Achieving Successful Cross-Cultural and Management Integration ...

Achieving Successful Cross-Cultural and Management Integration: The Experience of Lenovo and IBM
3.0 Company Background
By Sharona Peng
Lenovo,also known as Legend, was founded in Beijing, China by 11 scientists who
had a vision to create a company that would bring the advantages of information
technology to the Chinese people. With RMB 200,000 (US $25,000), as seed money,
the small, one-story shop was set up in a loaned space that opened the new era of
consumer PCs in China.
Since it was established, the company has affected the lives of millions of Chinese. It
started by introducing PCs to households, then it promoted PC usage in China by
establishing retail shops nationalwide. In addition, it also developed the pioneering
Legend Chinese Character Card that has translated English operating software into
Chinese characters, and achieved breakthroughs like PCs with one-button access to
the Internet. By 1994, Legend was traded on the Hong Kong Stock Exchange and it
produced its one-millionth personal computers after four years later. In 2003, Legend
changed its brand name to Lenovo, taking the “Le” from Legend, nod to its heritage,
and adding “novo”, the Latin word for “new”, to reflect the spirit of innovation at the
core of the company, and the company name also changed into Lenovo in the
following year.
In August 2004, Yuanqing Yang, the chairman of the board of Lenovo, has announced
the acquisition of IBM’s Personal Computing Division with a total of 12.5 billion US
dollar (6.5 billion of cash & 6 billion worth of Lenovo’s stock). This acquisition was
completed in 2005, which enables Lenovo to jump from the ninth to the third-largest
personal computer company in the world that closely followed Dell and Phillip. Today,
these two visionary companies are united under the Lenovo name. With Lenovo’s
landmark acquisition of IBM’s Personal Computing Division, the new Lenovo is a
34 / 78