Operators Monetary Incentive Reward Incentive And Control Of Alternative Relations

The reform of state-owned enterprises in China has been enforced for more than twenty years, but the problems are still very serious. The energy of enterprises has not emerged yet. These problems are incentives and restrictions to the manager, rather than system. If these problems have not been solved, any kind of systems can't solve the problem of state-owned enterprise's energy. The division of ownership and management is determined by the nature of state-owned enterprises. This division is common to many enterprises all over the world, especially to some big companies, not special in our enterprises. Therefore, the division doesn't reflect the system limitation of enterprises. The efficiency of enterprises is mainly decided by the construct of enterprise trust-agency, in other word, how the owners inspire the managers. In our state-owned enterprises, for a long time the incentives were spiritual, which meant to give successful managers honor and status. Then we find that these models failed. These facts tell us that spirit incentives are powerless when substance demands have not been met. So we more and more focus on the substance incentives. Then how does the owner of state-owned enterprises in China-the country inspire the managers? This is what the thesis is going to answer.The thesis is divided into six chapters.The first chapter focused on solving the problem why need to inspire. Only in the enterprises which the ownership and management have been divided, it requires to give incentives to the managers. Furthermore, only when it exists information asymmetry and moral risk of agent, the incentives are needed to the managers. The trust-agency theory made deep research on this question, and testify it by trust-agency model. This chapter based on the model, illustrating that shareholders can control the behavior of the managers by the coerce contract in the situation of information symmetry and incentives are useless, because the activity result of managers is foreseeable. But in the situation of information asymmetry the activityof managers is unforeseeable. What can be observed is the result of the activity, because the result is decided by the activity and nature state, the manager would attribute the result to the activity and make the shareholder believe the effort by manager as the result is good; on the other side, the manager would shift the obligation to nature state as the result is bad. Then the opportunism of managers is serious, named by 'moral risk'. Therefore, the effect of shareholder could be maximized only by incentive contract constructed for managers. In a standard trust-agency model, we take the function of shareholder and manager's effect as target function. However, on the side of managers, the sources of effect are different and the model doesn't do further research on the incentive result from different sources. This thesis extended the model from different effect source. The extension simply divided the manager effect into currency recompense effect and control effect. On one side, these two effects are different and produce different incentive result, especially to the agent; on the other side, these two effects can be substituted by each other. The division of effects is really important to do research on manager incentives of state-owned enterprises in our country.The second chapter did research on currency recompense incentives. We began from the contract of currency recompense. The different kind of contract made different effect on manager behavior. The thesis divided the contract into fix contract and changeable contract. The fix contract is the contract regulating that manager earn the same income regardless of the operate result better or worse. In our country, the managers in state-owned enterprises make this kind of contract. The changeable contract is the contract regulating the manager's income is fluctuant with the achievement. In our country, state-owned enterprises are trying to make a contract combine the income with the achievement. These contract...