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The purpose of this study is to explore the competitive source of Chinese firms in an industrial sector of complex product systems. It helps to reveal the organizational innovation developed by Chinese firms in coping with international competition and technological challenges.

The study uses a qualitative method of research. The evidences are mainly collected through interviews, field observation and document analysis.

A pattern of engineer-centered organization is the source of competitiveness of Nanrui (NR) Electric (NREC) in this study. The firm equips its front project teams, and now its overseas branches with developmental human resources and authorizes them the power of decision-making to leverage R&D projects. It is an emerging challenge to the traditional multi-national companies (MNC) pattern, and enables the Chinese firms to build their capabilities on context-based knowledge.

As a single-case study paper, there are limitations about the external validity of its argument. Through the in-depth discussion of the NREC case, this paper aims to generate some clues for future study in the relevant academic community, which can be a useful step to formal theorizing and modeling. That is why the authors develop the paper on a single case. As future directions of research, comparative studies covering more cases not only within the power system control and protection industry but also among different complex technology products industrial sectors are really needed.

For innovative firms from developing countries like China, they need to develop institutional arrangements to incentivize engineers in the frontline, which may help them to build competence upon successful interaction with customers. During the era of globalization, such a pattern may generate special competitiveness over giant multi-nationals or global production networks (GPNs).

The research provides an instructive case on the Chinese rise in industrial sectors of complex product systems. Its findings can not only provide enlightenment for industrial catch-up in developing countries through organizational innovation but also help to initiate a reconsideration of the traditional theorizing of MNC and GPN.

This paper aims to explore the relationship between the role of entrepreneurs and the innovation investment propensity of Chinese firms. This study is expected to enhance our understanding about the competence building of top management team for innovative development.

The analytical framework draws upon the recent theoretical progress about innovative firms, cognition and competence building of top managers. A horizontal data comparison and four longitudinal case studies of representative firms in the Chinese power equipment industry are implemented.

The cognitive backgrounds of top managers, which have a significant role in directing strategic resource allocation, are found to be influenced by institutional environments. Because the institutional environments which are under the Chinese transition impact different groups of firms in different ways, the relevant practices of these firms lead to dissimilar competence building of top managers.

This paper establishes a nexus of “institutional influence–cognition–resource allocation”. Such a nexus highlights the role of cognition of top managers in influencing the strategy-making of firms. So it helps in explaining the conditions for competence building in firms.