2.1 Introduction

This chapter includes the review of previous literatures that introduced general situations of the two kinds of companies: state-owned enterprises and private corporations, and put particular emphasis on two typical companies: BP and CNPC. These formal research achievements formed the theory foundation for this study and also offered plenty of great ideas and precise research directions.

2.2 State-Owned Enterprises

State-owned enterprises is a tool which can be used by government to involve and intervene in the economy, and one of a great number of policies taken by government on behalf of the public interest to solve emergence or potential problems caused by the invalid market (Yu and Huang, 2006). Enterprises are a special group of business organizations served for economic goals. State-owned enterprises are a particular case of business organizations. Behind the state-owned enterprises, people can usually see two kinds of forces: one power of them is non-economic, political or ideological; the other force is economic and utilitarian. In the real economy, there is no a clear distinction boundary between the two forces (Ramanadham, V.V., 1991). Under the interaction of these two forces, state-owned enterprises become the particular business groups of organizations that hold not only non-economic objective but also economic target at the same time.

On the internet, there is a good number of information about state-owned enterprises. To illustrate, the famous website: WIKIPEDIA affords some translations about state-owned enterprises. According to its views, the proper noun state-owned enterprise has no a strict definition, state-owned enterprises are groups of legal organizations that are set up by governments on behalf of their interest to join in commercial markets, supervisory officials of the kind of corporations are from the government and the character of state-owned enterprises cover from as a composition of government to a normal stockholder of stock companies (Wikipedia, 2010). Especially, the website mentions a particular point that in the People’s Republic of China all commercial corporations were set up and possessed of by Chinese Governments after 1949 (Wikipedia, 2010).