Catch-Up and Competitiveness in China: The Case of Large by Jin Zhang

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The Chairman and the Deputy Chairman are Non-Executive Directors. The Company Secretary reports to the Non-Executive Chairman and is not a part of the executive management. The board has a board process policy that defines its activities and responsibilities as well as the rules for conducting its activities. The board processes policy, formulates the cycle of board activities and the setting of its agenda, the qualification of board membership, the rules of conduct for board members at meetings, the provision of information to the board, the process for directors to obtain independent advice and the assessment of the board’s performance.

CHINESE SOE 7 The reform of the Chinese state-owned enterprises started in early 1980s through adoption of the director responsibility system (DRS) and the contract management responsibility system (CMRS). The DRS was introduced from 1984 to 1986 with the aim of separating the enterprise management from party control. Under the DRS, the enterprise director had the commanding power and responsibility for the internal and external operations of the enterprise (Child, 1994). The CMRS was introduced from 1987 with the objective of separating the enterprise management from ownership of state assets represented by the government and went through two periods: 1987–90 and 1990–5.

The firm has the power to mould the environment, and to add new possibilities to its own information’ (Marris, 1967: 112–13). The internal organisation is of central importance to the growth of the firm. The firm’s administrative arrangement serves as a conduit linking managerial resources to material and financial resources. Managers have administrative control over productive assets and are able to operate in any field of business activity, produce any products they find profitable and virtually in any place in the world they choose.