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Applying structuration theory to the benchmarking analysis
Case of China’s telecommunications market
Ping Gao
School of Environment and Development, Institute for Development Policy and Management (IDPM), University of Manchester, Manchester, UK, and

Applying structuration theory 253

Jing Hua Li
School of Management, Research Centre for Technological and Service Innovation, Zhejiang Gongshang University, Hangzhou, People’s Republic of China
Abstract
Purpose – The purpose of this paper is to explore how to use structuration theory as a benchmarking tool to analyze the formulation of a national strategy. Design/methodology/approach – The paper presents a longitudinal case study of the telecommunications industry of China. Findings – The case study demonstrates structuration theory is a useful tool for the benchmarking analysis. It is found that China’s telecommunications industry has transformed by stages and undergone several benchmarks. The specific social and technological elements of China have determined the formulation of its national telecommunications transformation strategy. Research limitations/implications – The paper extends benchmarking research to strategy formulation. It proposes structuration theory can be used in this aspect of benchmarking analysis. Practical implications – Implications for how to use structuration theory in the benchmarking analysis, especially that of national strategy formulation are given. Originality/value – For the first time in the literature, this paper applies structuration theory to benchmarking analysis. Keywords Benchmarking, China, Globalization, Strategic planning, Telecommunications Paper type Research paper

Introduction In planning product launches, monitoring performance, and measuring operational efficiencies, it is a commence practice that companies benchmark their performance versus industry competitors (Ahn and Dornbusch, 2004). Benchmarking is a discovery process and a learning experience. It is about developing insights and planning the future, which is conducted by number of stages (Ahokas and Kaivo-Oja, 2003). At present, benchmarking is widely used as a gauge of effectiveness across manufacturing, service, and healthcare industries, as well as non-profit organizations (Czarnecki, 1995; Kunstelj and Vintar, 2004; Magd and Curry, 2003). The development of strategy and action plans is extremely important because it will have substantial impact on the performance. However, despite its significant role, benchmarking research on strategy formulation seems yet to be seen. This paper attempts to add to

Benchmarking: An International Journal Vol. 17 No. 2, 2010 pp. 253-268 q Emerald Group Publishing Limited 1463-5771 DOI 10.1108/14635771011036339

Although recent progress has been made in the direction of expanding the scope of benchmarking to include systems and strategies. Now its subscriber numbers of mobile phone and fixed line rank the first in the world. Different from the literature that focus on the interaction between organizations as policy-makers. 2003). It is commonly accepted that for the Chinese telecommunications industry.g. . 1984). Moreover. Research context: China’s telecommunicatiions market As now globalization is becoming a prevailing topic. and why China has adopted such a strategy? There are many publications about China’s telecommunications industry. this paper investigates how the central government of China formulates its telecommunications transformation strategy. In an international perspective. It calls for more interaction between theory and practices (Kyro. this paper argues that the centralized administrative system allows the central government to comprehensively consider the strategy environment. governmental branches. But what a strategy has made China’s telecommunications sector achieve such a big success. As a result. Benchmarking has potentials in many directions. China presents an interesting case to study. the need exists more than ever for a system-wide organizational approach. Consequently. most current benchmarking studies are empirical ones without a theoretical basis. being the largest potential market for telecommunications services and because of its unique economic and political environment for telecommunications reform and development. Their enforcement is through a bargaining mechanism with strong political involvements. etc. This paper introduces structuration theory that effectively integrates the environmental factors into benchmarking activities within the process of strategy formulation (Prasnikar et al. China’s telecommunications industry achieves one the fastest developments in the globe scale.2 254 the benchmarking literature by analyzing the formulation of national strategy for telecommunications transformation in China. 1979. political reform progress (Zhang. the increasing dynamics of the business environment combined with the emergence of new technologies calls for the development of new methodologies and tools within the concept of benchmarking. e. In this paper. 2005). as this paper presents. there exist several institutions enacted by varied organizations. information technology and infrastructure in developing countries being non-ignorable forces of globalization has raised the interests of scholars. From the early 1980s. Different from the existing position that the negotiating mechanism of decision-making characterized by China’s political system has restricted the telecommunications reform. 2001).BIJ 17. China’s telecommunications industry has gone through a series of transformations.. the case of China demonstrates that structuration theory is an efficient tool for benchmarking the process of a national strategy formulation. This paper studies the Chinese telecommunications industry. which enables it to adopt a proper strategy that is to gradually carry out telecommunications transformations by balancing requirements from technology advance and restrictions from telecommunications development and economic. However. the above arguments are addressed by using the benchmarking method and drawing on structuration theory (Giddens. World Trade Organization (WTO).

Structuration theory Structuration theory defines the structure and agency as a duality. consolidation. Reregulation refers to the change in regulatory contents and patterns (e. The role of regulation is even more crucial in the market liberalization phase than it was before. and in institutional settings. this paper defines a national strategy for telecommunications reform as composed of three approaches: liberalization. Structure is the specific type of rules and resources or capacities recursively implicated in social reproduction. Consolidation is the opposite strategy to devolution. Also the institutional setting in regulation must change to adapt to market variation. competition does not necessarily result in deregulation at all stages of reform. Linked by modalities. and telephone (PTT)[1] systems in the developed world. The experience has indicated that a wide change in the degree and a large difference in patterns of regulation have been presented with time evolving (Collins and Murroni. Deregulation means reducing government’s intervention in market. For duality. etc. reregulation and restructuring.Theoretical background Defining telecommunications transformation strategy By examining the experiences of reforming the old post. The process that the duality of structure is reproduced over time and space is defined as structuration. telegraph. Liberalization means introducing competition into a monopolized market. deregulation. While deregulation is the main trend of telecommunications reform from long-term of view. 1997). the social structure and human interaction are both broken down into three dimensions (Figure 1). When people act in organizations Structure Signification Domination Legitimation Applying structuration theory 255 Modality Interpretive Scheme Agency Facility Norm Interaction Communication Power Sanction Source: Giddens (1984) Figure 1. Thus. devolution.). which are the knowledge and resources accessible to actors. The duality of structure and action . Orlikowski and Robey (1991) interpret it as: the structure of social systems is created by human action. 1984). Agents in their actions constantly produce and reproduce the social constructs. which both constrain and enable them. and human agency is the capacity to make a difference (Giddens. Noam and Kramer (1994) conclude a telecommunications reform strategy has four aspects: liberalization. Devolution is a policy of splitting the monopoly structure. and deregulation. and then shapes future action. 1979. asymmetric regulation. The restructuring includes devolution and consolidation.g.

or the opinion of what it should be. and time period in abscissa. The distance denotes the change scale in ordinate. modality. 1991). p. the researchers need to examine the unfolding process of structure. A structurational model should clarify key concepts of structuration theory like structure. Domination is the economic. as shown in Figure 2. which are the situations of technology advance. and technological ability to change or maintain a structure. Hence. Strategy formulation process Action Time 1 Time 2 Time 3 Time 4 . the signification is the meaning and characteristics of market structure. The structure and its formulation (action) constitute a duality: the structure characteristics affect the action. The strategy can be described by structure and action together. 256 Analytical framework This paper accommodates structuration theory to studying the formulation of China’s telecommunications reform strategy. actor. They thereby produce and reproduce structures of meanings which are termed structures of signification. and domination. macro economic and political environment. human agents sanction their actions by drawing on norms or standards of morality. In this case study. Secondly. and action (Walsham. Finally. From international experiences. reinforce or change structures of domination. The action is based on the interpretation on structure through modality. human communication involves the use of interpretive schemes which are stocks of knowledge that human actors draw upon in order to make sense of their own and others’ actions. Legitimation is the generally accepted form of structure. The analytical model of this paper is shown in Figure 3. 1993). To understand the structuration.BIJ 17. they create.2 through modalities. The structure has three dimensions of signification. which explains development and change by advancing a narrative that shows how it comes to be or is brought about (Holmes and Poole. legitimation. and international telecommunications reform. the Chinese telecommunication market is defined as the structure to be studied. political. 61) explains it: Firstly. telecommunications development. in so doing. Case study Methods Structuration research is process study. In the case of the Chinese telecommunications reform strategy. and in turn the structure can be modified through action which results in a new structure that is the basis of next step change. the modality can be divided to several elements. they create and recreate three fundamental elements of social interactions and structures. The actor designing and then realizing the special structure is the state government. As Walsham (1993. structuration research must include longitudinal Structure Figure 2. human agents utilize power in interaction by drawing on facilities such as the ability to allocate material and human resources. and thus maintain or modify social structures of legitimation. administrative.

Walsham. Results The Chinese telecommunications sector began to undergo major changes in the early 1980s by four stages. Except browsing the official newspapers of China and having regular e-mail and telephone communications with his previous colleagues who are still doing official consults to the Chinese telecommunications industry. China’s telecommunications reform strategy is summarized in Table I. In the languages of structuration theory. Data are collected from different ways. Case studies enable researchers to look at phenomenon in depth. this paper presents a longitudinal case study. in 1982 China opened the equipment sector. which is necessary to unearth the structuration process. 1998. which bounded the interests of foreign capitals with the Chinese market. he visited China at least one time per year to do field investigation. China preferred a strategy of introducing production lines by joined-venture or foreign independent investments to directly purchase from abroad. Up to 1994: liberalization and deregulation on equipment and VAS Owing to its backward manufacturing industry. 1993).Structure Agency Telecommunications market Applying structuration theory Telecommunications development situation Technology advance situation Modality Macro political and economic situation 257 International telecommunications reform situation Action by central government Figure 3. China’s telecommunications reform has been his following-up project. After 1998 when he moved to Europe. Thus. Consequently. Structuration framework of the Chinese telecommunications market studies (Sydow and Windeler. Another method is to use archival documents that preserve time ordering of events to reconstruct a historical account of the structuration of technology. The first author of this paper had been a senior analyst in the affiliated consulting institute of China’s Ministry of Posts and Telecommunications (MPT) for five years till the end of 1997. The third way is to conduct interviews so as to get the subjects’ point of view concerning what structures and structuring mean from their perspectives. He has kept a pragmatic network with the Chinese telecommunications industry which enabled him to reach update data. One option is field observation of structuration. some of .

Liberalization and reregulation and computer industries was accepted in the world. televisions. China constrained the reform not beyond the telecommunications Full competition with limitation on foreign capitals in a gradual way Restructuring. State support by preferential policy was used The development level of Monopoly in basic and mobile services and networks. Set a coordinating mechanism in regulatory regime. and socialism. Within a Multiple regulation system move of superficial macro reform the government got limited power to change telecommunications industry Advanced. Domestic telecommunications met demand non-private competition in VAS. state-wide networks Duopoly in mobile and basic were formed. all-round competition. unfair competition.BIJ 17. A user-push market. Technology Full competition in equipment. Monopoly was necessary to guarantee sovereignty. Execute liberalization and deregulation on equipment and VAS Introduce state-owned competitors to networks and basic services. A userpull market. Limited. A limited competition between stateowned firms as a test of future move was suitable for China Legitimation Action (strategy) Sustain monopoly in network and basic services. Competition crossing telecommunications. Liberalization and reregulation on PTT Restructuring on PTOs. Planned economy that rejected competition. Competition was acceptable for equipment and VAS Competition became a norm in international scope. Telecommunications reform was a restricted topic in China. advance required reform. the UK. Timetable of international liberalization was published Signification Poor economy and telecommunications basis. Monopoly . Joining WTO in near future was a political task regulatory regime. Deep macro reform services and networks. coherent regulatory regime. nation security. To further adjust the market so as to meet the in that Unicom was weak requirement of joining WTO has the highest priority. of national economy growth. The regulation government had the power to enact a deep reform on telecommunications Enforced. An unreasonable market liberalization. A non-neutral was underway.2 258 First stage Second stage Third stage Fourth stage Table I. and was practicing in global scale. Structure and reform strategy of China’s telecommunications industry Domination Natural monopoly was a deeprooted norm on the globe. China had to publish the timetable of full A neutral. Reform just began from the USA. As a WTO member. Unfair with the highest priority.

Currently. political and ideological perspectives.4 percent. Applying structuration theory 259 . For example. The State Council approved MPT to charge an installation fee from every subscriber that corresponded to the construction cost of one line. To promote China’s telecommunications to develop from a very poor basis. 1998).domestic-made equipment has dominated China’s network for its comparatively low price and competent quality (Ministry of Information Industry (MII). which was possible under the state monopoly system. 1999). the government had no power to reform telecommunications. In 1980. In the USA. China’s telecommunications network was extremely weak. currently service quality improvement and tariff reduction became the new focus. Meanwhile AT&T was allowed to enter into previously restricted markets like information services (Snow. 1999). In macro economic and political context. 1999). Telecommunications network was taken as an infrastructure and a basis of national economy. Therefore. 1999). reform on traditional socialism system and planned economy just began from non-dominant sectors. In 1994. competition was becoming a prevailing norm in international telecommunications world. 1995). European Commission. More than half of MPT’s investment was from these supports (MII. The telecommunications market shifted from a buyer’s pull to a seller’s push. Natural monopoly was still a general practice and legitimation in the world. the government granted preferential policies to telecommunications sector. 1988. 1999). the telephone penetration rate was only 0. and on basic telecommunications in the USA and the UK. In UK the market was fully liberalized in 1991 after a transition of duopoly in 1984 (Thatcher. New telecommunications services appeared from middle 1980s. For the liberalization on VAS in the global scale. From economic. the 1996 Telecommunications Act removed all remaining restrictions on the service scope of an operator and fully liberalized the American market (Baliga and Santalainen. they did not like foreigners to share their markets. Like in most other countries. the modification of final judgment mandated AT&T to divest itself of its local service sector before January 1984. in China value-added service (VAS) like paging without high network dependence was gradually opened to competition from the late 1980s. using foreign currency and paying tax. China opened equipment market earlier and more intensively than most developed countries. which was regrouped under seven regional holding companies. This situation just began to change from the USA and the UK. 1995). hence had to be under the absolute control of the state to guarantee national security and sovereignty. 1997). generally an encouraging conclusion could be derived (Council of Economic Advisers. 1999. Hence. VAS is a highly competitive market with thousands of operators (MII. Owning strong national manufacturing industries. it was the late 1980s when most EU members opened terminal equipment sales to countries that have agreements of equal market access with them (European Commission. which could be best realized through a competitive mechanism. MPT had a privilege in advancing depreciation. the telecommunications development level was already equivalent to the general growth level of the macro economy (Yang. In history the telecommunications network and services had been run under a monopoly in the global scope. In the USA. unlike earlier times when the overriding objective was the development speed. OECD. From 1994 to 1998: liberalization and reregulation on PTT system The preferential policy and the strong market demand promoted the Chinese telecommunications sector to enter to a new stage.

The appearance of internet raised the topic of national information highway in the world. the operating sector of MPT was changed from a functional department of MPT to an enterprise. Prevented by the reform progress at the macro level. policies. Unicom’s income was only less than 1 percent of China Telecom’s. The State Council was empowered to reform the telecommunications industry. etc. banking industries. 2001). which are characterized by forming a coherent regulatory regime with an independent regulator and introducing new operators. the market structure was transferred from monopoly supported by preferential policies to competition. On the one hand. Consequently. In macro aspect. but to perform a pilot test for future moves. the State Council reformed the PTT system. Meanwhile Ministry of Electronic Industry (MEI) with some other state institutions formed Unicom to compete with China Telecom all-around. MPT could not work fairly in executing regulation but might exercises bias toward its affiliation China Telecom. Some ministries jointly set up the Sino Satellite Communications and China Orient to compete with ChinaSat. More importantly. They had a great disparity in strength. it was not intended to fully change the current system designed for the planned economy.BIJ 17. To prevent political disorder. From 1998 to 2000: PTOs restructuring. China adopted an “act after trials” policy of transformation. The case was the same for the whole macro reform which was a superficial make-up. In 1994. But in China these changes were superficial. the State Council set up a Joint Conference on National Economic Informatization in 1994 to coordinate the regulatory function distributed among different institutions. It still had to negotiate and cooperate with other powerful governmental agencies that were in charge of China’s telecommunications industry (Zhang. and reregulation From late 1990s China’s telecommunications development entered a new phase marked by the forming of advanced. as a part of macro reform. etc. which was responsible for the formulation and implementation of plans. To meet the regulatory demand from market liberalization. 1999). further liberalization. China was initializing a state-wide governmental reform to separate enterprise management functions from government branches. cross-country networks (MII. At this time for the first move of reform. investment. China Telecom and Unicom were the only two comprehensive public operators. and administrative power to efficiently execute regulation. it was substituted by the National Information Infrastructure Steering Committee (NIISC). and regulations in information industry. But the efficiency was . Also market competition was the demand of technological innovation. In China the support of preferential policy of the state met strong challenge from society and other industries. personnel. financial means. the 1994s reform on PTT failed. Hence. In 1996. It was an unreasonable market situation in view of fair competition and should be improved. and Jitong that dedicated to internet. with telecommunications. At the outset these changes were just like most international practices of telecommunications reforms. and the MPT was not a “pure” regulatory authority either. Both owned by the state.2 260 Most developed countries were designing their reform plans. But the NIISC was only an interim organization without legislative status. China Telecom was not a real enterprise. Registered as China Telecom. China Telecom was still directly under MPT’s control without independent rights in finance. On the other hand it had not enough power to intervene in the domain of other ministries for example MEI that also participated in telecommunications market. which required the convergence of media.

and improve the competence of domestic operators in the forthcoming international competition. The paging sector of China Telecom whose turnover was five times of Unicom. A thorough reform on telecommunications industry was also a part of China’s plan of joining WTO as soon as possible. China Net. which had the highest priority in national strategy. competition was not only a common-accepted norm but also put into practices. the January 1. Applying structuration theory 261 . Consequently. and kept the name of China Telecom. China Net was formed in 1999 by some state institutions. and the mobile network of Great Wall as an army-run company were appropriated to Unicom (MII. This was the market prepared to meet for international competition. and took the name of China Net. China has formed a “national fleet” composed by seven “carriers”: China Telecom. As a result the MII was established based on MPT and MEI. The consolidation strategy was also applied to the satellite sector. Another reason for the new round of reform was that the fair competition has not come as expected. Unicom. in 1998 a new round of governmental reforms started. In China. China Mobile. Foreign companies are going to enter into China within recent years. China Net and Jitong. a tide of enterprise mergers crossing national boundaries and spanning industries like telecommunications. Now Unicom is the only comprehensive telecommunications company in that its network spreads the whole country (though not strong). Adapting to technology advance characterized by network convergence.low and service quality remained unsatisfactory. MII was a coherent regulator by taking over the regulatory functions of MPT. For which China agreed to allow 49 percent foreign ownership in mobile communications within five years of accession. In EU. computing and media emerged. and split mobile sector to form an independent body China Mobile. 1998 was the set deadline of full liberalization (European Commission. A deep reform was necessary to foster a fair competition market as required by joining WTO. Consequently. For market transformation. Jitong and China Railway Communications. 49 percent in international and domestic services within six years upon accession. The communist party of China with the supreme power in the country set it as a political task. 1999). and it has licenses to provide all kinds of services. ChinaSat. which resulted in deep changes in the governmental system. for which China believed it should re-arrange the market as preparations. China Telecom kept its fixed network and operations. China Telecom was broken into two parts by areas. NIISC. and 50 percent in VAS within two years. and the dedicated telecommunications network of the national railway sector was granted to enter into public telecommunications competition in 2000 by forming China Railway Communications. MEI. China Satellite. 1997)[2]. The northern part was composed by eleven northern provincial networks. Comparatively Unicom was still too weak to compete with China Telecom. etc. The southern part was other provincial networks. and China Orient were merged to a group China Satellite. In international aspect. the State Council set the principle as supporting the Unicom and protecting fair competition. MII was mandated with an exclusive power in administrating and regulating whole information industry. Sino Satellite Communications. After 2000: liberalization to foreign competition and restructuring of market The fourth stage of reform was promoted by that China was formally adopted as a member of WTO at the beginning of 2001.

information technology is simultaneously an objective set of rules and resources involved in mediating human action and hence contributing to the creation. Sydow and Windeler (1998) investigate the inter-organization network from the structuration perspective. Second. recreation. in China the competition has been among state-owned operators. further deregulation is needed to remove the entrance barriers to allow more dedicated networks to enter into public telecommunications market. telecommunications reform is major carried out through introducing new private competitors. Railway Communications is too weak to exist independently. A big firm has more power of influencing institutional environment of regulation enforcement (DiMaggio and Powell. On the other hand. The application of structuration theory in strategy formulation Structuration theory has been widely used in management studies to examine the change mechanism of social systems by taking these special social designs as structures. On the one hand. By now the reform on China’s telecommunications industry has gone through four stages and a full competition market is coming. China’s ideological and political system favours that the state economy should control telecommunications. and change all operators to comprehensive ones like Unicom. a “Telecommunications Law” is still missing. it is necessary to further deregulate the market. Third. and a limitation is set on foreign capitals to let the Chinese companies take dominant shares in future cooperation. Orlikowski and Robey (1991) define an information technology as a structure. for which China has a favourable cultural and political environment. An explanation may be that this is in the consideration that the existence of a dominant operator will jeopardize the fair competition. which is different from other countries where the transformation is enacted by laws. 1983). Last. This is the result of China’s “act after trials” method in macro reform on the entrenched planned economy which excludes the effects of laws. While the timetable of market opening to international capitals has been published. The restriction on services for current operators should be released. by services first and by areas later. The departure point of their work is to acknowledge the underlying duality of information technology. Hence. a devolution strategy was necessary. In China Public Telecommunications Operator (PTO) as the major reform target was split. Hence. a convergence of telecommunications and other industries should be promoted. In international experiences. Here.BIJ 17. Lyytinen .2 262 Discussion Characteristics of China’s telecommunications reform In China the telecommunications reform has been carried out by governmental orders through applying administrative measures. and transformation of these contexts. The competition across areas should be encouraged. Now China is still transforming towards a full competition. First. the restriction on domestic private capital should also be relaxed. information technology is the social product of subjective human action within specific contexts. the market should be restructured. are some significant examples. They assume that changing industry practices and forms of production organization are the medium and result of coevolutionary process of change. and use structuration theory to understand the relationship between information technology and organization.

like joining WTO. customers. drawing upon the concept of structuration that stresses the rule of continuous improvement. this should be a concept that helps in innovation rather than imitation. 1997). in this case study. these elements have different influence on explaining the structure. In this way the role of different institutes on strategy formulation can be better explained.g. Structuration theory dynamically connects different modality elements with strategy. global issues. and developing core competencies to effectively deal with these factors are critical. detect possible opportunities of revision. an extra institutional component can be added to modality (North. Benchmarking analysis requires observing what the best practices are and projecting what performance should be in the future. Action or strategy includes reregulation. Zhang. 2001). It assists political and business leaders in identifying practices that can be adapted to build winning plans and strategies. and using modality to explain the decision maker’s interpretation on structure and choice on strategy. telecommunications operators and equipment suppliers. benchmarking concept is understood to be an act of imitating or copying. one possibility of improvement on this paper is to incorporate other theories with structuration theory to provide a pluralistic account of strategies by different agents (Hung and Whittington. liberalization. Understanding external environmental factors such as competition. telecommunications reform has been a part of macro reform and national strategy of economy and politics. by incorporating institutional theory. 2003). Operational efficiencies are sought in Applying structuration theory 263 . as argued by Dattakumar and Jagadeesh (2003). As is summarized by Table II. For example. and restructuring. e. and complement new initiatives to achieve superior performance (Ahokas and Kaivo-Oja. This concept has been applied successfully to a lot of functional areas. can be answered clearly. In China. For future research. benchmarking tool has been further sharpened. It is extremely important for the decision makers to understand the current strategy. to combine railway communications with other operators. The researchers need to thoroughly understand and audit the organizational and environmental elements that determine the strategy formulation (Matthews.and Ngwenyama (1992) view the applications of computer supported cooperative work as a social structure embedding organizational knowledge. the macro reform progress and politic consideration is decisive for strategy choice. But. Underdown and Talluri. 1990. Of all. The application of structuration theory in benchmarking analysis Many authors have contributed to the literature on benchmarking. The modality is defined as composed by four elements. 2006). and the question why some obviously better schemes were not accepted. Specifically. 2003. describing the process of structure change as a strategy. 2002). Quite often. This paper adds to the literature and uses the structuration concept to analyze China’ telecommunications market transformation promoted by governments. and each element plays varied roles in different stages on formulating the strategy. and identify benchmarking areas that are critical to the sustainable success (Meybodi. for examples e-government and telecommunications (Kunstelj and Vintar. 2007). technology. Structuration theory is employed as the analytical tool in three aspects: defining market as a structure. 2004). Benchmarking offers a mechanism for the decision makers to proactively search for best practices and management strategies (Papaioannou.

A user-push market Advanced.BIJ 17. Fibre was used Internet. mobile network internet appeared Network convergence Network convergence . Introduce competition Full competition Full competition Strategy Liberalization. Liberalization. Liberalization Poor networks. User-pull market The development level of telecommunications met demand of national economy growth.2 264 First stage Second stage Third stage Fourth stage Table II. US. UK led reform Reform PTT. A leading sector in national economy Deep macro reform. Fast economic development Joining WTO Restructuring on PTOs. Fixing timetable of international liberalization Technology advance Telephone network. state-wide networks were formed. Fast economic development International environment VAS competition. Modality and strategy Telecommunications development Macro context Planned system. deregulation on VAS and equipment Reregulation on PTT. reregulation Restructuring. Poor economy Superficial macro reform.

2002). domination and legitimation. technological change. instead of mechanically following others. 2007). like telecommunications market in this paper. 2003). It can be used to scan the competitive environment and for benchmarking the development level. and greatly influenced by national policy like joining WTO. 1999). China has designed its strategy major based on its own situation. Moreover. The fit between critical competencies of the telecommunications industry and its environment defines its success (Rajaniemi. adjusting the transformation strategy to its competitive environment is one of the most important tasks of the government.. Structuration theory is potentially an important analytical tool in the strategic planning. or policy making in varied fields. As a conclusion. Also. In this paper. etc. For the case of the Chinese telecommunications industry. varied influence of different elements on transformation of structure. Magd and Curry. this paper demystifies structuration theory and uses it as the analytical basis for its strength in describing market transformation as a path dependent process. for which the structuration concept can play a role. most current studies investigate the influence of different institutes. to have a theoretical framework for benchmarking analysis on strategy formulation is one of the key issues Applying structuration theory 265 . 1992. In the globalization context where a full competition is the main trend. China’s telecommunications transformation has been a part of the macro reform that abides by an “act after trials” motto.customer needs. This paper demonstrates that the concept of modality of structuration theory is powerful in investigating environmental elements of a benchmarking process. the macro reform process and national policy play a determinant role. While in the earlier stages of benchmarking developments people stressed a process and activity orientation. structuration theory specifically proposes to evaluate the status of an innovation stage from three dimensions: signification. In the literature. competitive environment. Differently and as the first. Of all. (Bhutta and Huq. Generally. using and fostering innovation. Conclusion There are different ways to study market change. While previous studies have mainly focused on fact-finding and descriptions. 1999). recently the scope of benchmarking appears to have been expanded to include strategies (Yasin. A systematic approach to business improvement and best practice has been sought by benchmarking researchers and practioners (Camp. evaluating. benchmarking has been used in analysing how organisations seek to incorporate various knowledge management approaches into their business the paper (O’Dell et al. The concept of pluralistic components of modality can be generalized to studying other social systems. Hence. The proposed structuration model dynamically connects different elements of the modality with strategy formulation. and each element plays special roles in different stages. this paper focuses on the behaviour of the decision maker that designs the reform strategy. Benchmarking is an integral part of the planning and ongoing review process to ensure a focus on the external environment and to strengthen the use of factual information in developing plans. It is observed that varied modality elements have different influence on the reform strategy of China’s telecommunications industry. the paper by Guimaraes and Langley (1994) points out that benchmarking innovation involves developing a plan which includes dimensions of innovation success: seeking. structuration theory is useful in describing the dynamic.

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