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UBC Theses and Dissertations

The integration of politics and economics : China’s search for a revolutionary model of factory organization Kent, Duncan Alexander


This thesis is concerned with the evolution of the policies and practice of factory management in the People's Republic of China. Beginning with an examination of the Party's history, it seeks to illustrate the development of factory management from its early political context to the particular contemporary form. In so doing it explains contemporary policy and practice as a logical extension of the political philosophy that evolved during the pre-1949 period. Thus, this thesis attempts to analyse not just what forms and methods have existed and now exist, but how and why they have come to exist. The scholarly study of contemporary China by western trained academics is often based on the assumption of capitalist superiority. "Taking," as Stephen Andors writes, "the particular historical and cultural patterns of European marketplace industrialization as general universal norms, (they)... characterize as 'pre-modern' those societies that have not developed the values and institutions that evolve within the context of the capitalist marketplace. Hence before traditional 'pre-' modern' societies can develop they must make the transits ion to a modern 'rational' outlook characterized by 'western' cultural values and traits, and employing models of scientific, 'National' organization." This type of analysis has been applied to China by a number of western trained observers who claim, as Barry Richman does, that "...certain major aspects of Chinese ideology are apparently in conflict with managerial, technical and economic rationality and hence economic progress. Yet in China there appears to be emerging-a new-form of organizing the forces of material production that offers a challenge to the Hobbesian. notions of individual interests and the Weberian notions of bureaucratic rule. The method of administering a modern Chinese enterprise is at considerable variance with the modern, western method. However, the organization of contemporary Chinese factories cannot be thoroughly understood without knowledge of its historical framework. Therefore I have attempted to provide an understanding of the existing set of conditions and circumstances that the movement faced during its early formative years. These to a large extent shaped the political philosophy that was later to direct changes in factory organization. The particular set of policies which constitute the micro-level model of factory organization do not exist in isolation from the larger, more general body of political philosophy. Thus to a large extent the successful use of China's revolutionary model of factory organization was dependent upon the successful revolutionary transformation of all of society. By 1949, the Chinese had already established a largely complete set of general principles that lay in direct contradiction to the specific principles of western, capitalist enterprise organization. Even before the Chinese began experimenting with enterprise organization in the 1950's it was obvious that what was going to develop would be radically different from the western model. What evolved out of the Yenan period was an entirely new structure of organization that stressed discipline to centralized policy guidance, yet allowed large degrees of independent, lower-level operational authority. Revolutionary authority relations became established on the basis of ability and political commitment; and were maintained on the basis of their economic and political effectiveness. These principles of revolutionary organization are still subscribed to in China's contemporary industrial economy. In western society non-material incentives are of little value, and given the capitalist organizational model this is understandable. Non-material incentives function when thereto exists other than material reasons for working. In western society these reasons are not prevalent. Yet China even before 1949 had begun a program to promote social and political incentives to work. Most importantly however, was the realization of the direct association between the form of organization and the forms of incentives that were needed. The Chinese realized that social and political incentives could be just as, or more important than economic incentives given the right organizational form. Political goals could be transformed into economic realities. In contemporary China the organization of industrial enterprises is guided by the policy of "two participations, one reform and triple combination." First instituted during the Great Leap Forward this policy outlines the power relations within the factory. "Two participations" stipulates that first, upper-level cadres must labour a set number of days on the production line and secondly, workers must be involved in administrative decision- making in a regular and meaningful way. "One reform" means that all structural or organizational blocks to the implementation of two participations must be eliminated, and especially that both participations are regularized in such a way that they can be both checked and enforced. The systems of individual responsibility and rigidly defined job roles have been eliminated because they were not compatible with collective decision making and the elimination of status and prestige differences between mental and manual work. Similarly, '3 in 1' innovation committees have been established and are seen as a basic part of the new-approach to technology. Mass technical innovation is regarded as the necessary alternative to foreign technical expertise which China largely rejects. As during the Yenan period, the Chinese still place the highest importance on self-sufficiency and self-reliance. Clear cut distinctions between workers and cadres and between workers and technicians no longer exist, and new forms of 'worker-technicians' and 'administrative-workers' are evident. The similarities between the Yenan and contemporary period are striking. The simplification of administration is another aspect of that similarity. The levels of control have been reduced and large numbers of cadres have been de-centralized. More decisions are being made on the lowest levels with increased local control. Material incentives are widely regarded as 'sugar coated bullets.' Nowhere can anyone receive piece wages, bonus payments or even overtime pay. The wage differentials of the wage-grade system have been narrowed to a point where, even prior to the Cultural Revolution, they were the smallest of any country in the world. The Chinese do not assume that people will only work in maximizing individual monetary gain. Thus individual monetary incentives are not seen as the only or necessarily the best form of motivational stimuli. Rather they see people as capable of responding to a wide range of stimuli. These include moral, political and ideological incentives. Most importantly perhaps, the Chinese do not assume that economic success can only be measured in terms of productivity and profitability. Rather they assume that participant satisfaction is of equal importance. The organization of industrial enterprises must be both economically and politically acceptable.

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