The Study On The Management&Controlling Of Parent-subsidiary Corporation AVIC Xinhang Industry Company

The reform of state-owned enterprises in China getting gradually in-depth, China’smilitary industry is gradually making reform and restructuring, and the business also extendsto the civil domain gradually, so the military enterprises will usher in a new developmentopportunities and a bigger stage. Relying on its own technology, personnel and otheradvantages, part of the military enterprises quickly change into large enterprise groups forboth military and civilian business, and the group controlling will also gradually become thetask facing them after the transformation of the enterprise.AVIC Xinxiang Group in Henan province is an industrial enterprise group operating inboth military and civil fields. Under the guidance of the strategy from the headquarter ofAVIC, insisting on aviation industry as core business, applying military business to the civil,military and civil supporting each other,, taking the technical homologous development,coordinated development of the two industry. AVIC Xinxiang Group is undergoing a criticalstage of transformation of business and management. However, due to historical reasons, thegroup has some problems to be solved in the headquarters function orientation, organizationalstructure and the parent company control; and these problems have become obstacles toAVIC Xinxiang Group to realize the connotation development. To establish a scientificmanagement system is essential for AVIC Xinxiang Group to better cope with theincreasingly fierce market competition.This paper defines the connotation and content ofgroup control on the basis of the analysis of related research achievements at home andabroad. The core problem of group control include the positioning of headquarters functions,defining group controlling mode and the relationship between headquarter and the subsidizedcompany.In our opinion, AVIC Xinxiang Group should mainly performed strategic controllingmode with financial mode as auxiliary mode. Such a mode matches AVIC Xinxiang Group‘sbusiness technology and business characteristics and firm size. However, AVIC XinxiangGroup is stilling applying an operating controlling mode with do not meet the internal andexternal environment. The main problems include paying too much attention to the details of management and lack of strategic control, strategic position and role of human resources andfinancial management did not get to play, decentralization is not well done and moderncorporate governance structure is not complete. The group should strengthen the groupstrategic planning function and ability, strengthen the group human resources strategicplanning responsibility and ability, improve financial audit function strategy supportingfunction, lower specific operation authority and strengthen monitoring functions.