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The Management Reform of Large State-Owned Enterprises Propelled by Internet Plus: A Case Study on Contracted Management Reform of China Telecom(No.34, 2018)


By Ma Jun, Ma Yuan & Ma Shuping, Research Team on “The Industrial and Enterprise Reform under the Background of Internet of Everything and Intelligence”, Enterprise Research Institute, DRC

Research report No.34, 2018 (Total 5309) 2018-2-23

Abstract: The composition of large state-owned enterprises (SOEs) in China is generally featured by numerous and multi-level departments. As a result, the decision-making process takes a long time and some decisions are often divorced from reality. With the impact of traditional system, the current large SOEs are prone to have the defects of overstaffing and overlapping functions. The development of the Internet has promoted industrial restructuring and regrouping. In view of China Telecom’s practice in implementing the contracted management reform at the production line, the use of Internet technology and concept can help large SOEs improve their management level. The concrete measures include the establishment of market-driven development mechanism, the reform of internal organizational structure and production process boosted by market force, the change of corporate organization from a traditional pyramid structure to a delayered and gridded structure, the integration of social resources to put into effect open-oriented innovation, and the accumulation of knowledge and experience. However, the contracted management reform has revealed that corporate reform is still constrained by the state-owned assets administration system. Efforts need to be made to strengthen the innovation of state-owned assets administration system, delegate more powers to enterprises according to company law, and make further improvement of corporate incentive and restraint governance mechanism.

Key words: China Telecom, contracted management reform