Study Of Incentive And Restraint Mechanisms For China's Corporate Governance Operators

One important characteristic of modern enterprise system is that the property rights and the operating right are separated, the enterprise owner entrusts the corporate to the manager who has the specialized knowledge in business in order to maximize the profit, however the manager participates in the management for the salary maximization, so their goals are not to be accommodating, which resulted in low enthusiasm and other problems like manager corruption, in order to solve these problem we have to set up a series of motivation and supervision system to motivate and lead managers, so they are willing to work for the corporate owner, what is more to combine the manager's salary with the enterprise's achievement, the manager will realize their own optimum income when they work for optimizing profit.This article analyze the corporate governance status in light of the existing academic achievement, and after analysis the problems of China's enterprises, especially state-owned enterprise managers incentive and restraint mechanisms. Analysis main motivating methods are compared in the paper we design our own motivating system based on the manager's needs theory in the hoping of more profits.This paper is divided into five chapters.In the First chapter we introduce the research background and the research goals of this paper; we review internal and external motivating theory and clear the research methods and the clues.In the second part introduce briefly basic theories of corporate governance and the status quo of China's corporate governance. We firstly review correlative literature of this subject. Based on this,we summarize the traditional incentive and constrained mechanisms of entrepreneur , respectively analyze the function Principle of each one and the correlation of them .For one thing,we consent that there are complementary or substitute relations among them: for another thing,we put forward our own standpoint:In the third chapter we introduced the incentive and restrictive mechanisms. We detailed the definition, function problem and the conditions of annual wage system, Stock option and spirit motivation. The main body of this chapter focuses on studying the forms and their contents of various incentives and constraints,including the yearly salary system,fringe benefits,stock incentive,stock options incentive,and spiritual incentive. The analysis and research on this chapter include concept defining,function introduction,origin seeking,and applications of the various forms in China; and the problems to be solved in practice and the external environment to be improved and the measures to be taken. In the fourth chapter we introduce our corporate governance manager's incentive and restraint mechanisms status. Introduce the principle of incentive and Influencing Factors. We also introduce existing incentive for the advantages and disadvantages. About constraint mechanism, we elaborated the restraint mechanism. First we analyze the internal restraint system, including the board of directors, the independent trustee system and the supervisor system, then narrated accountant and the audit, the capital market and the outside supervision mechanism.In the fifth chapter, we analyze of construction and perfecting the incentive and restrictive mechanisms with a view to explore a more reasonable and effective model. This chapter attempts to analyze the needs and motivation of the managers of our enterprises and discuss the founding of the incentive mechanism in enterprises, based on the related theories both at home and abroad as well as the analysis of a number of problems existing in the enterprises which include the present incentive mechanism in most private enterprises characterized by the insufficient manifestation of annual salary system and profit sharing system; the relationship between interior incentive mechanism of private enterprises and its efficiency, that is, the incentive mechanism is always in line with its demands in its initiatory period when it is in a small scale while the mechanism cannot fit it when the enterprise develops into a high level characterized by large scale and diversification, especially the efficiency in attaining and making use of talents in shortage; and also the ignorance of long-term and integrative motivation while attaching importance to short-term motivation, the ignorance of institutionalization of motivation while paying attention to its flexibility, the ignorance of spiritual motivation while laying emphasis on material motivation as well as the lack of transparency in incentive mechanism. Finally, we presented the conclusions of this paper.