Abstract
Bureaucratic Hierarchy and Feudal Hierarchy are two confusing concepts in organization literature, especially inthe study of the organizational culture of enterprises in China. This article clarifies the two concepts in the firstplace. Ralston et al. (2006) and Tsui et al. (2006) suggested that the dominant organizational culture of China’sstate-owned enterprises (SOEs) was Bureaucratic Hierarchy, consistent with Quinn and Cameron (1983)’s “lifecycles - criteria of effectiveness model”. However, according to Boisot and Child (1996)’s “Chinese and Westernpaths to modernization” model, China’s SOEs are dominated by Feudal Hierarchy culture. This article proposesthat the dominant organizational culture of SOEs remains to be Feudal Hierarchy, and then critically examinesthe literature to support this proposition. Finally, it points to key obstacles in the codification/modernizationprocess of China.
Highlights
Both research come to the conclusion that the dominant organizational culture of China’s state-owned enterprises (SOEs) is Bureaucratic Hierarchy
It is necessary to distinguish between Bureaucratic Hierarchy and Feudal Hierarchy in the first place.Bureaucratic Hierarchy is one of the four organizational culture types contained in the Competing Values Framework (CVF, Quinn and Rohrbaugh, 1983, Figure 1)
Their sample consisted of 435 Chinese managers from 233 SOEs, 96 private-owned enterprises (POEs) and 106 foreign-controlled businesses (FCBs). They conducted a multivariate analysis of covariance (MANCOVA) on the scores obtained in the questionnaire and resulted in four main findings. They declared that these findings strongly suggested that today’s SOEs were embracing a Market culture in conjunction with the Bureaucratic Hierarchy orientation, which fit the “mature” stage in an organizational life cycle
Summary
The proposition in this article on the organizational culture of China’s SOEs supports the “Chinese and Western paths to modernization model” (Boisot and Child, 1996, Figure 2) which is established on the basis of “C-space model”. Chinese path to modernization since 1978 involved decentralization in the lower reaches of the C-space Such decentralization led not to markets but to clans and permitted the more local and personalized institutional order, which were labeled by Boisot and Child (1996, p.622) “network capitalism”. The security of property rights, which, according to the Western tradition was guaranteed by the rule of law in democratic societies, in China derived primarily from guanxi with local authorities. Based upon the arguments above, this article presents the following proposition: The dominant organizational culture of China’s SOEs remains to be Feudal Hierarchy
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