A Study On Efficiency Of Financial Rights Concentration Based On Contingency Management Theory

Financial governance mechanism is a hot issue. Company financial property rightas the focus of the interests of all parties, The allocation of company financial is of greatsignificance while it is the focus of the interests of all parties. And to solve the problemof the allocation is the core problem of company governance research. On the onehand,it is the foundation of the financial management system and makes each part in thesystem linked closely.On the other hand,we can study the whole financial theoreticalsystem through studying financial property.This article researched the efficiencyvariance of different concentration of financial rights in contingency theory ofmanagement. Its basic components include the following:Firstly,the article described the theoretical basis of the financial power allocation.Property rights theory emphasize on a clear definition of property rights, property rightsinclude the right to use, income and decision-making basically. The main content of theprincipal-agent theory is the client how to design a set of incentives to drive the agentfor the interests of the principal action theory. Corporate governance theory is that themain targetsof corporate governance are modern companies, its core content for thesupervision and encouragement. Stakeholder theory is that the enterprise is essentially aseries of contracts concluded by the stakeholders, The conclusion of this series ofcontracts stakeholders is the direct or indirect economic or non-economic interests ofthe relationship between the enterprise, and its behaviour and corporate behaviourinfluence each other individuals or groups.Secondly, the article offering the own insights about connotation of the financialrights on the basis of current research achievements.The property is the foundation offinancial rights, and the financial rights derived from property.Then it expounded thebasic theory of the financial power allocation. The configuration of the main financialpower, refers to the participation in the corporate property assigned main stakeholders.Due to the particularity of this study, financial power allocation works in theshareholder’s meeting, the board of directors, managers, board of supervisors andfinancial managers mainly. Financial rights includes the financial decision makingpower, the financial supervisory authority and financial performance rights. The featuresof financial power allocation are phase differences of corporate property configuration,dispersion symmetry of corporate financial power allocation, the state dependence configured by the corporate financial power allocation and hierarchy of corporatefinancial power allocation. Shared governance mechanisms of corporate finance meansto establish an effective institutional arrangement to make stakeholders have an equalopportunity to share in the corporate financial power. The corporate financial cameragovernance model means to establish an effective system to arrange the lossstakeholders to obtain financial control over to change the established pattern ofdistribution of benefits when business has crisis. The principles of financial powerallocation are legality, the unity of rights,responsibilities and interests, incompatiblepowers must be separated, giving priority to efficiency with due consideration tofairness, residual claims and control of symmetrical arrangements, combination ofcentralization and decentralization. Three factors to financial power allocation are scale,concentration of ownership and corporate lifecycle.Thirdly, it is the empirical part of the article. The article established three models totest six assumes through questionnaire, then got the conclusions. The concentration offinancial rights and firm performance correlated negatively when the scale was great;The concentration of financial rights and firm performance correlated positively whenthe scale was small;The concentration of financial rights and firm performancecorrelated positively when the option was focus;The concentration of financial rightsand firm performance correlated negatively when the option was scattered;Theconcentration of financial rights and firm performance correlated positively when thecorporation was growing; The concentration of financial rights and firm performancecorrelated negatively when the corporation was in maturity or recession.Lastly, the article proposed the countermeasures to optimize the financial powerallocation. In this part, it also elaborated the lack of the article.The innovations of the article are the following. On the one hand, the article useempirical research through questionnaire. On the other hand, the article usescontingency management theory to research the differences in the efficiency when thecompany in different environments, it makes the research more practical significance.