ABSTRACT
The established system of pragmatic technocracy embedded in state-owned commercial banks' (SOCBs) governance framework can not only integrate a Leninist authoritarian state with an increasingly open market, but also combine party control and political correctness with entrepreneurship. Organisational transformation involves systemic adaptability and whole-system change at multiple levels, and radical and unanticipated changes in formal rules can be expected to disturb the existing institutional equilibrium. The adaptation of the Chinese Communist Party regime can be viewed to a great extent as a politically rational process of instrumental metamorphosis. For SOCBs, a more difficult and challenging task is to balance political correctness and professionalism within an increasingly modernised framework of corporate governance during a state-led market transition in which commercial banks are a policy tool. The effectiveness of technocracy based on a contractual responsibility system in SOCBs is greatly contingent on the marketisation of labour supply and recruitment on the one hand, and the institutionalisation of performance assessment on the other.
