ABSTRACT
This chapter introduces the CMI model of the socialist enterprise in China and discusses the limitations of the CMI model and problems in its implementation. The CMI model deals with three important dimensions: the state-enterprise relations, the manager-worker relations, and managerial autonomy between the state and worker. The Chinese model of the socialist enterprise, during the initial reform period, was defined by the three components: the tax-for-profit system, the manager responsibility system under the leadership of the party committee, and egalitarian bonuses. In the contracted management system, state enterprises sign a contract with the state about mutual responsibilities, rights, and benefits associated with the management of the enterprise. The manager responsibility system deals with one of the most serious problems in the initial model of the Chinese enterprise, the lack of independent managerial initiatives and decision-making power. The internal contract system shows that Chinese have recognized the importance of the internal mechanisms of the enterprise.
