After Taiwan lifted martial law in 1987, the Legislative Yuan enacted the amendment of the Act of Privatization of Government-Owned Enterprises in 1991; the Taiwanese had the first direct presidential election in 1996; the Legislative Yuan passed the Telecom Three Laws¡XTelecommunications Act, Organizational Statute of the Directorate General of Telecommunications and Chunghwa Telecom Company Act. Chunghwa Telecom Company was set up accordingly. It was the first time in Taiwan to have the ruling party changed in 2000; Ministry of Transportation and Communication approved three private fixed network businesses involving telecommunication operation; the Legislative Yuan passed the amendment of the Article 35 of State-owned Enterprise Management Act requiring that one-fifth of board of directors shall be designated by unions. In the year of 2003, the Legislative Yuan passed the resolution that any business with 20% of state shares shall have one union representative on the board of directors. The Democratic Progressive Party won the second-time prudential election in 2004; in the following year, Chunghwa Telecom Company became a private business. The Taiwanese experienced the second regime change in 2008. Asian financial crisis of 1997, the scandals of Enron and WorldCom of 2001, and global financial tsunami of 2008 have caused society unrest and economic recession. Consequently, corporate governance has become the global focus. Due to the negative social effects caused by the CEOs responsible for the international financial tsunami, it is the best time to re-examine the relations among employees, businesses, and governments. Telecommunications industry is an important platform for social networks, it not only has the features of monopoly and oligopoly, but also highly involves in public service that affect the development of a country and people's lives. This study adopts case study (document analysis, participatory observation, and content analysis) and comparative research as the main research methods. Based on the perspectives of neo-institutionalism, social capital theory, and IDA, the case of privatization and corporatization of Chunghwa Telecom Company is chosen to explore and analyze the institutional change process from a government-run Directorate General of Telecommunications to a private business, as well as from industry monopoly to a free market that have embedded in economic freedom, open society and political democracy. The process has involved huge commercial interests, consumer rights, and telecommunication workers¡¦ working rights. Before and after the formation of the policy, how the Chunghwa Telecom Workers¡¦ Union , a stakeholder of the privatization policy, initiated and put its claim for "industrial democracy - participation in management" in practice within the interactive relations among labors, employer and government is the focus of this research.