Research On Financial Strategy Of Core Enterprises Of Modularized Organization

With the development of world economy’s informatization, networking and globalization, and great breakthrough on science and technology, revolutionary changes are happening in the producing pattern, organization mode and industrial structure. Economic environment’s complexity and new economic rules’ emergence are forcing corporates to change their traditional value creation logics. Financial management has been through significant challenging. Facing these significant challenges, corporate financial theory needs revolution and development to embrace new economy, especially in a new mode of organization: modularized organization.Modularization is widely applied in product design, manufacture, and even in the organizational structure. Modularization has been an important contribution for contemporary technological and industrial organizational changes. Research on financial management of modularized organization is becoming an emerging field of corporate financial theory. Compared with other inter-firm organizations, there is a unique operating mechanism in modularized organization. It has been necessary and urgent for us to explore and discuss modularized organization’s financial strategy framework from financial perspective, and discover the progressing of the emerging financial theory.This dissertation mainly studies two questions: the first is value creation strategy of core corporates of modularized organization, and the second is adjustment for corporate financial strategy in the background of technology innovation. Based on modular organization view, it is more beneficial to get a higher systematic and typical angle for observation and research. This dissertation starts with studying on financial management’s economical and social environment to establish modularized organization’s networking platform financial strategy framework. In the background of modularized organization, we will focus on discussing its financial environmental changes and core corporates’ value creation logics, analyzing financial management activities varieties, and then exploring corporate financial strategies’ programming and selection.This dissertation mainly applies normative research method, which combines theoretical analysis and case analysis. Research methods are especially designed for the completion of the main problems of the study. Choices of the methods depend on the nature of the research questions. As corporates’ financial strategies and related financial environments are difficult to quantify, it is appropriate to adopt case analysis method. In this paper, we take standardized research methodology, which is theoretical analysis based. Meanwhile, we choose IBM and Intel’modular organization’s financial system as an example, which is a reference to the instance throughout the paper always. The logic of the paper is: changes in financial environment affecting the financial management→financial principles and hypothesis assumptions →further financial management objectives need to be adjusted based on the theoretical framework of the modular organization→ create an opening networking platform of financial strategy. Therefore, this paper mainly adopts standardized research methodology, theoretical analysis and case studies combined.The dissertation consists of eight parts. Charter lis Introduction, which states the research background, research questions, research objective and research roadmap. Charter 2is the literature review, which summarizes the research progress on the modular organization of academics. They describe modular organization of financial management issues, as well as the theoretical basis of this study the problems. Charter 3 presents as a case description and comes up with the main points through analyzing the cases of IBM and Intel. Case reference and analysis go throughout the paper always. Charter 4 analyzes the cases to explore changes in the financial management of the environment under the modular organization. There are characteristics of modular organization’s core corporate financial environment, modular organization product development and producing patterns, the enterprise organizational structure features, as well as the changes in the value creation logic. Charter 5 is modular organizational core enterprise financial management boundary change. This charter discusses the issue of financial liberation border. The pattern of modularity network production is different from the traditional producing pattern in terms of status of enterprise boundary and mode of financial strategy. In modularized organization, all kinds of modules are linked with a value net and the core enterprises can allocate resources across the enterprise through inter organizational governance and value transfer mechanism, which causes the change of traditional enterprise boundary and transform of financial strategy based on the new boundary. In the same time, the boundary of corporate finance should be changed. Charter 6 studies on opening financial strategy research. There is detailed analysis and discussion of the differences between opening and traditional closed-end financial strategy, the ways that select the most appropriate opening financial strategy, implementation and related support. This part deals with the core financial strategy characterized by a modular organization of enterprises, emerging capital allocation, financial strategy forward, and financial strategic planning and selection theoretical insights. Charter 7 deals with the research on modular organizational platform financial strategy. Platform financial strategy is a very important mode of open financial strategy. This part discusses the characters and operating principles of platform. Platform has the characters of asset attribute, semi-opening and multi-way of value realization. The process of value creating is mainly influenced by network externality and bilateral pricing principle. On this basis, the dissertation analyses the platform structure of modularization organization and strategic design. Since platform has the characters of asset and semi-opening, this part also studies the financial strategy to support technology leadership. Technology leader in financial strategy and its implementation is a modular financial research organization focused on solving problems. Charter 8 is conclusions and implications. This section summarizes the contents of the full paper.There are five main conclusions of this paper. First, the core functionality of modular organization is to create value. The modular organization company’s financial activities are strategic in nature. The producing pattern of providing tangible material and service-based is replaced by a new type of value creating pattern, which mainly depending on intangible resources, such as technology, information and knowledge, etc. Second, the content of the company’s financial strategy change with firm boundaries and be further enriched. In the network economy, the boundaries of property right, controlling, capability are away from each other. Physical boundary tangible resource decisions are being replaced by the ability to determine the boundaries of intangible resources. For the core corporates of modularized organization, financial management activities should be expanded to the boundaries of controlling, which are determined by the modularized organization. Third, the opening financial strategy is the financial foundation and prerequisite of Internet Economy. The modular organization has put forward new demands for allocating among corporate finance money, human resources, equipment, knowledge, information, technology and other elements of capital. Four, platform financial strategy is a very important mode of opening financial strategy. Platform is a kind of virtual assets, which needs to be established by a firm to invest different types of resources. Platform has the characters of asset attribute, semi-opening and multi-way of value realization. The efficient way of value creating for platform is to attract more other enterprises to utilize it and create value. Fifth, technology leadership strategy is pivotal for core enterprise to found platform. Technology leader in enterprise financial strategy is essentially the process of heterogeneous elements of capital allocation priority allocation of financial strategic technology capital. Implement of a strategy needs support from interaction of systematic factors. Financial strategy for technology leading is also the combination of the traditional financial strategy and emerging financial strategy.The significant contributions of this dissertation is to (1) apply the modularized producing pattern to financial management research; (2) further excavate the technology leadership financial strategy and theoretical advance, and then proposed the opening financial strategic vision; (3) present a platform financial proposition, which has significant expulsive force for finance research and development. Platform financial proposition is innovative and original. This paper extends the work of financial management and financial boundaries. There has been a useful attempt in the study of financial theory.