Institutional innovation is an inevitable requirement for the development of private enterprises. The establishment of party organizations in private enterprises is an institutional innovation with Chinese characteristics. Combining party organization construction with enterprise system innovation effectively in private enterprises is not only the starting point for party organization construction, but also the effort point for party organization construction. It is also the foundation for the common development of party organizations and private enterprises. As a unique link in the framework of corporate governance, the party organization shoulders a series of important economic responsibilities such as caring about the production and operation of enterprises and promoting the healthy development of enterprises. So has party organization construction played an expected role? This question has always existed in the process of strengthening the construction of party organizations in private enterprises.
Therefore, based on the perspective of party organizations helping enterprises to increase their soft power and then to improve their vitality, this paper uses the survey data of Chinese private enterprises in 2012 to investigate the impact of party organization construction on the vitality of private enterprises, so as to respond to the above question to a certain extent. The study finds that party organization construction is conductive to improving the vitality of private enterprises. On average, compared with private enterprises without party organizations, the operating rate of private enterprises with party organization establishment increases by 3.2%, and the willingness of entrepreneurs to seize opportunities and develop rapidly in the future increases by 4.5%. In order to alleviate the endogeneity caused by selective bias, this paper adopts instrumental variables, propensity score matching, treatment effect and other methods for processing, so the conclusion is still robust. Further research shows that, compared with the entrepreneurs who hold negative and resistant attitudes towards the embedded enterprises of party organizations, holding a welcome attitude is more conducive to improving the vitality of enterprises by virtue of the governance advantages of party organizations; compared with other management modes, party organization construction under the territorial management mode is more conducive to improving the vitality of enterprises. The mechanism test shows that private enterprises can improve the vitality of enterprises through the promotion of soft power, such as leading enterprise culture through party organizations, uniting the masses of employees, maintaining enterprise harmony, and promoting enterprises to fulfill social responsibilities. The conclusion of the study not only responds to the social doubts about the role of party organization construction in private enterprises, but also provides new ideas for improving the survival conditions of enterprises and prolonging the survival time of enterprises.