Chen (2004)

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Chen (2004) - Chinese State-Owned Enterprises

From 1949 when the Communist party (People's Republic of China - PRC) took control in China, all companies became state property, having lots of influence on the development of Chinese State Enterprises (CSEs).

The government imported a new management system from the Soviet, introducing its five-year-plan. It dissolved any sort of market and commoditisation and established its own state-set prices, rules and systems for firms.

China adopted the Soviet macro-management organised around a network of several branches of industry. Firms were very hierarchical, with top management generally consisting of those who were also government officials.

1958 was marked by "The Great Leap Forward", where managers were given more autonomy, with jurisdiction being given to lower levels of government. Power shifted back to centralisation in 1961, but decentralisation became popular in the Cultural Revolution.