Influencing Mechanisms of Institutional Changes on the Organizational Culture of SOEs in China: The Case of Dongfang Turbine Co., Ltd. YANG Yong Thesis submitted as partial requirement for the conferral of Doctor of Management Supervisor: Prof. Francisco Nunes, Senior Lecturer, ISCTE-IUL, Departamento de Recursos Humanos e Comportamento Organizacional Co-supervisor: Prof. JING Runtian, Full Professor, University of Electronic Science and Technology of China, School of Management and Economics, January 2012 The Influencing Mechanisms of Institutional Changes on Organizational Culture in SOEs: The Case of Dongfang Turbine Co., Ltd. YANG Yong - Spine - The Influencing Mechanisms of Institutional Changes on Organizational Culture in SOEs: The Case of Dongfang Turbine Co., Ltd. YANG Yong Thesis submitted as partial requirement for the conferral of Doctor of Management - Supervisor: - Prof. Francisco Nunes, Senior Lecturer, ISCTE-IUL, Departamento de Recursos Humanos e Comportamento Organizacional - - Co-supervisor: - Prof. JING Runtian, Full Professor, University of Electronic Science and Technology of China, School of Management and Economics, - January 2012 Abstract This thesis takes Dongfang Turbine Co., Ltd. (abbreviated as DTC) as a typical case of Chinese state-owned enterprises (abbreviated as SOEs). Case study is used as the research method, combining qualitative and quantitative analysis. Data was collected from different sources including public reports, newspapers, journals, a questionnaire survey and in-depth interviews so as to explore how the mechanisms of the institutional environment and change influence organizational culture. Through deep analysis, four stages of institutional change of SOEs, as well as the relevant basic characteristics of institutional environment, organizational culture and management style in each period have been identified. It was also found that the different institutional environments always required corresponding management styles fitting the specific characteristics of that period of time, and that the organizational culture enhanced the formation of this kind of management style through the core values historically formed across those periods of time. As the main theoretical contribution, a theoretical model was set up to analyse the connections among institutional environment, organizational culture, management style and organizational performance. The findings of this research have a significant practical value for SOEs, to assist them in their endeavours on how to create and change organizational culture to support their own development in today’s China. Key words: Institutional Environment, Organizational Culture, Management Style, Case Study in China JEL: M14 Resumo Esta tese analisa o caso da empresa Dongfang Turbine Co., Ltd. (DTC) enquanto caso típico de uma empresa estatal chinesa. O método do estudo de caso é adotado na investigação utilizando-se análise quantitativa e qualitativa. A informação foi recolhida a partir de diferentes fontes incluindo documentos internos da empresa, relatórios, artigos na imprensa, estatísticas oficiais, bem como através de um questionário administrado às chefias intermédias da empresa e entrevistas a dez gestores de topo com a intenção de explorar a forma como os mecanismos da envolvente institucional atuam sobre a cultura organizacional e a influenciam. A análise permitiu identificar quatro fases de mudança institucional que afetaram as empresas estatais chinesas desde a implantação da República Popular da China bem como as características principais da envolvente institucional, da cultura organizacional e do estilo de gestão em cada um desses períodos. O estudo revelou também que as diferenças na envolvente institucional exigem diferentes estilos de gestão de acordo com as características de cada período e que é a cultura organizacional que promove o tipo de estilo de gestão através dos valores que historicamente se formaram na empresa através do tempo. Em termos de contribuição teórica, a tese propõe um modelo que permite analisar as interligações entre a envolvente institucional, a cultura organizacional, o estilo de gestão e o desempenho organizacional. Os resultados deste estudo têm importância prática significativa para as empresas estatais chinesas na medida em que as pode ajudar a criar e/ou a mudar uma cultura organizacional que as apoie nos seus objetivos de contribuição para o desenvolvimento da China de hoje. Palavras chave: Envolvente Institucional, Cultura Organizacional, Estilo de Gestão, Estudo de Caso na China JEL: M14 Acknowledgements I have finally completed my doctoral thesis after hardworking for one year and a half. I cannot help but thinking of those people who gave me great help in the process of my research, when the three-year study ends up with this thesis. Here, let me show my appreciation to all of you. I would like to express my sincere thanks to my mentor, Professor Jing Runtian from UESTC. The profound knowledge, superb and amazing teaching skill, rigorous studying attitude and a character of modesty he has, are well worth learning in my lifetime. Professor Jing gave me detailed guidance and selfless help during the whole process from selecting the research subject, confirming the thesis structure, designing the research model, reframing the perspectives of the writing procedure. Especially when he stayed in USA as a visiting scholar, he not only asked several senior fellow students to be my counsellors, but also helped me to revise this thesis repeatedly through emails. His support from overseas helped me to complete the thesis on time, so that I could be one of the first to attend the thesis defence. Once again I would like to express my deep respect and heartfelt thanks to Professor Jing. Simultaneously, I would like to express my heartfelt thanks to another mentor, Professor Francisco Nunes from ISCTE Business School of University Institute of Lisbon, Portugal. Although we have never met during my research, the emails and emotions have linked us together. He not only gave me theoretical guidance and modification of thesis, but also helped me to collect plentiful archives of research from other countries. All of these will be inscribed in the deepest place of my heart for the rest of my life. I would like to thank my mates such as Liu Pu, Du Yifei, Zhang Wen, and Bai Shuaijiao. Liu Pu, the fellow student, and Du Yifei, my teacher, are just like my elder brothers. They helped me to design my in-depth interview outline, and joined in the interview together with me as well. During the process, they gave me so many suggestions on theories and thesis modification. Zhang Wen, the junior sister student, who often reminded me the schedule requirement of the thesis, has set up a bridge between the university and me. Bai Shuaijiao, the junior fellow student, helped me to revise the English version of the thesis. Therefore, I would like to thank my senior fellow students, junior sister students and junior fellow students, who are the reflection of Professor Jing. In addition, I would like to express my heartfelt thanks to my leaders and colleagues in Dongfang Turbine Co., Ltd (DTC), who gave me substantial support for my research. The leaders such as Ding yi, Chen Kuanjin, Zhang Shengquan, Xu Zhengwei, Zhang Zhiying and Zhang Wenfeng participated in my in-depth interviews with enthusiasm, and introduced those significant events they experienced without any reservation. They not only helped me to finish my dissertation, but also made me learn excellent qualities of leadership and the management experience of top leaders. Yin Shoujun, Manager of Organization Department, helped me to organize the questionnaire survey. Sun Yansong, Secretary of Propaganda Department, helped me to collect a large amount of historical data. What they have done impressed me a lot. And I will remember forever. I also would like to express my thanks to Xiao Wen, Sun Ping and Chen Yang, the teachers of UESTC's DBA Project Team. During my study, Xiao Wen, my teacher, really impressed me with her pursuit of excellence and fluency in English. The hard work of Sun Ping and Chen Yang guaranteed us to complete our studies successfully. I want to extend my sincere thanks to teachers of DBA Project Team for their concern and help. Finally, I would like to pay my highest respect to the experts and scholars who are going to read and appraise this doctoral thesis. Contents Chapter 1: Introduction .............................................................................................................. 1 1.1 Background of Research ................................................................................................ 1 1.2 Issues under Study .......................................................................................................... 5 1.3 Research Significance .................................................................................................... 6 1.3.1 Theoretic Significance ........................................................................................... 6 1.3.2 Practical Significance ............................................................................................ 7 1.4 Research Design ............................................................................................................. 7 Chapter 2: Literature Review ..................................................................................................... 9 2.1 Overview of Organizational Culture Research .............................................................