre centre good locations good locations Turn to a new page of businessTurn to a new page of business

• Further diversity New World Development’s Further diversity New World Development’s different businesses e.g. Hotel, Foreign different businesses e.g. Hotel, Foreign Property, Mass Media, TelephoneProperty, Mass Media, Telephone


Will Cheng continue success Will Cheng continue success as a leader?as a leader?

Continue success as a Continue success as a leader?leader?

Succeed ?Succeed ?• Learning OrientedLearning Oriented

Personal Commitment “Learning by Doing”Personal Commitment “Learning by Doing” Accumulate experienceAccumulate experience

• Prudent, Cautious PersonalityPrudent, Cautious Personality Careful in making decisionCareful in making decision Well planned personWell planned person

• Emphasize on NetworkingEmphasize on Networking With peers, business partner, subordinates With peers, business partner, subordinates

and governmentand government


--Delegation (Con’t)--Delegation (Con’t)• Good at delegation and empowerment Good at delegation and empowerment

to subordinateto subordinate• Cheng could focus on the issue related Cheng could focus on the issue related

to vision and directionto vision and direction• Improve decision qualityImprove decision quality


Not Succeed ?Not Succeed ?• Physical AbilityPhysical Ability

Already in the age of 78Already in the age of 78 Physical strength and health condition will be Physical strength and health condition will be

worseworse

• CronyismCronyism Trust in family members mainlyTrust in family members mainly Important decision made by him or his family Important decision made by him or his family

members e.g. his sonmembers e.g. his son His successors may not be as talented as he His successors may not be as talented as he

waswas


Not Succeed (Con’t)Not Succeed (Con’t)• Little developmentLittle development

Mainly rely on experience and Mainly rely on experience and intuition he hadintuition he had

No further development in No further development in professional knowledgeprofessional knowledge


As a result…As a result…• Generally SUCCEEDGenerally SUCCEED

Cheng do well in the most important Cheng do well in the most important criteria in effective leadershipcriteria in effective leadership•Well planningWell planning•NetworkingNetworking•DelegatingDelegating

Shades of Future SuccessShades of Future Success

However, since Cheng is already 78 years However, since Cheng is already 78 years old, he may not be in charged of the old, he may not be in charged of the company for a long time. When his company for a long time. When his successors is not able as he was, his successors is not able as he was, his kingdom could easily fall apart since he kingdom could easily fall apart since he heavily rely his family members to make heavily rely his family members to make decision for his companydecision for his company


What we’ve learn What we’ve learn from him?from him?

What we’ve learn from him?What we’ve learn from him?

There is no single best style that can There is no single best style that can contribute to one’s success. We need to contribute to one’s success. We need to have different management style eg. have different management style eg. Partcipative or directive style, that suits Partcipative or directive style, that suits different situationsdifferent situations

We have to be adaptable to changes and We have to be adaptable to changes and take the chances. As we can see from Mr. take the chances. As we can see from Mr. Cheng, he always foresee the potential Cheng, he always foresee the potential benefits of different situations and grab the benefits of different situations and grab the chance. chance.

What we’ve learn from him?What we’ve learn from him?

It is important to have good network of It is important to have good network of people. A good network can make things get people. A good network can make things get done more easily and achieve success.done more easily and achieve success.

chairman of new world development company limited cheng yu tong cheng yu tong group 6

Documents

outline slide

leader slide

cheng yu tong year of

leader trait approach

model trait approach

new world mobility

business field

core business