AM Lecture 2

Reform pressure

How could SOEs compete with these new firms? They were not built to deal with competition, as the government had always provided. They were not motivated by profit and so they were in serious danger of going out of business. Something needed to be done and a call for reform was urged.

There had been a reform back in the 1950s where companies were given more autonomy, but this independence kept being taken away and returned at the whim of the government. This resulted in a bouncing back and forth between centralised and decentralised management.

In 1978, the Open Door Policy was introduced, supposedly encouraging foreign investment, but of course this did not gain momentum until 2002.

Now there was the problem of attempting to reform Chinese management to meet the changing environment, as industries were effectively split between the privatised sector and SOEs.

Structure and power of SOEs

Distortions and outcomes of central planning

Two stage reform period

The Sichuan experiment

Western governance reforms

Effects of "Corporatization"

The Learning Organisation

Change motivation

Chinese culture

Chinese management and tradition

Sinoelectronics - Case study

Other studies and remarks on Chinese management

Conclusions