Parent-subsidiary Corporation Management Control Research Of SG Group

SG Group is a state-owner enterprise that focuses on expressway, bridge and other transportation infrastructures' construction and management. It puts into practice of centralized or decentralized management mode of parent-subsidiary corporations and adopts simplistic control methods. Inter-province and inter-field developing strategy brings about a great advance in its scale and push it wins the bids of BOT projects of He-Nan, Si-Chuan provinces and Algeria important expressway in succession and fulfils its international development plan successfully. The scope of its business extends to the financial, real estate, project management consultation, building materials, petroleum chemicals, and information industry.SG Group faces a complicated and turbulent environment. Being one of the most important factors, expressway management reform of china has not been determined. Macro-economical has presented an overheated investment posture. Tighten money policy is increasing the fund cost and crippling the competitive competence of SG Group. On the country, SG Group is gainning broad prospects in middle and western china based on the outstanding brand name of expressway construction and management.From the inner environment viewpoint, rapid developing pace of SG Group reveals the un-coordination between parent-subsidiary corporation management and complicated organizational structure. SG Group has 27 subsidiaries that various each other in scope, business and developing strategy. In order to gain coordination and realize sustained, stable development, SG Group carrys out reconstruction of organization structure and parent-subsidiary corporation management control reform plans persistently.A complexing and phasing mode is a practical choice to SG Group. Based on investigation of the external and internal environment, specialists' interview, and questionnaire, the author drew the conclusion that the parent-subsidiary corporations management mode and the method has not met the need of the rapid development of SG Group. SG Group should change its management and control mode from excessive centralized and bureaucracy mode or extreme decentralization to the managed control mode based on the governance of subsidiaries. On the one hand, SG Group should persist the centralized management mode to the important subsidiaries and branches that be engaged in the expressway management. On the other hand, it should choose the managed control mode based on the governance of subsidiaries to the other subsidiaries and give them more and more rights to increase their enthusiasm and the response speed to the complicated environments. At the same time, it should select and use all kinds of flexible management methods to amplify parent-subsidiary corporation management control system.