Vertical Integration, Business Diversification, and Firm Architecture: The Case of the China Egg Produce Company in Shanghai, 1923–1950
NING JENNIFER CHANG is an assistant research fellow at the Institute of Modern History, Academia Sinica, Taiwan. Contact information: Institute of Modern History, 76 Academia Sinica, Nankang, Taipei 11529, Taiwan, ROC. E-mail: njchang{at}gate.sinica.edu.tw.
This article is a case study of a Chinese indigenous firm in the refrigerated egg-packing industry during the interwar period. I argue that the China Egg Produce Company (CEPC) was quick to grasp Western management in terms of vertical integration and business diversification. In addition, this firm took advantage of embedded social relations and social networks to construct a strong "internal architecture." As a result, CEPC not only rivaled some six to eight British and American enterprises, but also took the lead in persuading them to form an international cartel during the 1930s. The data presented in this case study shows the surprising vitality and adaptability of Chinese businesses and suggests that China was in the process of developing a modern business system prior to the chaotic events of the late 1940s.