A Study On Enterprise Group Network Governance Based On Subsidiary Initiative

Since enterprise groups had been rised in industrial countries Europe and the United States in the early 20th century, as the size and strength expanded, they played more significant role in national economy. In recent years, China’s enterprise groups had also flourished with the development of national economy and become an important pillar of our national economy. However, the development of enterprise groups had faced a lot of practical problems which revealed the underlying governance issues. In addition, the degree of the perfection of corporate governance structure directly related to whether enterprise reform aiming at establishing a modern enterprise system would be successful in our country. What is the fundamental motivation of this study is the contradiction between the importance and the inefficiency of enterprise group governance.The complexity of the enterprise groups had determined that a single enterprise research achivement couldn’t be simply transplanted to illustrate the issues. At the same time, facing with the increasing complex and dynamic external environment, the role and status of subsidiary had changed, a subsidiary was no longer a simple business unit attached to the parent company, the enhanced initiative of subsidiary and the formation of its own competitive advantage had become an important source of the competitive advantage of enterprise group. Based on the corporate governance research achivements from predecessors and the network characteristics of parent-subsidiary enterprise group,this paper attempted to conduct a in-depth, systematic study on the governance of enterprise group from the perspective of subsidiary’s initiative and then put forward the corresponding theoretical framework.Therefore, the author believe that this research has important theoretical significance in riching the corporate governance theory and the network theory of enterprise group, broadening the research horizon of enterprise group governance. While the paper conducted an empirical study on Acer Group using the framework of network governance performance evaluation of enterprise groups,assessed the impact of network governance performance caused by subsidiary’s initiative, and put forward the network governance strategies of parent-subsidiary enterprise groups. The study provides decision-making reference for the development of parent-subsidiary enterprise groups in China.This artical applyed management, economics, sociology and other subjects of theories, used network analysis method and empirical analysis method,and carried out the following research work:1、Conducted a systematic study of the network of parent-subsidiary relationship and the subsidiary’s initiative. The essay also analysed the process of the internal evolution of network in parent-subsidiary enterprise groups and the specific relationship between them. It established the network driven model of parent-subsidiary relationship and discussed the network operating mechanisms from internal coordinating mechanisms and return mechanisms.Besides,the author elaborated the content of subsidiary’s initiative illustrated the generated motivative factors and the influenced factors in detail expecting to broaden the vision of network governance in enterprise group.2、Carried out a in-depth study of the governance model of enterprise group. Holding Anglo-American as the representative of the market-oriented group governance model, Japan on behalf of network-oriented group governance model and South Korea the family controlled group governance model,the paper analyzed the characteristics of evolutionary trends of enterprise groups governance models and proposed the perspective direction of enterprise group governance in China.3、Established enterprise group network governance system which was based on the subsidiary’s initiative. The paper indicated the goal and the boundary of corporate network governance based on enterprise network characteristics.It built a enterprise group network governance framework from the three aspects of the internal governance structure, internal governance mechanisms and external governance.Finally, the author conducted a case study on network governance of Fuxing Group.4、Studied the enterprise group’s performance evaluation system. In different research fields of corporate governance, there are kinds of board evaluations, as well as various corporate governance ratings from the consulting firms. But the network governance evaluation of enterprise groups had not been studied further and this paper have committed to finish it.The author selected the Acer Group, a typical business enterprise group, as a case to analyze the path of network development and the determinants. 5、Launched an empirical study on the subsidiary’s initiative and its impact on network governance performance. First, the essay made a series of assumptions according to the theoretical basis, and used factor analysis, path analysis and other methods to conduct a full verification of the hypothesis.6、Based on the theoretical analysis and empirical results of the study and subsidiary’s initiative,the author put forward specific governance strategies, including changes in the parent company,the role of subsidiaries in the enterprise network, strengthening the dynamic governance of a subsidiary company, enhancing the degree of subsidiary’s initiative and strengthening the internal network of horizontal linkages to enhance the network governance.