Building Capable Organization via Technological Innovation: A Study of a China's Leading Textile Machinery Company

Abstract

ABSTRACT One of the most interesting structural adjustments from a centrally planned government to a market economy has taken place in China. When China's began preparation for entry into the World Trade Organization, the SOEs found themselves with little time to prepare for outside competition. The long-term influences of traditional centralized systems left companies in a state of redundancies, stagnation and operational obsolescence. Most lack flexibility in terms of structural change, were weak in technological innovation, had a large number of surplus employees, as well as inefficient production and business operations. This paper chronicles the transformation of one of China's largest leading textile machinery manufacturing companies, Jingwei Textile Machinery Company Ltd. (Jingwei) in its transformation from a relatively inefficient and ineffective SOE to competitive leader in the textile machinery manufacturing industry. In just one year (1998 to 1999), Jingwei realized an astounding 96.2 percent increase in sales. Much of the company's success is attributed to a commitment to technological advancements and the foresight of top management.