The Role of Economic and Mimetic Forces in Organizational Change: A Study of China's State-Owned Enterprises

Institutional theorists have emphasized the importance of institutional factors in causing organizational change apart from economic factors. They proposed that mimetic change is an organizational response to uncertainty and it is likely to be even more common during institutional upheaval. The transformation of the SOE (State-Owned Enterprise) is a very complicated organizational change. This paper examines the role of economic forces and mimetic forces in promoting SOE transformation among industrial enterprises above designated size from 2001 to 2006. Results support the view that SOE transformation depends on both economic forces (organizational slack and prior performance) and mimetic force (regional accumulative transformation rate). Further result indicates that regional degree of marketization mediates the relationship between regional accumulative transformation rate and SOE transformation.