Research On Partial Centralized Financial Control Of State-owned Enterprise Group

As a kind of important modern economic organization, Enterprise Group is the development product of market economy and socialized production, which reflects a country's compete strength on the world economic stage .under the country's support and promotion , through association, merger, holding, equity participation, etc, many large and medium-sized state-owned enterprises have become Enterprise Groups with certain size and strength. However, a number of Enterprise Groups ignore the financial control issues in the expansion, and have many problems such as weakening financial control, unsound financial control methods, and so on, which affect the operational efficiency and healthy development of enterprises. So it is urgent to do more research on the financial control issues of Enterprise Groups.Viewed against the backdrop of special Chinese national conditions on the scene of economic change, we choose the disposition of the financial control right, which is the core of financial control system, as the starting point, and do some research on the related financial control theory about state-owned Enterprise Groups. First of all, we point out that financial control of the Enterprise Group is the system, which is in certain circumstances, take parent enterprise as the control of the main, through a series of institutional arrangements, use specific procedures and methods, and is to coordinate various relationships in Enterprise Group correctly, to make production, operation, management specially decision-making reach the established goal. It is subordinate to the financial management areas, but has a relative independence .Then combined with the current situation of state-owned Enterprise Groups, we put forward the thought that partial centralized financial control of state-owned Enterprise Group at this stage, and give analysis demonstration from many aspects such as economic, culture, information technology. From the perspective of the game, the partial centralized financial control is the reflection that the government takes an active part in the corporate governance. Based on the contract theory, we expatiate that the partial centralized financial control is the realistic choice to deal with the contract failure of state-owned Enterprise Groups. Through the analysis of capital structure theory, we claim that the partial centralized financial control is the important way to control financial risk and to improve the efficiency of fund use in the circumstances that lack of capital relational-contingent mechanism. It is also the internal requirements of culture-building of state-owned Enterprise Groups during economic transition. We propose to establish a overall solution which take the strategic budget as the core, and other financial control such as cash flow control, appointment of Chief Financial Officer, financial information control as aids, to achieve Established financial goals. Finally, combined with cases, we analyze the specific application and efficiency of the partial centralized financial control used in the state-owned Enterprise Groups.