The strategies of China s firms

resolving dilemmas 1st Edition Morgan

Visit to download the full and correct content document:
https://textbookfull.com/product/the-strategies-of-china-s-firms-resolving-dilemmas-1s
t-edition-morgan/
More products digital (pdf, epub, mobi) instant
download maybe you interests ...

China s Gas Development Strategies 1st Edition Shell

Centre

https://textbookfull.com/product/china-s-gas-development-
strategies-1st-edition-shell-centre/

Fool s Gold The Harlequin s Harem 4 1st Edition Tansey

Morgan Morgan Tansey

https://textbookfull.com/product/fool-s-gold-the-harlequin-s-
harem-4-1st-edition-tansey-morgan-morgan-tansey/

Twisted Fate The Harlequin s Harem 1 1st Edition Tansey

Morgan Morgan Tansey

https://textbookfull.com/product/twisted-fate-the-harlequin-s-
harem-1-1st-edition-tansey-morgan-morgan-tansey/

Harlequin Dreams The Harlequin s Harem 2 1st Edition

Tansey Morgan Morgan Tansey

https://textbookfull.com/product/harlequin-dreams-the-harlequin-
s-harem-2-1st-edition-tansey-morgan-morgan-tansey/
Twilight Warrior The Harlequin s Harem 3 1st Edition
Tansey Morgan Morgan Tansey

https://textbookfull.com/product/twilight-warrior-the-harlequin-
s-harem-3-1st-edition-tansey-morgan-morgan-tansey/

The marketization of employment services the dilemmas

of Europe s work first welfare state 1st Edition Ian
Greer

https://textbookfull.com/product/the-marketization-of-employment-
services-the-dilemmas-of-europe-s-work-first-welfare-state-1st-
edition-ian-greer/

Soft Power Made in China: The Dilemmas of Online and

Offline Media and Transnational Audiences Claire
Seungeun Lee

https://textbookfull.com/product/soft-power-made-in-china-the-
dilemmas-of-online-and-offline-media-and-transnational-audiences-
claire-seungeun-lee/

The Vampire of the Opera The Skylark and the Eagle 1

1st Edition Morgan De Guerre De Guerre Morgan

https://textbookfull.com/product/the-vampire-of-the-opera-the-
skylark-and-the-eagle-1-1st-edition-morgan-de-guerre-de-guerre-
morgan/

Narcissism and Its Discontents Diagnostic Dilemmas and

Treatment Strategies with Narcissistic Patients Glen O.
Gabbard

https://textbookfull.com/product/narcissism-and-its-discontents-
diagnostic-dilemmas-and-treatment-strategies-with-narcissistic-
patients-glen-o-gabbard/
The Strategies of China’s Firms
 ELSEVIER
ASIAN STUDIES SERIES
Series Editor: Professor Chris Rowley,
Cass Business School, City University, London, UK
Institute of Hallyu Convergence Research, Korea University, Korea
Griffith Business School, Griffith University, Australia
(email: c.rowley@city.ac.uk)
Elsevier is pleased to publish this major Series of books entitled Asian Studies:
Contemporary Issues and Trends. The Series Editor is Professor Chris Rowley of Cass
Business School, City University, London, UK and Department of International
Business and Asian Studies, Griffith University, Australia.
Asia has clearly undergone some major transformations in recent years and books
in the Series examine this transformation from a number of perspectives: economic,
management, social, political and cultural. We seek authors from a broad range of
areas and disciplinary interests covering, for example, business/management, political
science, social science, history, sociology, gender studies, ethnography, economics
and international relations, etc.
Importantly, the Series examines both current developments and possible future
trends. The Series is aimed at an international market of academics and professionals
working in the area. The books have been specially commissioned from leading
authors. The objective is to provide the reader with an authoritative view of current
thinking.
New authors: we would be delighted to hear from you if you have an idea for a
book. We are interested in both shorter, practically orientated publications (45,000 +
words) and longer, theoretical monographs (75,000 100,000 words). Our books can
be single, joint or multi-author volumes. If you have an idea for a book, please contact
the publishers or Professor Chris Rowley, the Series Editor.

Dr Glyn Jones Professor Chris Rowley

Email: g.jones.2@elsevier.com Email: c.rowley@city.ac.uk
Elsevier Asian Studies Series

The Strategies
of China’s Firms
Resolving Dilemmas

Edited by

Hailan Yang, Stephen L. Morgan,

Ying Wang

AMSTERDAM • BOSTON • CAMBRIDGE • HEIDELBERG

LONDON • NEW YORK • OXFORD • PARIS • SAN DIEGO
SAN FRANCISCO • SINGAPORE • SYDNEY • TOKYO
Chandos Publishing is an imprint of Elsevier
Chandos Publishing is an imprint of Elsevier
225 Wyman Street, Waltham, MA 02451, USA
Langford Lane, Kidlington, OX5 1GB, UK
Copyright © 2015 Elsevier Ltd. All rights reserved.
No part of this publication may be reproduced or transmitted in any form or by any means,
electronic or mechanical, including photocopying, recording, or any information storage
and retrieval system, without permission in writing from the publisher. Details on how to
seek permission, further information about the Publisher’s permissions policies and our
arrangements with organizations such as the Copyright Clearance Center and the Copyright
Licensing Agency, can be found at our website: www.elsevier.com/permissions.
This book and the individual contributions contained in it are protected under copyright by
the Publisher (other than as may be noted herein).

Notices
Knowledge and best practice in this field are constantly changing. As new research and
experience broaden our understanding, changes in research methods, professional practices, or
medical treatment may become necessary.
Practitioners and researchers must always rely on their own experience and knowledge in
evaluating and using any information, methods, compounds, or experiments described herein.
In using such information or methods they should be mindful of their own safety and the safety
of others, including parties for whom they have a professional responsibility.
To the fullest extent of the law, neither the Publisher nor the authors, contributors, or editors,
assume any liability for any injury and/or damage to persons or property as a matter of products
liability, negligence or otherwise, or from any use or operation of any methods, products,
instructions, or ideas contained in the material herein.
ISBN: 978-0-08-100274-2

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library
Library of Congress Control Number: 2015935582

For information on all Chandos Publishing

visit our website at http://store.elsevier.com/
List of contributors

P. Bai Xi’an University of Architecture and Technology, Xi’an, China

M. Chen King’s College London, London, UK

Q. Cheng Xi’an Jiaotong University, Xi’an, China

R. Gao Xi’an Jiaotong University, Xi’an, China

F. Henderson Victoria University, Melbourne, VIC, Australia

M. Jiang Xi’an University of Architecture and Technology, Xi’an, China

B. Liu Shandong Jianzhu University, Jinan, China

T. Liu Beijing University of Technology, Beijing, China

S.L. Morgan University of Nottingham, Ningbo, China

J. Shen Shenzhen University, Shenzhen City, Guangdong Province, China

Q. Shi Beijing University of Technology, Beijing, China

S. Tong University of Maryland, College Park, MD, USA

E. Wang Xi’an University of Architecture and Technology, Xi’an, China

Y. Wang Xi’an University of Architecture and Technology, Xi’an, China

Y. Wu Jiangnan University, Wuxi, China

H. Yang Shandong Jianzhu University, Jinan, China

L. Yang Xi’an Jiaotong University, Xi’an, China

S. Yang Beijing University of Technology, Beijing, China

J. Zhu Jiangnan University, Wuxi, China

Y. Zhu Xi’an University of Architecture and Technology, Xi’an, China

Preface

Over the past 35 years, China has slowly shifted away from state socialism toward
market capitalism. Due in large part to the reforms underpinning this economic tran-
sition, the Chinese economy has grown to be the world’s second largest, after that of
the United States. Many foreign companies continue to see the world’s second-largest
economy as one of the most attractive markets now and in the future. Although eco-
nomic reform opened up new opportunities for firms in the wake of this transition,
there have been unprecedented challenges in the economic environment nationally
and globally.
In terms of domestic factors, economic reform has achieved great success. In the
absence of political reform and a high degree of state intervention in the economy,
political connections have become more important for acquiring state-controlled
resources and for gaining state authorization of business activities that have allowed
firms to take advantage of these opportunities. In addition, firms in China face such
challenges as a weak demand at home, increasing labor costs, rising raw materials
costs, tighter land supply, an appreciation of RMB, and the increasing costs of envi-
ronmental protection.
With regard to international factors, one outcome of the accelerated process of
globalization is that the economic fortunes of one country are intertwined with the
global environment. The financial crisis in the United States, debt crisis in Europe,
and slow economic growth in Japan resulted in anemic global demand, which has
adversely affected China’s firms, especially manufacturers.
Facing the dilemmas at home and abroad as they have developed, China’s firms
need to rethink and readjust their strategies. The in-depth investigation of China’s
firms will not only enhance their competitive position but will also provide a devel-
opmental pattern on how to adapt to the dynamic environment of their counterparts in
a transition period. While many scholars and business managers feel excited about the
further growth of China’s firms and their increasing influence among international
counterparts, some are concerned.
The book aims to investigate and provide answers to the following questions:
l
What are the primary drivers of the growth of China’s firms?
l
Can Chinese firms sustain their growth?
l
Can other countries emulate the Chinese business model?
l
What are the long-term effects of the growth of China’s firms on the global economy?

Addressing these questions will deepen our understanding of how firms in China
try to survive or even prosper facing constraints and opportunities. A transition econ-
omy leads to China’s unique structure and system. This fundamental difference is the
key to many challenges when doing business in China. This is important because
xii Preface

businesspeople and scholars from free-market economies have failed to look at China
differently. Instead, they try to put China into the free-market economy mold. As such,
our book combines Western theories of management and the practices of China’s
firms for testing enterprise reform; the result is different from what might be suggested
by mainstream management literature.
This book, with contributions from internationally respected researchers, analyzes
a variety of topics from different perspectives. It describes and examines the methods
of development by China’s state-controlled firms; the experiences, administrative
environment and industrial administration of the firms; and the changing nature
and behavior of China’s firms.
Suitable for today’s scholars, teachers, and students in the field of business man-
agement, the book will also appeal to marketing and commercial managers and policy
makers in meeting business challenges in the Asia-Pacific region, the United States,
and Europe. It is also suitable for classroom use for undergraduate or graduate courses.
This book serves as a reference for understanding and teaching about the next eco-
nomic superpower. If people want in-depth knowledge of the firms in China, the book
is an avenue to understanding the political–economic context, experiences, adminis-
trative environment and industrial administration of the firms; thereby helping readers
to understand how the various parts of an event are linked.
The book opens with an introductory chapter by H. Yang and S.L. Morgan, Devel-
opment of China’s state-controlled firms, the case of the consumer electronics sector.
It identifies the specific characteristics of China’s state-controlled firms, which oper-
ate in a transition society undergoing social and economic transformation. In addition,
a company transformation relies on the joint effort of the government and enterprises.
Given the vast differences between the pace of economic and political reforms, this
article takes into account the interplay between economic and political institutions
during the China’s economic transition.
Chapter 2, The impact of the ownership structure of business groups on the listed
affiliated firms, by H. Yang and B. Liu, explores the link between the state-owned
shares in the business groups and the performance of the listed affiliated firms in
China. Based on a sample of 80 business groups in Shandong Province, China, the
study shows that improving the management style and providing more decision-
making power, rather than simply pursuing diversification of property rights, is an
efficient way to enhance the performance of state-owned business groups.
In Chapter 3, Labor litigation in China, Professor J. Shen exams the characteristics
and process of China’s labor litigation and its role in settling labor disputes. The study
indicates that although labor litigation has become one of the most important mech-
anisms for settling widespread labor disputes, it has a number of limitations in its
current state.
In Chapter 4, The overseas location strategies of Chinese transnational corpora-
tions, M. Chen explains the general location strategies of transnational companies and
analyzes their overseas risks and investment motives. Mengyao compares the nature
and economic environment of Western and Chinese companies in her analysis of the
overseas office-location strategies of Chinese transnational corporations.
Preface xiii

Next, in Chapter 5, Research on the relationship among large shareholders and its
economic consequences of listed companies in China, T. Liu, S. Yang, and Q. Shi state
that the relationship among large shareholders would increase the social capital of
shareholders’ network of the listed companies. Their study forges a new path to
exploring the impacts of social relationships (guanxi) in Chinese society on the orga-
nization of the listed company in China.
Real estate development is a pillar industry in China, and property developers have
achieved huge growth in recent years due to soaring housing prices. Chapters 6 and 7
by Y. Wang and her coauthors focus on the development of real estate companies in
China. The first paper focuses on the intent to survey the operational efficiency of 33
developers from 2004 to 2011 based on DEA analysis. The second sets up an assess-
ment model to analyze the core competitiveness of real estate developers based on
supply chain theory.
Chapters 8 and 9 by L. Yang and her coauthors explore the e-market in China.
As Internet technology grows rapidly, consumers like to share their opinions on the
products, the brands, and the businesses on the web. Their first study focuses on
the influences on consumers’ purchase decision with respect to the content of elec-
tronic word of mouth (eWOM) and the interaction between the suppliers and users
of the information. Methodology of questionnaire is implemented to carry on the
empirical study. In their second study, they review and analyze the double eleven
online shopping festival in China. Their studies are meaningful in a practical sense
for consumers’ rational decision making, companies’ business strategy, and retailers
who are constantly looking for new ways to increase market share and gain compet-
itive advantage.
The collection concludes nicely with The transformation of the Chinese photovol-
taic industry under globalization—The revelations from the bankruptcy reorganiza-
tion of Suntech by J. Zhu, Y. Wu, and F. Henderson. The authors made great
efforts to collect the data and exchange points of view during their research process.
They explain Suntech’s stages of strategic development and conclude that the com-
pany’s early success was due to accurate positioning, international perspective, tech-
nical innovation, brand building, and maintaining an unprecedented scale and speed at
the beginning of its development. Their study provides lessons and experiences for the
development of state-owned companies in China.
A very special word of thanks goes to four reviewers whose valuable comments and
suggestions greatly improved our book. Our gratitude also goes to the Management
Revue Publisher for providing us with the copyright permission to republish the article
Development of China’s state-controlled firms, the case of the consumer electronics
sector. We also thank the staff members of Elsevier Limited for their efforts explain-
ing the guidelines and requirements and patiently answering our questions.
About the editors

Hailan Yang teaches at the Business School of Shandong Jianzhu University in

China. She received her PhD in International Business from the Management and
Marketing Department of Melbourne University. She also has a BA in International
Economics from Shandong Finance University and an MA in Political Economics
from Shandong University of China. Her research focuses on the impact of cultural,
social, and economic changes on China’s companies. During the past 10 years, she has
been involved in many projects, including research on diversification of China’s com-
panies and the reform of Chinese state-owned enterprises. Based on her research expe-
riences in China, the UK, and Australia, she has not only gained a deep insight into
Chinese companies but also into the differences and similarities between enterprises in
China and Western companies. She acted as a trainer for Global Business Strategies in
Melbourne from 2005 to 2007, where she provided regional briefings and business
orientation and negotiating workshops on China for clients doing business in China.
She specialized in providing Australian company executives with a deeper insight
into Chinese companies and their internal mechanisms. She also developed a new
workshop titled “The State of Corporate Governance in China.”
Stephen L. Morgan is Dean of the Faculty of Social Science at the University of
Nottingham Ningbo, China, and Professor of Chinese Economic History in the School
of Contemporary Chinese Studies (SCCS) at the University of Nottingham, UK.
He joined the SCCS at Nottingham in September 2007 after 13 years at the University
of Melbourne where he was a lecturer and senior lecturer in Asian economic history.
He has more than 30 years of experience studying and writing about China. In an
earlier life, he was a journalist with, among others, the Standard Newspapers in
Melbourne, a China-based contributor to the South China Morning Post, the chief cor-
respondent of the Hong Kong Standard, as well as the assistant political and business
editor of the Far Eastern Economic Review. His primary research interest lies in the
fields of the economic and business history of China from the eighteenth to the twen-
tieth centuries, while he mostly teaches in graduate and undergraduate programs in
international business and strategic management.
Ying Wang engages in teaching and research in the area of real estate and urban eco-
nomics as Associate Professor at Xi’an University of Architecture and Technology’s
School of Management and Head of Business Administration Department. She com-
pleted her PhD in Economics at Xi’an Jiaotong University in 2008, and received her
bachelor’s degree in real estate management in 1997 and her master’s degree in man-
agement in 2000 from the Xi’an University of Architecture and Technology. She
worked at City University of Hong Kong in 2003 and King’s College London in
xvi About the editors

2014 as a visiting academic. Her research interests include urban development issues
and the theory and methodology of real estate investment. Since 2000, she completed
a series of governmental decision supportive project, involving Xi’an urbanization
quality assessment, dynamic regulation scheme on urban land supply, as well as eval-
uation on tourism land intensive use. Besides, she has acted as a consultant of real
estate companies conducting many investment appraisal reports for real estate devel-
opment projects. Recently she focuses more on international comparison on urban
regeneration, especially on Green neighborhood construction and evaluations.
Contributing authors

Bowen Liu is an undergraduate student majoring in Business Administration at the

Business School of Shandong Jianzhu University in China. His professional interests
include enterprise strategic management, business communications, and family-
owned firms. He has published two articles in leading Chinese journals and is involved
in a research project funded by the ShanDong Science and Technology Department.

Jie Shen currently is Professor of Human Resource Management (HRM) at the

Shenzhen University. Previously, he was Professor of HRM at Curtin University
(received market loading), and Associate Professor of HRM at the University of South
Australia and Monash University. He currently holds a number of visiting professorship
positions, including ones at Shanghai Jiaotong University, Southwest Jiaotong Univer-
sity, Jiangxi University of Finance and Economics, Shanghai University, Fujian Normal
University, and Northwest Agriculture and Forest University. His main research inter-
ests are HRM, industrial relations (IR), and organizational behavior. He currently serves
on the editorial boards of the International Journal of Human Resource Management,
the Journal of Organisational Transformation and Social Change and International
HR Issues (now known as Evidence-based HRM: A Global Forum for Empirical
Scholarship).

Mengyao Chen is a PhD student at King’s College London. She received her MSc
degree in International Financial and Political Relations, which contained several
courses related to globalization and global cities, from Loughborough University. This
subsequently sparked her interest in and passion for urban geography. Therefore, she did
her master’s dissertation on the topic of The rise of Shanghai as a global city in the con-
temporary globalizing world. After learning more about the importance of transnational
corporations (TNCs) in the global economy, she started to be interested in why TNCs
are located where they are in global cities, especially in China. As a result, for her PhD,
she researched the location strategies for the regional headquarters of some TNCs in
mainland Chinese global cities, namely Beijing and Shanghai.

Tingli Liu is an associate professor at the Beijing University of Technology, China.

She earned a master’s degree in Management Science and Engineering from Xi’an
University of Architecture and Technology, and she received her PhD in Business
Management from Renmin University of China. She worked at Beijing Union Univer-
sity before joining the Beijing University of Technology in 2009. Her professional
xviii Contributing authors

interests focus on corporate governance and earnings quality. She has published more
than 40 academic articles and 3 academic books.

Songling Yang is Head of the Finance Department at the Beijing University of Tech-
nology. He earned his PhD from Renmin University of China in 2002. Now, he is the
PhD tutor at the School of Economics and Management at the Beijing University of
Technology. His professional interests include shareholder relationships, performance
evaluation, and capital control. He has presented widely and published numerous
articles as well as two academic books.

Qianqian Shi is a postgraduate student studying for her master’s degree in Business
Administration at the Beijing University of Technology, China. She received her
Bachelor of Administration degree in Engineering Management from Qingdao
Technological University of China. Her professional interests include shareholder
relationships and earnings quality. She has published three academic articles, and
in 2014 she developed software called Shareholder Relationship Analysis software.

Yanfei Zhu is studying for her master’s degree in Construction Economics and Man-
agement at the Xi’an University of Architecture and Technology. She is researching
real estate investment management, especially housing price rigidity based on tacit
collusion between real estate companies. In 2012, she received her bachelor’s degree
in Engineering Management from the Henan University of Technology.

Miao Jiang completed his undergraduate study in engineering management at the

Anhui Architecture & Industry Institute in 2010 and received his Associate Construc-
tor certificate in 2011. He then worked as a construction engineer at Nanjing Newtown
Wanlong Real Estate Company Ltd., where he was responsible for site construction
supervision. In 2012 and 2013, he interned at Chinese Construction Steel Structure
Company as an associate technician and at Tianzheng Property Appraisal Consulting
Firm as an associate surveyor. He received his master’s degree in Construction Eco-
nomics and Management from the Xi’an University of Architecture and Technology
in 2013.

Pengying Bai is studying for her master’s degree in Land Resources Management at
the Xi’an University of Architecture and Technology. Her interests are strategy man-
agement in real estate companies and land use sustainability appraisal on Chinese
towns and villages. She received her bachelor’s degree in English from Xi’an Eurasia
University in 2011.

Ertao Wang completed his undergraduate degree in engineering management at

Nanyang Industrial Institute in 2010. He received his Associate Constructor certificate
in 2011 and worked as a construction engineer at Xi’an Gemdale Real Estate Com-
pany, where he was in charge of the overall quality of and schedules for construction
projects. He received his master’s degree in Industrial Engineering under Construction
Contributing authors xix

Economics and Management from the Xi’an University of Architecture and Technol-
ogy, and he published a paper titled “Research on Core Competitiveness of Real Estate
Enterprise Based on Factor Analysis and Clustering Analysis” in Applied Mechanics
and Materials in 2013.

Linyan Yang is a professor at the School of Management, Xi’an Jiaotong University.

She received her MS and PhD degrees in economics from Xi’an Jiaotong University as
well. She was a visiting scholar at the University of Alberta (Canada), Gunma
University (Japan), and the University of Maryland (USA). She has hosted and was
involved in two provincial research projects, and she was also the major participant
in several projects under the National Science Foundation of China and the National
Social Science Foundation of China. Her papers have been published in Systems
Engineering, Forecasting, Modern Economic Science, Science of Science and
Management of S. & T., and others. When she is not working, she likes to play tennis,
read books, and travel around the world.

Qi Cheng received his bachelor’s and master’s degrees in Industrial Engineering from
Xi’an Jiaotong University. He currently works in a Chinese commercial bank.

Shimeng Tong graduated from the University of Maryland with a bachelor’s degree
in finance in 2013. He presented a paper at the 10th EBES (Eurasia Business and Eco-
nomics Society) Conference in Istanbul, Turkey. He currently works for a hedge fund
company in Manhattan and the China Foreign Exchange Trade System in Shanghai.
His professional interests include advertising, mass communication, and marketing.

Rui Gao (Ray Rui Gao) is a postgraduate student at the Hong Kong University of
Science and Technology, pursuing his master’s degree in accounting. Previously,
he received his bachelor’s degree in business administration from Xi’an Jiaotong
University. His research interests include corporate governance, financial informa-
tion, and accounting information systems.

Yuanyuan Wu is an associate professor at the Business School of Jiangnan University

in China. She received both her master’s degree and PhD in historical geography from
Fudan University. She was a visiting scholar at King’s College London from 2014
to 2015. Her professional interests include cultural tourism, heritage marketing,
and business history. She has published more than 30 articles as well as 2 academic
books.

Jinwei Zhu is a professor and Deputy Dean at the Business School of Jiangnan
University in China. He received his master’s degree in economics from Fudan
University and his Doctor of Commerce and Management degree from Hitotsubashi
University in Japan. His professional interests include multinational company
management, cross-culture management, and entrepreneurship. He has published
40 articles and 3 academic books.
xx Contributing authors

Fiona Henderson is a senior lecturer in Academic Language and Learning (ALL) &
Coordinator of Academic Support and Development at Victoria University in
Australia. She was a co-researcher and author of VU’s national grant Improving
Language and Learning Support for Offshore Students in 2005. She received a Carrick
Citation in 2007, a Victoria University College Award in 2011, and a Victoria
University Award in 2012. She was a senior team member for the highly successful
Academic Literacy Project (funded by a VU Teaching and Learning Grant), which
was the pilot project for the national project Investigating the efficacy of culturally
specific academic literacy resources for Chinese students, for which she was the chief
investigator. She has led VU’s eight annual Teaching and Learning conferences with
Chinese partner institutions in China. Her PhD research investigated employability
skills from the perspective of Chinese employers. He was also Chief Investigator
for an OLT project on Academic Integrity. Her primary research interest is the aca-
demic success of international students. Her involvement in the development of the
resources for the Collaborating for Success website and English-for-Uni website
are indicative of this pursuit.
Development of China’s
state-controlled firms: The case of 1
the consumer electronics sector
H. Yanga, S.L. Morganb
a
Shandong Jianzhu University, Jinan, China; bUniversity of Nottingham, Ningbo, China

1.1 Introduction
China’s state-owned enterprises (SOEs) have experienced radical transformation dur-
ing the transition from a planned economy to a market-oriented economy over the past
three decades. At the end of 2009, 1604 large enterprises had become listed firms on
the Chinese stock exchanges of Shanghai or Shenzhen (Shanghai Stock Exchange,
2009; Shenzhen Stock Exchange, 2009). More than 70% of the listed firms are
state-controlled firms in which the state is the largest shareholder (China Securities
Daily, 2009). Although the state owns a majority of the stake, many of the state-
controlled firms have been given some market or market-like incentives (World
Bank Group, 2001). Such newly acquired autonomy and flexibility have motivated
the state-controlled firms to build resources and capabilities to compete.
Development of business strategy and appropriate form of ownership structure are
two of the major internal means to achieve the competitive advantage of the firms
(Child & Pleister, 2003; Filatotchev & Toms, 2003). Past empirical studies have
largely neglected the link between institutions, business strategy, ownership, and firm
performance in a transition economy such as China. Changes in these elements may
influence the degree of strategic fit between the choices of firms and their external
environment. An examination of the interaction between various internal and external
elements helps enrich our understanding of the processes that influence the growth of
the state-controlled firms in China during the transition period.
Our focus on only one industrial sector—the consumer electronics (CE) sector—
enables us to minimize the influence of industry and technology on the management
attitudes and organizational behavior of the firms. Different industrial sectors will dis-
play different characteristics regarding the adoption of market orientation since they
operate under different conditions and with varying degrees of government regula-
tions (Deng & Dart, 1999). The focus on one industry avoids conflicting conclusions
based on the aggregate discussion of various industries.
This study integrates exploitation–exploration framework with the institution
theory to propose a dynamic strategic fit of the firms in a transition environment.
The formation of a firm’s strategies is dependent on the environment in which the firm
operates. The matching of strategy and environment can obtain better performance—a
poor match can hurt performance (Miller, 1988). Business strategy is a necessary
but not sufficient condition for performance. Performance is also influenced by the

The Strategies of China’s Firms.

Copyright © 2015 H. Yang, S.L. Morgan Published by Elsevier Ltd. All rights reserved.
2 The Strategies of China’s Firms

ownership of the firms (Filatotchev & Toms, 2003). The appropriate ownership struc-
ture is seen as the means to better enable the managers to first strategically exploit
the internal resources of the firm, and second to position the firm to better explore
external resources, thus improving the performance of the firm (Jefferson & Su,
2006; Thomsen & Pedersen, 2000).
Here, the following questions are asked: How does the exploitation and exploration
construct apply in China’s state-controlled firms in the CE sector? How do the state-
controlled firms in China evolve their ownership structure? This chapter sets out to
investigate the development of China’s state-controlled firms using case studies of
firms in the CE sector; we focus on the evolution of firm business strategy and own-
ership structure, two aspects of a firm’s internal organization crucial for competitive
advantage. The study is organized as follows: First, the institutional situation in the
Chinese CE sector is provided. Second, the different ways of firms have developed
are described, followed by a description of the exploitation and exploration learning
strategy in transition economies. The fourth part deals with the efficiency of the state
ownership. Next, the research design is explained. The sixth part focuses on findings
on strategy and ownership evolution of the case study firms and includes a discussion.
The chapter concludes with a summary of theoretical implications and future research.

1.2 The institutional situation in the Chinese CEs sector

The CE sector in China has been one of the fastest-growing industrial sectors during
the past three decades. It has experienced many changes in production, market
composition, firm behavior, ownership structure, and level of government inter-
vention (Jiang, 2001). For this reason, the sector is broadly representative of the
manufacturing sectors at large in the process of economic transition.
The development of China’s firms in the CE sector has evolved through two broad
stages with a turning point in 1993 when China’s State Council issued its Decisions on
Some Problems in the Establishment of a Socialist Market Economic System. Since
the start of economic reforms in 1978, the government has sought to improve the man-
agement and performance of SOEs (www.China.org.cn, 07/11/2003). During the first
stage, the reform aimed to grant SOEs more autonomy by allowing SOE managers
increased authority over the allocation of their profits and decisions about production
(Naughton, 1995; Peng, 2004). Shanghai and Shenzhen stock exchanges opened in
1990 and 1991, respectively. At this stage, however, the state-owned distribution orga-
nizations were highly rigid and inefficient for manufacturers. For the CE sector, this
meant that the sales of products were centralized, and companies did not have their
own distribution outlets. Consequently, the firms were unable to respond to changing
customer needs promptly and flexibly (Simon, 1992). The increasing misfit between
the distribution system and consumer demand led some firms in the CE sector to adopt
corresponding business strategies to rectify the problems in the economic system.
The year 1993 was a watershed for the conversion of China’s SOEs because
central government initiatives spurred on a more supportive economic and social
Development of China’s state-controlled firms 3

environment that provided incentives for firms to engage in technological learning

(Xie & Wu, 2003). Both central and local governments became less directly involved
in commercial activities and further deregulation of production and circulation of
products. The control rights over state-controlled firms were gradually devolved from
the central government to local government. The decentralization of economic
authority triggered increased competition. Accordingly, the manufacturers had more
freedom and willingness to innovate according to market liberalization, competitive
pressure, and consumer demand (Jefferson & Su, 2006; Song & Yao, 2003). In addi-
tion, the government allowed international firms easier access to the Chinese market.
The entry of new firms—not only foreign-invested but ostensibly private-owned
firms—intensified competition in the CE sector (Jiang, 2001). Although the govern-
ment was deeply involved in bailing out large, failing state firms, such cases were
more the exception than the norm. Increasingly, only in extraordinary circumstances
do state firms obtain such support from the government (Jiang, 2001). Increased
market competition, globalization, and technological innovation have reshaped the
competitive landscape of the state-controlled firms (Tan, 2005).

1.3 Different ways of development of firms

The development of business strategy and the appropriate ownership structure are
major internal means to achieve the competitive advantage of the firms (Child &
Pleister, 2003; Filatotchev & Toms, 2003). According to debates on the development
of the firms, two schools of argument have come into being: the ownership school and
the management school (Qu, 2003). The “ownership school” argues that the form of
ownership—and especially its reform—is the key to the development of the firms.
State ownership is held to be intrinsically less effective than private ownership mostly
because politicians force state-controlled firms to pursue political goals or other social
objectives rather than profit maximization. Therefore, the key to reform is to diversify
state ownership in order to eliminate government control of the firms. Not so the view
of the “management school,” which emphasizes the need to improve the management
of the firms, such as the development of a market-oriented strategy without the
shackles of state demands (Liu & Garino, 2001). This school of thought does not
believe there is anything intrinsically inefficient about state ownership itself. Owner-
ship of the firm is an irrelevant concept if a firm is regarded as a Williamsonian nexus
of contracts (Fama, 1980). State-controlled firms are not different from those listed
firms in market economies that have wide spread public ownership, and a firm’s per-
formance depends on its management culture and the clarity of goals and objectives
(Chang & Singh, 1997; Wortzel & Wortzel, 1989). Therefore, according to manage-
ment school, the solution for the inefficiency of the state-controlled firms is to grant
the firms more managerial autonomy and adopt more commercially oriented business
strategies (Liu & Garino, 2001), which would positively influence future perfor-
mance. In this chapter, we investigate the ways or processes of development of
state-controlled firms by discussing business strategy and ownership, respectively,
and how these influence their performance.
Development of China’s state-controlled firms 15

government has placed more attention on the economic development of the firms.
Decentralization provided incentives to the managers of the firms. Managers inter-
viewed from S1 said that under local government ownership, the government would
be dependent on the performance of local firms for economic benefits (Interviews 5, 6,
and 18). The dependence of local government on the performance of S1 gave the firm
more bargaining power, which in turn provided incentives to the managers. The man-
agers of S1 have gained great autonomy despite the ultimate control of local govern-
ment. In this situation, the S1 does not subsume its profit motive under other
requirements such as employment and social welfare. Although state controlled, own-
ership and management were increasingly separated in practices, as seen in the
increased autonomy of decision making without recourse to government approval.
One of the independent directors of S1 (Interview 4) elaborates as follows:

The government now hardly intervenes in the business of the company. The board has
much more decision-making power nowadays. Although the most important decisions
require consultation with the state-authorized organizations… the local government
would accept the recommendation of the board as long as it thinks they are reason-
able and can improve the local economy.

In contrast, the state ownership in S2 has remained unchanged since its first listing
(S2 Annual Report, various years). Since 1998, the firm has been trapped into financial
trouble but has enjoyed significant preferential treatment from the government (Inter-
view 14). The government rescued S2 through an agreement instead of closing it down.
S2’s special status (aviation-defense electronics producer) and its large scale brought a
higher level of direct state–party control and a corresponding higher level of state share-
holding and reluctance to relax control over operations. State ownership has always
remained 54.2% since it was listed in 1996. For S2, the state’s need to guarantee its sur-
vival is greater than the need to guarantee returns on capital (Interviews 21 and 24).

1.7.3 The performance of the case firms

Table 1.3 indicates the domestic market share of each case, respectively. S1 had a
prominent share of its domestic market segment and was ranked among the top five
for market share from 1995 to 2007. S2’s market share dropped from 9.7% in 1995 to
5% in 2007 (Chinese Household Electronics Report, various years).

Table 1.3 The firms’ domestic market share, 1995–2007

Ranking by product
1995 (%) 2000 (%) 2003 (%) 2007 (%) market share (2007)

S1 2.94 10.91 11.11 16.23 1

S2 9.7 3.79 3 5 N/A

Source: Chinese Household Electronics Report (various years).

Another random document with
no related content on Scribd:
stay with it till it quits. If yu’ happen to wish to
speak to me about that pistol or bears, yu’
come around to Smith’s Palace—that’s the
boss hotel here, ain’t it?—and if yu’ don’t come
too late I’ll not be gone to bed. By this time of
night I’m liable to get sleepy. Tell your friends
good-bye for me, and be good to yourself. I’ve
appreciated your company.”
Mr. McLean entered Smith’s Palace, and,
engaging a room with two beds in it, did a
little delicate lying by means of the truth. “It’s
a lost boy—a runaway,” he told the clerk.
“He’ll not be extra clean, I expect, if he does come. Maybe he’ll give
me the slip, and I’ll have a job cut out to-morrow. I’ll thank yu’ to put
my money in your safe.”
The clerk placed himself at the disposal of
the secret service, and Lin walked up and
down, looking at the railroad photographs for
some ten minutes, when Master Billy peered
in from the street.
“Hello!” said Mr. McLean, casually, and
returned to a fine picture of Pike’s Peak.
Billy observed him for a space, and,
receiving no further attention, came stepping
along. “I’m not a-going back to Laramie,” he
stated, warningly.
“I wouldn’t,” said Lin. “It ain’t half the town
Denver is. Well, good-night. Sorry yu’ couldn’t call sooner—I’m dead
sleepy.”
“O-h!” Billy stood blank. “I wish I’d shook the darned old show.
Say, lemme black your boots in the morning?”
“Not sure my train don’t go too early.”
“I’m up! I’m up! I get around to all of ’em.”
“Where do yu’ sleep?”
“Sleeping with the engine-man now. Why can’t you put that on me
to-night?”
 “Goin’ up-stairs. This gentleman wouldn’t
let yu’ go up-stairs.”
But the earnestly petitioned clerk
consented, and Billy was the first to hasten
into the room. He stood rapturous while Lin
buckled the belt round his scanty stomach,
and ingeniously buttoned the suspenders
outside the accoutrement to retard its
immediate descent to earth.
“Did it ever kill a man?” asked Billy,
touching the six-shooter.
“No. It ’ain’t never
had to do that, but I
expect maybe it’s stopped some killin’ me.”
“Oh, leave me wear it just a minute! Do you
collect arrow-heads? I think they’re bully.
There’s the finest one you ever seen.” He
brought out the relic, tightly wrapped in
paper, several pieces. “I foun’ it myself,
camping with father. It was sticking in a crack
right on top of a rock, but nobody’d seen it till
I came along. Ain’t it fine?”
Mr. McLean pronounced it a gem.
“Father an’ me found a lot, an’ they made mother mad lying
around, an’ she throwed ’em out. She takes stuff from Kelley’s.”
“Who’s Kelley?”
“He keeps the drug-store at Laramie. Mother gets awful funny.
That’s how she was when I came home. For I told Mr. Perkins he
lied, an’ I ran then. An’ I knowed well enough she’d lick me when she
got through her spell—an’ father can’t stop her, an’ I—ah, I was sick
of it! She’s lamed me up twice beating me—an’ Perkins wanting me
to say ‘God bless my mother!’ a-getting up and a-going to bed—he’s a
flubdub! An’ so I cleared out. But I’d just as leaves said for God to
bless father—an’ you. I’ll do it now if you say it’s any sense.”
Mr. McLean sat down in a chair. “Don’t yu’ do it now,” said he.
“You wouldn’t like mother,” Billy continued. “You can keep that.”
He came to Lin and placed the arrow-head in his hands, standing
 beside him. “Do you
like birds’ eggs? I
collect them. I got
twenty-five kinds—
sage-hen, an’ blue
grouse, an’ willow-
grouse, an’ lots more
kinds harder—but I
couldn’t bring all them
from Laramie. I
brought the magpie’s,
though. D’you care to
see a magpie egg? Well,
you stay to-morrow an’ I’ll show you that an’ some other things I got
the engine-man lets me keep there, for there’s boys that would steal
an egg. An’ I could take you where we could fire that pistol. Bet you
don’t know what that is!”
He brought out a small tin box shaped like a thimble, in which
were things that rattled.
Mr. McLean gave it up.
“That’s kinni-kinnic seed. You can have that, for I got some more
with the engine-man.”
Lin received this
second token also, and
thanked the giver for it.
His first feeling had
been to prevent the
boy’s parting with his
treasures, but
something that came
not from the polish of
manners and
experience made him
know that he should
take them. Billy talked away, laying bare his little soul; the street boy
that was not quite come made place for the child that was not quite
gone, and unimportant words and confidences dropped from him
disjointed as he climbed to the knee of Mr. McLean, and
inadvertently took that cow-puncher for some sort of parent he had
not hitherto met. It lasted but a short while, however, for he went to
sleep in the middle of a sentence, with his head upon Lin’s breast.
The man held him perfectly still, because he had not the faintest
notion that Billy would be impossible to disturb. At length he spoke
to him, suggesting that bed might prove more comfortable; and,
finding how it was, rose and undressed the boy and laid him between
the sheets. The arms and legs seemed aware of the moves required of
them, and stirred conveniently; and directly the head was upon the
pillow the whole small frame burrowed down, without the opening of
an eye or a change in the breathing. Lin stood some time by the
bedside, with his eyes on the long, curling lashes and the curly hair.
Then he glanced craftily at the door of the room, and at himself in
the looking-glass. He stooped and kissed Billy on the forehead, and,
rising from that, gave himself a hangdog stare in the mirror, and
soon in his own bed was sleeping the sound sleep of health.
 V
Santa Claus Lin

He was faintly roused by the churchbells,

and lay still, lingering with his sleep, his eyes
closed and his thoughts unshaped. As he
became slowly aware of the morning, the
ringing and the light reached him, and he
waked wholly, and, still lying quiet,
considered the strange room filled with the
bells and the sun of the winter’s day. “Where
have I struck now?” he inquired; and as last
night returned abruptly upon his mind, he
raised himself on his arm.
There sat Responsibility in a chair, washed clean and dressed,
watching him.
“You’re awful late,” said Responsibility.
“But I weren’t a-going without telling you
good-bye.”
“Go?” exclaimed Lin. “Go where? Yu’ surely
ain’t leavin’ me to eat breakfast alone?” The
cow-puncher made his voice very plaintive.
Set Responsibility free after all his trouble to
catch him? This was more than he could do!
“I’ve got to go. If I’d thought you’d want for
me to stay—why, you said you was a-going by
the early train.”
“But the durned thing’s got away on me,”
said Lin, smiling sweetly from the bed.
“If I hadn’t a-promised them—”
 “Who?”
“Sidney Ellis and Pete Goode. Why, you know them; you grubbed
with them.”
“Shucks!”
“We’re a-going to have fun to-day.”
“Oh!”
“For it’s Christmas, an’ we’ve bought some
good cigars, an’ Pete says he’ll learn me sure.
O’ course I’ve smoked some, you know. But I’d
just as leaves stayed with you if I’d only
knowed sooner. I wish you lived here. Did you
smoke whole big cigars when you was
beginning?”
“Do yu’ like flapjacks and maple syrup?”
inquired the artful McLean. “That’s what I’m
figuring on inside twenty minutes.”
“Twenty minutes! If they’d wait—”
“See here, Bill. They’ve quit expectin’ yu’, don’t yu’ think? I’d ought
to waked, yu’ see, but I slep’ and slep’, and kep’ yu’ from meetin’ your
engagements, yu’ see—for you couldn’t go, of course. A man couldn’t
treat a man that way now, could he?”
“Course he couldn’t,” said Billy,
brightening.
“And they wouldn’t wait, yu’ see. They
wouldn’t fool away Christmas, that only comes
onced a year, kickin’ their heels, and sayin’
‘Where’s Billy?’ They’d say, ‘Bill has sure made
other arrangements, which he’ll explain to us
at his leesyure.’ And they’d skip with the
cigars.”
The advocate paused, effectively, and from
his bolster regarded Billy with a convincing
eye.
“That’s so,” said Billy.
“And where would yu’ be then, Bill? In the street, out of friends,
out of Christmas, and left both ways, no tobacker and no flapjacks.
Now, Bill, what do yu’ say to us puttin’ up a Christmas deal together?
Just you and me?”
“I’d like that,” said Billy. “Is it all day?”
“I was thinkin’ of all day,’ said Lin. “I’ll not
make yu’ do anything yu’d rather not.”
“Ah, they can smoke without me,” said Billy,
with sudden acrimony. “I’ll see ’em to-
morro’.”
“That’s yu’!” cried Mr. McLean. “Now, Bill,
you hustle down and tell them to keep a table
for us. I’ll get my clothes on and follow yu’.”
The boy went, and
Mr. McLean procured
hot water and dressed
himself, tying his scarf with great care.
“Wished I’d a clean shirt,” said he. “But I don’t
look very bad. Shavin’ yesterday afternoon
was a good move.” He picked up the arrow-
head and the kinni-kinnic, and was particular
to store them in his safest pocket. “I ain’t sure
whether you’re crazy or not,” said he to the
man in the looking-glass. “I ’ain’t never been
sure.” And he slammed the door and went
down-stairs.
He found young Bill on guard over a table for four, with all the
chairs tilted against it as a warning to strangers. No one sat at any
other table or came into the room, for it was late, and the place quite
emptied of breakfasters, and the several entertained waiters had
gathered behind Billy’s important-looking back. Lin provided a
thorough meal, and Billy pronounced the flannel cakes superior to
flapjacks, which were not upon the bill of fare.
“I’d like to see you often,” said he. “I’ll come and see you if you
don’t live too far.”
“That’s the trouble,” said the cow-puncher. “I do. Awful far.” He
stared out of the window.
“Well, I might come some time. I wish you’d write me a letter. Can
you write?”
 “What’s that? Can I write? Oh yes.”
“I can write, an’ I can read, too. I’ve been to
school in Sidney, Nebraska, an’ Magaw,
Kansas, an’ Salt Lake—that’s the finest town
except Denver.”
Billy fell into that cheerful strain of
comment which, unreplied to, yet goes on
content and self-sustaining, while Mr. McLean
gave amiable signs of assent, but chiefly
looked out of the window; and when the now
interested waiter said, respectfully, that he
desired to close the room, they went out to the
office, where the money was got out of the safe
and the bill paid.
The streets were full of the bright sun, and
seemingly at Denver’s gates stood the
mountains; an air crisp and pleasant wafted
from their peaks; no smoke hung among the
roofs, and the sky spread wide over the city
without a stain; it was holiday up among the
chimneys and tall buildings, and down among
the quiet ground-stories below as well; and
presently from their scattered pinnacles
through the town the bells broke out against
the jocund silence of the morning.
“Don’t you like music?” inquired Billy.
“Yes,” said Lin.
Ladies with their husbands and children were passing and
meeting, orderly yet gayer than if it were only Sunday, and the
salutations of Christmas came now and again to the cow-puncher’s
ears; but to-day, possessor of his own share in this, Lin looked at
every one with a sort of friendly challenge, and young Billy talked
along beside him.
“Don’t you think we could go in here?” Billy asked. A church door
was open, and the rich organ sounded through to the pavement.
“They’ve good music here, an’ they keep it up without much talking
between. I’ve been in lots of times.”
 They went in and sat
to hear the music.
Better than the organ,
it seemed to them, were
the harmonious voices
raised from somewhere
outside, like
unexpected visitants;
and the pair sat in their
back seat, too deep in
listening to the
processional hymn to
think of rising in decent imitation of those around them. The crystal
melody of the refrain especially reached their understandings, and
when for the fourth time “Shout the glad tidings, exultingly sing,”
pealed forth and ceased, both the delighted faces fell.
“Don’t you wish there was more?” Billy whispered.
“Wish there was a hundred verses,” answered Lin.
But canticles and responses followed, with so little talking between
them they were held spellbound, seldom thinking to rise or kneel.
Lin’s eyes roved over the church, dwelling upon the pillars in their
evergreen, the flowers and leafy wreaths, the texts of white and gold.
“‘Peace, good-will towards men,’” he read. “That’s so. Peace and
good-will. Yes, that’s so. I expect they got that somewheres in the
Bible. It’s awful good, and you’d never think of it yourself.”
There was a touch on his arm, and a woman
handed a book to him. “This is the hymn we
have now,” she whispered, gently; and Lin,
blushing scarlet, took it passively without a
word. He and Billy stood up and held the book
together, dutifully reading the words:
 “It came upon the midnight clear,
That glorious song of old,
From angels bending near the earth
To touch their harps of gold;
Peace on the earth—”

This tune was more beautiful than all, and Lin lost himself in it, until
he found Billy recalling him with a finger upon the words, the
concluding ones:

“And the whole world sent back the song

Which now the angels sing.”

The music rose and descended to its lovely and simple end; and, for a
second time in Denver, Lin brushed a hand across his eyes. He
turned his face from his neighbor, frowning crossly; and since the
heart has reasons which Reason does not know, he seemed to himself
a fool; but when the service was over and he came out, he repeated
again, “‘Peace and good-will.’ When I run on to the Bishop of
Wyoming I’ll tell him if he’ll preach on them words I’ll be there.”
“Couldn’t we shoot your pistol now?” asked Billy.
“Sure, boy. Ain’t yu’ hungry, though?”
“No. I wish we were away off up there. Don’t you?”
“The mountains? They look pretty—so white! A heap better ’n
houses. Why, we’ll go there! There’s trains to Golden. We’ll shoot
around among the foot-hills.”
To Golden they immediately went, and, after a meal there,
wandered in the open country until the cartridges were gone, the sun
was low, and Billy was walked off his young heels—a truth he learned
complete in one horrid moment and battled to
conceal.
“Lame!” he echoed, angrily. “I ain’t.”
“Shucks!” said Lin, after the next ten steps.
“You are, and both feet.”
“Tell you, there’s stones here, an’ I’m just a-
skipping them.”
Lin, briefly, took the
boy in his arms and
carried him to Golden.
“I’m played out
myself,” he said, sitting
in the hotel and looking lugubriously at Billy
on a bed. “And I ain’t fit to have charge of a
hog.” He came and put his hand on the boy’s
head.
“I’m not sick,” said the cripple. “I tell you
I’m bully. You wait an’ see me eat dinner.”
But Lin had hot water and cold water and
salt, and was an hour upon his knees bathing the hot feet. And then
Billy could not eat dinner.
There was a doctor in Golden; but in spite of his light prescription
and most reasonable observations, Mr. McLean passed a foolish
night of vigil, while Billy slept, quite well at first, and, as the hours
passed, better and better. In the morning he was entirely brisk,
though stiff.
“I couldn’t work quick to-day,” he said. “But I guess one day won’t
lose me my trade.”
“How d’ yu’ mean?” asked Lin.
“Why, I’ve got regulars, you know. Sidney Ellis an’ Pete Goode has
theirs, an’ we don’t cut each other. I’ve got Mr. Daniels an’ Mr. Fisher
an’ lots, an’ if you lived in Denver I’d shine your boots every day for
nothing. I wished you lived in Denver.”
“Shine my boots? Yu’ll never! And yu’ don’t black Daniels or
Fisher, or any of the outfit.”
 “Why, I’m doing first-rate,” said Billy,
surprised at the swearing into which Mr.
McLean now burst. “An’ I ain’t big enough to
get to make money at any other job.
“I want to see that
engine-man,” muttered
Lin. “I don’t like your
smokin’ friend.”
“Pete Goode? Why,
he’s awful smart. Don’t
you think he’s smart?”
“Smart’s nothin’,” observed Mr. McLean.
“Pete has learned me and Sidney a lot,”
pursued Billy, engagingly.
“I’ll bet he has!” growled the cow-puncher;
and again Billy was taken aback at his
language.

“‘This is Mister Billy Lusk’”

 It was not so simple, this case. To the
perturbed mind of Mr. McLean it grew less
simple during that day at Golden, while Billy
recovered, and talked, and ate his innocent
meals. The cow-puncher was far too wise to
think for a single moment of restoring the
runaway to his debauched and shiftless
parents. Possessed of some imagination, he
went through a scene in which he appeared at
the Lusk threshold with Billy and forgiveness,
and intruded upon a conjugal assault and
battery. “Shucks!” said he. “The kid would be
off again inside a week. And I don’t want him there, anyway.”
Denver, upon the following day, saw the little bootblack again at
his corner, with his trade not lost; but near him stood a tall, singular
man, with hazel eyes and a sulky expression. And citizens during that
week noticed, as a new sight in the streets, the tall man and the little
boy walking together. Sometimes they would be in shops. The boy
seemed as happy as possible, talking constantly, while the man
seldom said a word, and his face was serious.

Upon New Year’s Eve Governor Barker was

overtaken by Mr. McLean riding a horse up
Hill Street, Cheyenne.
“Hello!” said Barker, staring humorously
through his glasses. “Have a good drunk?”
“Changed my mind,” said Lin, grinning.
“Proves I’ve got one. Struck Christmas all
right, though.”
“Who’s your friend?” inquired his
Excellency.
“This is Mister Billy Lusk. Him and me have agreed that towns
ain’t nice to live in. If Judge Henry’s foreman and his wife won’t
board him at Sunk Creek—why, I’ll fix it somehow.”
The cow-puncher and his Responsibility rode on together towards
the open plain.
 “Suffering Moses!” remarked his
Excellency.

THE END
 TRANSCRIBER’S NOTES
1. Silently corrected obvious typographical errors and
variations in spelling.
2. Retained archaic, non-standard, and uncertain spellings
as printed.
*** END OF THE PROJECT GUTENBERG EBOOK A JOURNEY IN
SEARCH OF CHRISTMAS ***

Updated editions will replace the previous one—the old editions

will be renamed.

Creating the works from print editions not protected by U.S.

copyright law means that no one owns a United States copyright
in these works, so the Foundation (and you!) can copy and
distribute it in the United States without permission and without
paying copyright royalties. Special rules, set forth in the General
Terms of Use part of this license, apply to copying and
distributing Project Gutenberg™ electronic works to protect the
PROJECT GUTENBERG™ concept and trademark. Project
Gutenberg is a registered trademark, and may not be used if
you charge for an eBook, except by following the terms of the
trademark license, including paying royalties for use of the
Project Gutenberg trademark. If you do not charge anything for
copies of this eBook, complying with the trademark license is
very easy. You may use this eBook for nearly any purpose such
as creation of derivative works, reports, performances and
research. Project Gutenberg eBooks may be modified and
printed and given away—you may do practically ANYTHING in
the United States with eBooks not protected by U.S. copyright
law. Redistribution is subject to the trademark license, especially
commercial redistribution.

START: FULL LICENSE

THE FULL PROJECT GUTENBERG LICENSE
 PLEASE READ THIS BEFORE YOU DISTRIBUTE OR USE THIS WORK

To protect the Project Gutenberg™ mission of promoting the

free distribution of electronic works, by using or distributing this
work (or any other work associated in any way with the phrase
“Project Gutenberg”), you agree to comply with all the terms of
the Full Project Gutenberg™ License available with this file or
online at www.gutenberg.org/license.

Section 1. General Terms of Use and

Redistributing Project Gutenberg™
electronic works
1.A. By reading or using any part of this Project Gutenberg™
electronic work, you indicate that you have read, understand,
agree to and accept all the terms of this license and intellectual
property (trademark/copyright) agreement. If you do not agree to
abide by all the terms of this agreement, you must cease using
and return or destroy all copies of Project Gutenberg™
electronic works in your possession. If you paid a fee for
obtaining a copy of or access to a Project Gutenberg™
electronic work and you do not agree to be bound by the terms
of this agreement, you may obtain a refund from the person or
entity to whom you paid the fee as set forth in paragraph 1.E.8.

1.B. “Project Gutenberg” is a registered trademark. It may only

be used on or associated in any way with an electronic work by
people who agree to be bound by the terms of this agreement.
There are a few things that you can do with most Project
Gutenberg™ electronic works even without complying with the
full terms of this agreement. See paragraph 1.C below. There
are a lot of things you can do with Project Gutenberg™
electronic works if you follow the terms of this agreement and
help preserve free future access to Project Gutenberg™
electronic works. See paragraph 1.E below.
1.C. The Project Gutenberg Literary Archive Foundation (“the
Foundation” or PGLAF), owns a compilation copyright in the
collection of Project Gutenberg™ electronic works. Nearly all the
individual works in the collection are in the public domain in the
United States. If an individual work is unprotected by copyright
law in the United States and you are located in the United
States, we do not claim a right to prevent you from copying,
distributing, performing, displaying or creating derivative works
based on the work as long as all references to Project
Gutenberg are removed. Of course, we hope that you will
support the Project Gutenberg™ mission of promoting free
access to electronic works by freely sharing Project
Gutenberg™ works in compliance with the terms of this
agreement for keeping the Project Gutenberg™ name
associated with the work. You can easily comply with the terms
of this agreement by keeping this work in the same format with
its attached full Project Gutenberg™ License when you share it
without charge with others.

1.D. The copyright laws of the place where you are located also
govern what you can do with this work. Copyright laws in most
countries are in a constant state of change. If you are outside
the United States, check the laws of your country in addition to
the terms of this agreement before downloading, copying,
displaying, performing, distributing or creating derivative works
based on this work or any other Project Gutenberg™ work. The
Foundation makes no representations concerning the copyright
status of any work in any country other than the United States.

1.E. Unless you have removed all references to Project

Gutenberg:

1.E.1. The following sentence, with active links to, or other

immediate access to, the full Project Gutenberg™ License must
appear prominently whenever any copy of a Project
Gutenberg™ work (any work on which the phrase “Project
Gutenberg” appears, or with which the phrase “Project
Gutenberg” is associated) is accessed, displayed, performed,
viewed, copied or distributed:

This eBook is for the use of anyone anywhere in the United

States and most other parts of the world at no cost and with
almost no restrictions whatsoever. You may copy it, give it
away or re-use it under the terms of the Project Gutenberg
License included with this eBook or online at
www.gutenberg.org. If you are not located in the United
States, you will have to check the laws of the country where
you are located before using this eBook.

1.E.2. If an individual Project Gutenberg™ electronic work is

derived from texts not protected by U.S. copyright law (does not
contain a notice indicating that it is posted with permission of the
copyright holder), the work can be copied and distributed to
anyone in the United States without paying any fees or charges.
If you are redistributing or providing access to a work with the
phrase “Project Gutenberg” associated with or appearing on the
work, you must comply either with the requirements of
paragraphs 1.E.1 through 1.E.7 or obtain permission for the use
of the work and the Project Gutenberg™ trademark as set forth
in paragraphs 1.E.8 or 1.E.9.

1.E.3. If an individual Project Gutenberg™ electronic work is

posted with the permission of the copyright holder, your use and
distribution must comply with both paragraphs 1.E.1 through
1.E.7 and any additional terms imposed by the copyright holder.
Additional terms will be linked to the Project Gutenberg™
License for all works posted with the permission of the copyright
holder found at the beginning of this work.

1.E.4. Do not unlink or detach or remove the full Project

Gutenberg™ License terms from this work, or any files
containing a part of this work or any other work associated with
Project Gutenberg™.