chapter  8
34 Pages

Fiscal reform, ownership restructuring and corporate objectives in Chinese state-owned enterprises: Da Teng

ByDA TENG

Introduction Despite extensive political and economic literature on State-Owned Enterprises (SOEs), the theoretical and empirical literature on managing different SOEs remains embryonic. The central problem facing those who attempt to construct a theory of SOE management is dealing with the multiple pressures acting on SOEs with regards to firms’ objectives (Kornai 1992; Kornai et al. 2003). Governments have multiple socio-political and economic goals. SOEs may be expected to seek profit, to promote industrialization, to advance technology, to create jobs, and to reduce regional disparities. Research on critical managerial tasks is complicated by these objectives and research on effectiveness is hampered by disagreements on accountability and performance criteria (Aharoni 1981; Aharoni 1982; Jones 1982; Hafsi et al. 1987; Hafsi and Koenig 1988). The organizational life cycle literature (Chandler 1962) yields insight into this problem by proposing that the key variables of managerial priorities and effectiveness criteria change during stages in the life cycle (Hafsi et al. 1987). I argue that strategic orientation and managerial priorities in Chinese SOEs change not as reflections of the organizational life cycle, but rather as reflections of the politically structured restriction of resources after the Chinese economic reform.