Study On Enterprise Group Financial Control

With the continuous development of China’s market economy, globalization, large enterprise group plays a more and more important role in our social economy. But in the operation and development process enterprise groups faces many prominent practical problems, especially in the financial control. On two ways:On the one hand, China’s enterprise group financial control system is still not reasonable. The efficiency of financial control of the group to subsidiary companies is weak, for example, the defects of group’s governance structure restricts the efficiency of financial control, the improper permission assignment makes management out of control, lack of management integrity and corporate culture construction leads to inefficient controlling etc. On the other hand, China’s enterprise group financial control system pays little attention to maintaining and nurturing core competence and learning ability inadequate, and enterprise group are general lack of core competitiveness, does not have a sustainable competitive advantage. Therefore, the research about issues of enterprise group financial control has an important theoretical and practical significance.Firstly, This paper collates and summarizes the literature of enterprise group financial control, grasps the current situation, the advantages and disadvantages of the presence study, then analyzes, generalizes and integrates the enterprise contract theory, enterprise ability theory, contingency theory and internal control theory. On the basis of the literature summary and theory analysis, the paper analyzes the basic elements of group financial control. In the detailed analysis, along the "essence-target-way" logic thinking, first of all starting with the formation of enterprise groups, this dissertation explores the nature of the enterprise group in the perspective of contract theory and capability theory. The nature of group determines the nature of financial control, and the nature of financial control determines the objectives of financial control, and the objectives of financial control determines the mode of financial control. On the basis of the exploration of the group nature and financial control essential attribute, this dissertation reconstructs and expands basic elements of financial control, such as financial control body, the control object, control mode. Then, systematically and deeply analyzes the influencing factors of the group financial control performance and how to improve the financial control performance, from the basic elements of financial control, such as control body, control object, control mode, control environment.In the analysis process, this paper always with financial control performance as the main line puts the latest theory of modern enterprise related arguments by "polished" together to arrival a more unique conclusion. Then, taking the Wahaha Group and the Apollo Group as the main material, carries on the case analysis to entrepreneur ability structure and the financial control performance, in order to verify the conclusions of analysis of the control performance, and attempt to explore the relationship between entrepreneur ability structure and the financial control performance, and which abilities are indispensable in entrepreneur ability structure. And then the paper puts forward the hypothesis of main point in theory analysis, and takes parent and subsidiary companies as a sample, through a questionnaire survey to collect data, and empirically studies the influencing factors about financial control performance to verify the conclusions of hypothesis. Finally, according to the theoretical analysis and empirical conclusions, the paper studies the optimization of the financial control of enterprise group. This paper comprehensively use the method of theoretical research and empirical research to make research more systematic, in-depth, comprehensive and more scientific.On the basis of the absorbing and referencing on previous research results, the paper makes some innovations in the following areas:1、In the research content, based on the literature review, the paper analyzes, generalizes and integrates the enterprise contract theory, enterprise ability theory, contingency theory, internal control theory and related theory, and puts related research results of these advanced theories to merge into the group’s financial control which is the traditional research fields, trying to reconstruct and expand the group’s financial control theory. In the study of the internal control structure, by clarifying the relationship of internal control, management control and financial control, the paper constructs the system of internal control from the whole perspective of enterprise, and clears the financial control positioning in the overall control of system. In the research of control elements, the paper pioneers the enterprise capabilities into the analysis, makes up the defects which the previous studies ignore the ability elements. financial control object extended from material resources to intangible resources such as knowledge and ability; financial control mode including not only the standard control, but also non standard control for intangible resources; the goal of financial control going from the business and strategic objectives deep into the enterprises ability goals; the ability structure features of financial control body being further analyzed as a key element. In the research of control performance, the paper systematically and deeply analyzes the influencing factors of the group financial control performance and how to improve the financial control performance, from the basic elements of financial control, such as control body, control object, control mode, control environment. In the analysis, the performance of financial control always being used as the main line, the paper puts financial control mode, contractual relationship behind financial control behavior, the upper power structure of the enterprise and individual characteristics of control body together, analyzes the relationship between them, and arrivals a more unique conclusion. The paper refines the research frame of "control environment and control behavior control performance", which not only can provide theoretical guidance for the enterprise how to design and optimize financial control system, but also provide ideas, inspiration and theoretical basis for the diagnosis of enterprise group financial control. In the research of optimization control, this paper also attempts to construct the evaluation system of the enterprise group balanced score card based on the ability. These studies not only expand research vision and connotation of the financial control of enterprise group, and enrich the research literature of them, but also made a positive and useful exploration for deepening and systematizing system enterprise group financial control Theory.2、In research methods, The dissertation adopts the methods of combining standardized research with demonstration research, and breaks the existing method limit of mostly adopting the standardized analysis in the group financial control research, and makes the conclusions based on empirical research. The conclusion of the study is not only scientific, but also more persuasive. On the basis of the literature summary and theory analysis, thisdissertation summarizes the key variables affecting the group finance control performance, such as the parent company management ability, the parent company management integrity and moral values, the parent company of corporate culture, subsidiaries governance effective degree and so on, and refine the research hypothesis. And then the paper takes parent and subsidiary companies as a sample through a questionnaire survey to collect data, and uses statistical methods of correlation analysis, regression analysis to test the research hypotheses, which not only makes up the defect of previous scholars’research lack of empirical research on the influence factors of financial control performance of parent-subsidiary companies, also provides a strong empirical basis for subsequent study..3、In research conclusion, the paper’s theoretical analysis shows that:the control right of ability is one of the sources of enterprise power, enterprise behavior is power-oriented rather than efficiency-oriented, power is built upon the basis of dependency, a prerequisite for owner of ability to obtain control power is dependence of enterprise on ability, and the fierce market competition makes the enterprise to have a dependency on the capacity element. The case analysis shows that:insight ability, learning ability, strategic ability, management ability, the innovation ability and integrity, is the most important and indispensable for the entrepreneur’s ability and quality. In the entrepreneur ability structure, insight and learning ability is the fundamental and basic, if insight and learning ability is stronger, strategic ability, management ability and the innovation ability will be stronger. In the strategic ability, management ability and innovation ability, strategic ability is more critical and scarce. The empirical research shows that in the control environment including the ability of the parent managers, parent enterprise culture, the integrity of the parent managers and subsidiaries effective governance, the influence of parent company managers ability on control behavior and control performance is the strongest. Parent managers should continue to strengthen strategic, management ability, insight and learning ability and other abilities, exercise mental models,consciously make up and improve their own defects of ability, and maintain the balance of all abilities. Control environment (soft control) plays a partial mediating role in the financial control performance by control behavior (hard control); the impacts of control environment on the financial control performance of parent-subsidiary companies are stronger than control behavior. This conclusion is more practical significance for Chinese enterprise groups. At present our country is in the transition period, the system is still not perfect, to make up for the impact of the incomplete contracts on transaction efficiency, the groups need pay more attention to cultivation and construction of culture, reputation, integrity and ability, which can maintain and enhance the vitality of the group, core competence and sustainable competitive advantage. The more incomplete the system is, the more space enterprise culture, entrepreneur’s reputation and ability have to play.