There are multiple determinants of organizational form and strategic decision of enterprises in China, but they are not reducible to purely economic variables, such as the pressures of technical environments or patterns of competition. Therefore, one must depart from technically oriented approaches by turning attention to the institutional environment, the socially constructed normative worlds where organizations exist. The Chinese state-owned enterprise groups are formed by the following forces: the predomination of policies, the incentives of the stock market, the opportunism of local government, and the imitation between enterprises. The environmental pressures shape organizations. Moreover, organizations in the same environment will become structurally similar-that is there exist the phenomenen of ”isomorphism.” This article describes four isomorphic mechanisms-competitive, coercive, mimetic, and normative-leading to this outcome and demonstrate that they are not necessary simply for competition and efficiency, but also for political power and institutional legitimacy, for social as well as economic fitness.