Turnaround, Corruption and Mediocrity: Leadership and Governance in Three State Owned Enterprises in Mainland China

We focus on moral climates through case studies of three state owned enterprises (SOEs) in a South China City. In Company A, a shipbuilding company, the general manager persuaded the supervisory bureau to allow him to replace the old top management team with managers chosen on merit, and who support...

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Bibliographic Details
Published inJournal of business ethics Vol. 43; no. 1/2; pp. 111 - 124
Main Authors Huang, Linfen Jennifer, Snell, Robin Stanley
Format Journal Article
LanguageEnglish
Published Dordrecht Kluwer Academic Publishers 01.03.2003
Springer Nature B.V
Subjects
Business ethics
Business studies
China
Climate
Corporate culture
Corporate governance
Corruption
Economic reform
Enterprises
Ethics
Governance
Government corruption
Hotels
Leadership
Management styles
Managers
Market economies
Moral corruption
Morality
Political corruption
Power
Public enterprise
Regulation
Role models
Studies
Subsidiary companies
China
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Summary:We focus on moral climates through case studies of three state owned enterprises (SOEs) in a South China City. In Company A, a shipbuilding company, the general manager persuaded the supervisory bureau to allow him to replace the old top management team with managers chosen on merit, and who supported his desire for reforms. He exercised transformational leadership, established internal rule of law, cultivated a spirited moral climate, and achieved turnaround. At Company B, a financial services conglomerate, the general manager exploited strong political connections, enfeebled the governance structures, and with two subsidiary barons proceeded to milk company resources. That, and a large contingent of sleeping incumbents (idle protégés), bred a moral climate overrun by corruption, dereliction of duty and hubris. Bankruptcy was not averted. Hotel X, a subsidiary of company B, was a partial machine bureaucracy; its moral climate characterised by punishment avoidance and lack of spirit. A headquarters power bloc and the sleeping incumbents whom they protected prevented a law abiding, equity sensitive general manager from improving performance, and he lost heart. From these cases, we build a model of the relationship between moral leadership, institutional superstructure, internal governance and control systems, enterprise moral atmosphere, and performance.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0167-4544
1573-0697
DOI:10.1023/A:1022919418838