Extract
A dynamic view of organizational transformation: the changing face of Chinese SOEs under transition.
The controlled process of economic reform in China has attracted growing attention from around the world due to its significance for theory and practice. What has been missing in the literature is the temporal dimension, i.e., the changes over time in key variables such as organizational environment, -firm strategic adaptations, and the performance implications, since Chinese reform officially began in 1978. Taking a dynamic systems perspective, and drawing literature from organizational study and thermodynamics, we follow the "staged model" of economic transition to study the changes in organizational environment and firm strategies over the last two decades. We suggest that as the result of more than two decades of well-controlled transitional process characterized by incrementalism, institutional environment has become more conducive to entrepreneurial activities, and consequently, firms responded with more willingness to take risk and innovate. Furthermore, we suggest such process has been escalated by an influx of newly founded -firms that bring in added energy and complexity. Finally, we examine the changes leadership profile during transition. Implications for research and practice are discussed.
********** Since the 1970s, fundamental transition has transformed the economic landscape of the People's Republic of China. One of the central aims of the reform in China is to improve the performance of the economy, which ultimately boils down to performance of the firm, especially the previously notorious, inefficient state-owned enterprises (SOEs). Whether such massive transition will be successful, to a large extent, will be determined by 1) whether the environment is moving from state monopoly toward one that favors entrepreneurial activities, 2) whether firms respond to such change by adopting strategies aimed at achieving growth rather than satisfying state planners, and 3) whether such newly transformed environment and firm strategic adaptation lead to improved performance (Peng, 2003; Tan and Litschert 1994). As China enters the WTO and plays an increasingly influential role in the global economy, an improved understanding of environmental changes and firm strategic adaptation becomes critical. For organizational researchers, the transitions offer fascinating grounds to refine and test existing theories and to develop new ones. For policy makers and managers in China, the success or failure of the growth of the firm has a direct bearing on the outcome of the economic transition. For Western significance as customers, suppliers, strategic alliance partners, and competitors. About a decade ago, after China had its doors open to the West for more than ten years already and embracing the world with perhaps its most dramatic economic refor...See the full content of this document
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