How Ctrip Overcame Innovation Challenges in a Large Company: Decentralization, Long‑Term Focus, Incentives, and Market‑Based Coordination

During the "China Green Company Alliance" round‑table held on September 18‑19 in Shanghai, Ctrip co‑founder and CEO Liang Jianzhang used Ctrip as a case study to dissect the innovation dilemmas faced by large corporations and shared his solutions.

First, use a decentralized structure to mitigate risk. Large firms often avoid risk when they are already successful, leading many decision‑makers—from legal to finance—to veto new initiatives. To counter this, Ctrip redistributed functions, giving new business units independent services, R&D, and venture capital, allowing faster innovation despite lower efficiency.

Second, do not focus solely on short‑term profit. While listed companies chase profit maximization, Ctrip shifted its performance metrics toward market share, accepting short‑term profit declines to strengthen long‑term competitiveness against venture‑backed startups that can afford to burn cash.

Third, fully leverage incentive mechanisms. Unlike large firms that rely on promotion‑based incentives, Ctrip created equity‑like rewards for its 1,200‑person business‑travel division, treating it as an independent entrepreneurial team to boost motivation.

Fourth, eliminate coordination bottlenecks. Ctrip granted decision‑making authority to independent teams while using market‑based methods—clear property rights and cost‑sharing—to resolve internal disputes, reducing the need for headquarters approvals.

Fifth, encourage talent mobility. Internal talent exchanges are now handled in a market‑oriented way, allowing teams to freely recruit from each other, which prevents stagnation and promotes cross‑departmental innovation.

Overall, the key to enhancing a large company's innovation capacity is to make it operate like a small, agile firm, where decentralized units can take risks, focus on long‑term market positioning, and be motivated by entrepreneurial incentives.