Phase transitions and emergence of entrepreneurship: The transformation of Chinese SOEs over time

Configurational theory has been a key building block of organizational research. An understanding of how certain configurations evolve over time, especially during discontinuous changes such as economic transition, has been largely a missing link in the literature. Considering economic transition as a process rather than an outcome, this study examined strategic adaptations among Chinese SOEs in two phases, 1990 and 2002. Findings from two surveys and from interviews revealed that environmental characteristics changed significantly over time and that firms responded with more entrepreneurial strategies aimed at firm growth rather than at satisfying state planners. Such changes were related to improved performance. The study closes by offering implications for research and practice.