Impelling And Binding Mechanisms For The Managers In The Reform Of Township Collective Enterprises

Under any form of enterprises, the existence of Principal-agent relationship will inevitably lead to the issue of establishing an incentive binding system, and in township collective enterprises there exists such a characteristic relationship between the owner and the manager, which once brought about surprisingly high growth in those enterprises. However, under the complete market circumstances, the property-rights structure of traditional township enterprises hinders their further development, and accordingly an effective incentive binding mechanism on operators of township enterprises has to be established urgently.Taking the systematic changes as the point of departure, the thesis applies modern economic theories and research methods of economics of contract and business and analyzes the changes of the relationship between business manager and owners of collective assets and township governments in the three stages of property-rights reform of township collective enterprises, the influence of systematic reform and functional changes of township governments on the position of business manager and structural reform of enterprises, and the features of human capital of the manager of township enterprises by putting the process of value changes of the human capital into the developing course of township collective enterprises and the evolutionary process of property-rights reform of the enterprises.The paper then goes on to propose some feasible means of establishing an incentive binding system of the manager of township enterprises as follows:1) Withdraw township collective assets from township enterprises in form of currency and transfer them to the manager and workers so as to make the manager own residual claim and control power over enterprises and thus to solve the problem of motivating business manager in a deeper sense;2) Settle the issue of choosing business manager, namely, establish an effective mechanism which may ensure that those most capable of management will take the place of manager. The selective managerial system can be made up of the internal selecting mechanism decided by the corporate governance and the external selecting mechanism decided by the market competition mechanism;3) Establish a stock-equity incentive binding mechanism of the manager of township collective enterprises.Together with theoretical analyses, the paper cites various cases, which originated from successful experience in the practice of systematic reform among township enterprises and therefore provide substantial support for the theoretical viewpoints and conclusion herein.In the end, the thesis, in accordance with the principle of uniting theories with practice, puts forward seven proposals on establishing an incentive binding mechanism on the manager of township enterprises, which may be of practical value and thought-provoking.