Governance of State-owned Companies’ Party Organization, Board Informal Hierarchy and Company’s Performance
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| Title | Governance of State-owned Companies’ Party Organization, Board Informal Hierarchy and Company’s Performance
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| Author | Huang Wenfeng and Zhang Jianqi |
| Organization | Sun Yat-sen University |
| Email | huangwf5@mail.sysu.edu.cn；lnszjq@mail.sysu.edu.cn |
| Key Words | State-owned Enterprises; Governance of Party Organization; Board Informal Hierarchy; Company’s Performance; Environment Uncertainty |
| Abstract | How communist party exert its unique advantages in state-owned enterprises in order to combine the leading ship of the communist party and the promotion of corporate governance is a big issue of Chinese state-owned enterprise reform. However, how the governance of state-owned companies’ party organization affect Chinese state-owned enterprises has not being fully uncovered. Based on the view of group informal social structure, this paper focus on the effect that the governance of state-owned companies’ party organization brings to the board informal hierarchy so as to further study the relation between board informal hierarchy and company’s performance. Study shows that the governance of state-owned companies’ party organization has prominent positive effect on the equalization of board informal hierarchy, but under normal circumstance, the equalization of board informal hierarchy has no significant positive effect on company’s performance. A further research shows that only when facing the environment of high uncertainty can the equalization of the board of board informal hierarchy has significant positive effect on companies’ performance. The result of the research implies that the inner workings of state-owned enterprises will offer an important opportunity to innovate the approaches for state-owned companies’ party to exert their political critical influence. It is not enough to exert the advantage of party organization only by “Cross Appointment Policy”, it still needs to take the environment into consideration. |
| Serial Number | WP1011 |
| Time | 2016-01-05 |
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