China has been a popular place for investment since it opened market in 1980¡¦s. Firms need to consider how to use inner and outer factors to gain competitiveness in this furious competition. This research is using a qualitative approach and case details were collected from firms which operate in China for years. This research aims to discover the relationship between firms¡¦ inner factors which are organizational capital types, strategic human capital management practices, and corporate entrepreneurship capability, and how they affect organizational competitiveness. Besides, this research also adds in the effect of institutional environment to find out how it influences those inner resources. Findings reveal that environmental factors are influencing firms¡¦ corporate entrepreneurship capability, but the effect is different in different industries and ownerships. For foreign investment, the effect is weak and negative; for local high-tech firms, the effect is strong and positive; for local service firms, the effect is huge and negative. Moreover, organizational capital types and strategic human capital management practices are influenced by institutional environment. Organizational capital is positively influencing corporate entrepreneurship and influencing selection of strategic human capital management practices, and even positively affecting organizational competitiveness. However, corporate entrepreneurship capability is influenced by organizational capital types and strategic human capital management practices and further affecting organizational competitive ability.