A Case Study On The Growth And Organizational Evolution Of Aluminum Group Of China

Business group played an important role in the development of China’s national economy, and is also a major force on behalf of China in the competition of international market. With the practice of China’s reform and opening up, business group has grown up quickly, and related theories is continuously enriched. Nowadays more and more business group was established and grow, and the driving factors effected the growth mode are becoming increasingly diverse. This study follows the new institutional theory and combine Chinese context, taken the business group as an open natural system which based on the transaction cost theory and the agency theory, as well as view of political economy, resource-based view and the network view. Then analysis driving factors of growth of business group from both technical and institutional environment, we also discussed the decision logic which business groups complied with in their organizational behavior and the business group’s internal relationship between member enterprises.We summarized three kinds of growth path from the development process of Aluminum Group of China, and focus on the driving factors in its different growth stage and decision logic in its organizational behavior, and also attempt to analyze the characteristics of its internal relationship between member enterprises. Through the study of the case, we think the growth path in different stage can be divided into bureaucracy restructuring, mergers and reorganization and natural growth. In this study, we find that the path of bureaucracy restructuring primarily driven by the government elements and follow the logic of legitimacy, the path of natural growth is mainly driven by market elements and follow the logic of efficiency, the path of merger and reorganization is likely have been driven by two elements and follow the logic of both legitimacy and efficiency. Regarding intra-group enterprises relations, we believe the bureaucracy restructuring path have a tight vertical connections; Natural growth path is shown a network connection.In this study, on the one hand, we introduce the theory of political economy, consider that the establishment and growth of business group is not simply the passive response to the environment, and this is a supplement for the past study that paid more attention on the technical and less on the institutional environment. On the other hand, we studied and summarized the growth process of Aluminum Corporation of China, which can enriches the empirical research on the evolution of business groups in China, and also may be helpful to the managers of business group in their decision making.