Causes Of Low Efficiency Of Chinese SOE's And Its Countermeasure

It is a fact that the Chinese state-owned enterprises(SOEs) is lack of efficiency comparing with other kinds of companies. And more seriously ,this situation become dramatically bad now. This paper has discussed the view of social practice and theory towards this problem, and has some comments on it. This problem is mainly caused by representative difficulty. To solve this problem is to find the source of representative, to spur and constrain the manager, to study the manner of un-transferable possession and supervision ,and supervise the enterprise itself.This paper has done further research of scientific assessment method on enterprise efficiency .Because the traditional assessing method can not reflect the factors affecting the operating proficiency accurately. And this is one reason for low efficiency. If we can consider the human resources, technology level, product brand strategy ,subjective assessment of the people both inside and outside the enterprise, fiscal factors ,and the relative level of the enterprise within the area and history when we assess the enterprise level we can get a more accurate result. Thus , a more scientific assessing method has been devised in this way.In addition to this, this paper has done research on the radical reason for the forming of low efficiency of state-owned enterprises. To study it from the point of participant, from the point of responsibility, authority and benefit of beneficial corpus and behavior corpus of state-owned enterprises, then got the payment function of behavior corpus in the games. At last this paper can find the reason for low efficiency of state-owned enterprises by analyzing the game model. There are many reasons for low efficiency, but the radical reason lies in the difference between the manager's utility and the shareholder's utility . The way to solve this problem has been fund, that is---to change the ratio of responsibility, authority and benefit of beneficial corpus and behavior corpus , then change the payment function variables, in this way ,the manager's utility can be optimized as well as improving the enterprises' efficiency.There are some relations between the reform of state-owned enterprises and their efficiency. And as the reform of state-owned enterprises has not been done completely, the board of directors can not represent the benefits of shareholders, thiswill cause insufficient supervision and incentive. The enterprise can win optimal benefits while the managers optimize their utility .As we know, managers play the most important role in the state-owned enterprises. If the managers have no efficiency ,the enterprise will be lack of efficiency. Hence, if we want to improve the efficiency of the enterprise ,we can improve the efficiency of the managers. If We choose the manager candidate through the market mechanism, the efficiency of the enterprise can be improved. In this paper this marketing mechanism has been analyzed by game method. The market can solve the problem of supervision of the managers to overcome the low efficiency caused by them.The scant of incentive of managers and employees is another reason for low efficiency. We can adopt option for managers, share for employees to solve this problem . This paper has attempted to find the theoretical reason for shareholders of employee and stock option for managers, it is feasible and some detail suggestions and awareness has been given.In this paper, the exemplification is researching on the incentive application case of stock option ,problems and analysis has been done, through doing the research on the practice of stock option system and on the relativity between stock option and enterprise efficiency, mainly paying attention to the efficiency of stock market .