A Discussion On The Coordination Mechanism Of Business Organizations

In the past 150 years, the organizational form of enterprises has undergone tremendous changes and the changes are going on in an important manner. Since the beginning of the small and family-business in the 19th century with the continuous progress of the ways of transportation and communication and the development of domestic and overseas markets, sizeable enterprises arise which need the complementary innovations of management and finance as a support. On the other hand, these innovations facilitate the development of similar sizeable enterprises in other industries. Experiment and complementary innovations are the driving force for sustained changes of organizations.The arise of multi-department organizational form is a particularly important development.It is developed by DuPont Corporation, General Motors and Standard Oil Company at the earliest.This kind of organizational form balances the needs of decentralizing decision-making.In the situation of decentralizing decision-making, decision-making authority need to be deployed to people who grasp the local operation knowledge and who need for a common plan to obtain scale economy. With continuous development of such organizations form, enterprises found that they can organize many single-sector to be a composition department. Before the introduction of multi-sector organizational form, most enterprises are controlled by central sector or the organization is in the form of holding company where the role of central sector is only limited to the provision of financial support and registration of profit. Compared to centralizational enterprises, multi-sector enterprises have the advantage of decentralizing decision-making. Handlers have a better understanding of specific business than the central sector and they can be stimulated effectivly because of the responsibility for the performance. Compared with the centralized enterprises, multi-sector enterprises develop new business more easily without the need for excessive expansion of the central sector of senior managers.Compared with holding company, multi-sector enterprises adopt coherent stratage and initiate joint projects which aim to improve the overall competitiveness than the holding company much more.Implementation of multi-sectoral organization need to figure out how to organize business activities to be departments and resolve the specific issues of these forms of organization. Generally, the economic laws through departments and departments of combination are following: activities that need close coordination should be closely combined to facilitate such coordination; giving enough space for sector managers to react completely to performance incentive; department size should be small enough so that people who have control power can impose on the performance of departments.All these need a good coordination of various factors. In this paper, the main points of coordination are following: economic organizations or all organizations are an aggregation of complementarily, but in relation to efficiency, we believe that organizations need to introduce competition. Or we mean that competition and cooperation are complementary and so are enterprises and markets.