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This study suggests that formal organizational structure displays the configuration of organizational identity, and a strong state constrains organizations’ pursuit of distinctive identities. When the state pushed the Chinese Academy of Sciences (CAS) to start businesses in the 1980s, it stirred organizational identity conflict: “Are we a scientific or business organization?” When the state was more willing to support research in the 1990s, CAS managed to develop scientific identity into its central identity. CAS-owned enterprises without research and development (R&D) experienced greater risks of discontinuation because they failed to exhibit the sacred scientific identity. The positive effect of having no R&D on the likelihood of discontinuation was stronger for enterprises with high levels of profits because they exhibited a salient yet profane business identity, and for enterprises in an institute where an elite group of scientists (Academicians) was more senior because these scientists were highly committed to scientific identity.