A Study Of Reform In The Organizational Structure Of The Domestic State-owned Enterprise

Organizational system is the established venation and interaction between the various components of an organization for the attainment of its aim. The appropriateness of its structure directly affects the efficiency of the organization, challenged by the dramatic changes in a developing environment; enterprise should have the capacity of improvement and innovation in case of failure in fierce competitions. The reform of the domestic state-owned enterprise is a way to strengthen its vitality and competitive power through innovation of its structure in order to fully exert the function of the organization.This paper, through a retrospection of the history of reform on the state-owned enterprise in China, makes a profound analysis on the necessity of the structure innovation and the difficulties and blocks at present. An assumption on the future structure of the organization of the enterprise is also made in this paper.From the foundation of China in 1949 to 1978, before the Chinese Reform and opening up, innovations and reform had been carried on for decades to improve the efficiency of the state-owned enterprise. However, such reforms are not significant in that the enterprises were deprived of autonomy under the Planned Economy. The great charge of the enterprise by the government separated the organization structure from its function, which greatly restrained the development of the enterprises. Since the reform and opening up in 1978, state-owned enterprises have gradually become marked-oriented and the reform of state-owned enterprises has achieved unprecedented accomplishments in the transition from Planned Economy Institution to marked Economy Institution. Instead of focusing on organization structure, management institution and staffs, reform in the early stage narrowed its scope on technical aspects. Furthermore, the focus is unduly centered currently on property rights while innovation of organizational structure in enterprises is still being ignoredand reform of organizational structure cannot go further. It has been proved by practice that new ways of production and new technology have not succeeded in China as expected. One of the important reasons is that fundamentally the improvement in big scale of production efficiency and management benefits are restricted by dated organizational structure and management patterns. Moreover, taking property rights as the only decisive element for the survival of enterprises makes it hard to establish modem company institution.While various of organizational structures come into being, optimizing organizational structures now becomes a key to establish modern management in state-owned enterprises in China. Reducing management layers, decentralizing power and establishing flexible organizational structure are the cores of the reform of domestic state-owned enterprises. The reform of organizational structure under the guidance of market principle, systematic principle integrity principle and innovation principle should be carried out in such ways like gradual perfection, development based on its priorities or through transformation in accordance with their individual characteristics.