The Four Factors: ...of Chinese State Owned Enterprise Turnaround

Abstract: This thesis has assessed turnaround processes in joint ventures (JVs) between Swedish-based enterprises and Chinese State Owned Enterprises (CSOEs). Based on 39 in depth interviews with Swedish corpoorate representatives China, a case study of five Swedish firms operating JVs with CSOEs is provided. The analysis takes its standpoint from the existing literature on Organizational Change, Corporate Post Merger Integration and National Culture. Analyzing the turnaround process from an organizational perspective, the authors use the “7S Framework” (Waterman et al. 1980) to test the previous literature’s relevance to the empirical findings. The authors bring forward a new theoretical model, designed to fit the special context of a JV turnaround with a CSOE: The Four Factors of Chinese SOE Turnaround. First, the turnaround of Systems implies that implicit systems are replaced by explicit systems. Second, in the absence of explicit systems, the CSOE is dependent on the skills and mindset of the Human Resources employed. Third, Control overthe organization is needed in terms of the JV partner as well as the employees. Finally, maintaining well developed Governmental Relations is an important element of all business activity in China.