Enterprise System : " Xing " And " Waste " Variations

The reform of leadership system is the core part of the reform of state-owned enterprise in China, as well as the most difficult and important part. The attention and study on this issue is always of historical and immediate significance.The explorative effort on how to develop the leadership system in state-owned enterprises had already been initiated since the 1950s. Right after the establishment of the People's Republic of China (PRC), the Central Committee of the Chinese Communist Party (CCP), influenced and guided by the classical Leninism and the experience learnt through developing revolutionary base areas, decided to implement the"one-head leadership system"in state-owned enterprises nationwide. The northeast region, being the earliest liberated area, had basically finished the democratic and industrial reformation. With the former Soviet Union experts'help, the northeast region managed to be the first to establish the"one-head leadership system", while the rest of China, due to immature conditions and deviated awareness, had the argument whether the"one-head leadership system"or the Party responsibility system should be adopted as the major leadership system of state-owned enterprises. Then after thorough consideration and investigation, the Central Committee of the CCP decided that the"one-head leadership system"was consistent with the modern industrial manufacturing requirements and the needs of the economical development in China, therefore the"one-head leadership system"should be further implemented across the whole country.The nationwide implementation process of the"one-head leadership system"led to promising results. For instance, the emphasis on production responsibility led to the continuous clarification and refinement of the responsibilities of different functional departments. The assignments of the Party, the governance, the union, and the League within an enterprise were clearly defined and therefore the relationships between different parties were further rationalized. The administrative power was strengthened and the enterprise management was continuously improved. Nevertheless, a series of problems were also raised. The collected feedbacks indicated that the problems mainly exist in the following aspects: first, the factory managers were not competent enough in terms of cultural and management skills, and therefore were not widely trusted within the factory; second, the"one-head leadership system"was not effectively combined with the internal democracy and could not widely involve general employees into the management and development process of the enterprise; third, the"one-head leadership system"usually conflicted with the Party committee and as a result the factory manager dictated the factory affairs and the Party committee leadership was often ignored. On the above issues, the Central Committee of the CCP carried out timely investigation and research.Due to the influence of the Twentieth Congress of the Communist Party of the Soviet Union and the problems surfaced in the implementation process, the attitudes towards the"one-head leadership system"at the very high level inside the CCP started to change. In the Eighth Congress of the CCP which was held in 1956, the factory director responsibility system under the Party committee leadership was officially announced to replace the"one-head leadership system"as the newly chosen leadership system of state-owned enterprise in China. Since then, in a series of political movements the"one-head leadership system"had been constantly attacked and criticized.The"one-head leadership system"failing to be implemented successfully nationwide in the initial stage of the PRC was due to profound historical reasons. First of all, the fact that economy was subjected to politics was the root cause of the failure of the"one-head leadership system". In the initial stage of the PRC, all the work on economy had to centre on constructing and consolidating the political regime. All the political and manufacturing movements within the enterprise required the leadership and support of the Party committee. Moreover the"one-head leadership system"in the enterprise was inconsistent with the Party committee leadership system nationwide especially in the higher authorities. As a result, the abolishment of the"one-head leadership system"was inevitable. Furthermore, the imbalanced distribution of resources across the whole country was the direct cause of the failure of the"one-head leadership system". In the initial stage of the PRC, most of the important industrial and human resources were located in the northeast region of China, followed by the north China region and the east China region. This imbalanced resource distribution also explained why the"one-head leadership system"had been successful in the northeast region, yet difficult to be installed in the rest of China.