Top Managers’ Cognition,market Capacity And The Division Of Branches Market Area Of Horizontal Integration Enterprise.

After thirty years of Reform and Opening-up, the domestic market demand gradually be fully released. Economies of scale advantage has become the most important country competitive advantage, thus stimulates domestic enterprises to focus on core business while actively motivates cross-regional expansion, in order to maximize access to the integration benefits. In the process of cross-regional expansion, how to balance the scale economy and local response is a highlighted problem in front of horizontal integration enterprises. Based on the affirmatory overall domestic market area, how to further divide the market area of primary branch thus to rational distribute and manage the provincial regional markets has been the key to determine the value creation of horizontal integration enterprises.In this study, we make analysis and pectination of the relevant literature from the perspective of transaction cost theory and scale economy theory to reveal how does provincial regional market capacity influence horizontal integration enterprise branches market area, then explore the mechanism about how does top managers’ cognition affect horizontal integration enterprise branches market area, thus preliminary build the theory model of relations about top managers’ cognition, market capacity and horizontal integration enterprise branches market area. On this basis, we select the Guangdong Provincial Industrial Equipment Installation Co., Ltd. as a single case study object, and derive the research proposition of this article combining the enterprise’s actual situation and theoretical models, then get the main conclusions according to the discussion of the case study result: Firstly, in the economic transition period under the special situation of China’s market segmentation, provincial regional market capacity presents different characteristics, the larger the market capacity of provincial area is, the more inclined to intensive cultivation for horizontal integration enterprises, the more the number of branches, the smaller of one single branch market area; Secondly, the higher regional identity of one provincial area for top managers, the more inclined to intensive cultivation for horizontal integration enterprises, the more the number of branches, the smaller of one single branch market area; Thirdly, the more clear recognition of one provincial area for top managers, the more inclined to intensive cultivation for horizontal integration enterprises, the more the number of branches, the smaller of one single branch market area; Fourthly, top managers’ cognition regulates the relationship between market capacity and branches market area of horizontal Integration enterprises. In provincial regional markets where market capacity is large but the regional identity of top managers is very low, horizontal integration enterprises prefer to take extensive management that they found few branches whose market area is very big. In provincial regional markets where market capacity is large but the understanding degree of top managers is very low, horizontal integration enterprises prefer to take extensive management that they found few branches whose market area is very big. This study shows that the division of branches market area of horizontal integration enterprises not only influenced by the provincial regional market capacity, but also affected by top managers’ cognition, and top managers’ cognition can regulate the relationship between both front. This findings could help to explain the law implicit in different market area of branches in horizontal integration enterprises, and it also has important theoretical and practical significance to direct horizontal integration enterprises to make rational distribution of regional market so as to obtain economies of scale benefits.