Socialized Economic Action: A Comparison of Strategic Investment Decisions in China and Britain

Abstract

This paper examines six strategic investments occurring in three Chinese state enterprises and three British firms matched, by types of products, with their Chinese equivalents. In both China and Britain, the form of decision processes in these large business organizations have exhibited a similar bureaucratic style, in terms of complex approval procedures, asymmetric power relations along hierarchies, multiple vertical channels for communication, and negotiat ing between senior and operational managers. In China, however, managerial autonomy was strictly limited by the domination of planning authorities who controlled resource allocation. The involvement of multiple external agencies, who were responsible for the economy, technology, society, and national demands, introduced a disparity of interests into investment decision-making. In Britain, managers enjoyed more autonomy to formulate investment strat egies, and British firms appeared to pursue the target of profitability more explicitly, though social obligations and the perceived requirements of man agers' personal careers were also critical in decision-making. These findings suggest that strategic investment decision-making is contingent on (1) the intrinsic nature derived from problem-solving processes and resource depend ency ; and (2) the context rationality set by both the institutional environment and culture, which pre-sets the manner of resource mobilization, regulates the role of actors, configures networks between institutions and organizations, and shapes the mode of interaction between individual and group actors.