On Traditional Advantage Enterprises Turnaround

The large scale state-owned enterprises and state-owned stock assets, especially including iron and melt industrial enterprises, raw materials manufacturing industrial enterprises and extractive industrial enterprises, which were built up in the period of planned economic system, made enormous contribution for the development of national economy and form the important foundation of industrial system of our country.However, during the process of going through transition in economic system, the competition advantage that they once had is being lost constantly, but the modern advantage with required market economy has not been set up. In these enterprises, institution is incomplete, procedure is slow and organization is machinery .Their lack spontaneous ability and gradually become the important burden of economic development.And, compared with small and medium-sized state-owned enterprises, it is the most outstanding and centralized that the drawback and mark of the old system in the state-owned large scale enterprises, and the degree of difficulty of the reform is greater, too. During the process of going through the period of system transition, if the huge stock assets can not realize turnaround, the setting-up of the market economic system of our country and choice of the industrialized route, the micro foundation is not firm.Traditional advantage enterprises are large-scale state-owned enterprises which consumed resources and had certain advantage effectively under traditional planned economic system (including state holding enterprises).Looking from time, they were built up in traditional planned economy period mainly ("First Five-Year Plan" periodand " the strategic hinterland of China build " period especially), which had not stronger competitiveness until the initial stage 1990s; Looking from investors, they were mainly invested by the government, including central government and local government; Looking from organization form, most enterprises adopt traditional department layers of bureaucrat organization, which are rigidity still; Looking from industrial fields, it includes the enterprises of traditional industrial fields, such as metallurgy, Petroleum and Chemical industry, ordinary machine- building, textile, food, etc; Looking from to space distribution, they concentrate on being distributed in the Northeast and central and west regions and become important micro foundation and carrier of the old industrial base.whether an enterprise is a traditional advantage enterprise, it can be judged through standard of time, standard of main part of property right, standard of scope of the enterprise and standard of industrial fields.The choice of the industrialized route of backward areas in China and emergence of the traditional old industrial base, need to use a kind of brand-new train of thought and method, namely need to focus on the stock assets of these traditional advantage enterprises closely and appraise again, especially the fixed assets. According to the assets characteristic of enterprises, we should appraise, analyze and excavate the enterprises' development potentiality. Trough system turnaround, process reengineering, organization turnaround, industry turnaround and policies turnaround, we make them turnaround from traditional advantage to modern advantage, and from external competition advantage to endogenous competition advantage. We should make great efforts to stock assets, drive increment assets with stock assets, drive stock assets with increment assets. By this we hope they can make greater contributions to national economic growth, increase of social employment and the persons who are correlated with of the interests.The dissertation is divided into 10 chapters and its basic research frame is as follows:Chapter 1, Introduction. This chapter puts forward the selected title's background, research approach, basic supposes and research frame. Traditionaladvantage enterprises in China are important stock assets, and they have made enormous contribution for the economical growth of our country. However, during the process of economic system transition, the competition advantage they once had is being lost constantly, hence, they must obtain new life through enterprises turnaround.Chapter 2, Traditional advantage enterprise: Defining, forming and splitting. This chapter scientifically defies the special concept of traditional advantage enterprises, and analyzes its basic attribute and characteristic, then analyzes that traditional advantage enterprises' found and changes route in the view of history. The serious division has appeared in traditional advantage enterprises, which indicates that, in one hand, the changes of industry's environment are not fundamental factors that influent enterprise's performance; in another hand, researching traditional advantage enterprise turnaround have realistic feasibility.Chapter 3, Enterprises turnaround: Theory, reality and expanding. By theory survey, such as Marxism economics, industrial economics, institutional economics, histology, management studies, I propose that the simple enterprise process reengineering and X-reengineering can not solve the problems traditional advantage enterprises facing. And I propose that, during the process of going through transition in economic system, the way of rejuvenation of traditional advantage enterprises in China lies in, implement to it including system, procedure, organization, industty, policy turnaround.Chapter 4, Way of rejuvenation: Inducement, goal and route. The important external factors such as industry's environment, the changes of the economic system, challenge of the economic globalization ,etc, give traditional advantage enterprise external motive force to make the transition; Cultivation of enterprise's spontaneous ability and enhancement of the competitive capability are the inherent motive force to make the transition. Traditional advantage enterprises should follow the turnaround route: system turnaround -- process reengineering -- organization turnaround- industrial turnaround. During the period, it requires government share the costs and give aids to the traditional advantage enterprise.Chapter 5, system restrains and system turnaround. System turnaround is the issue that traditional advantage enterprises can not avoid. Different from, we cannot sell traditional advantage enterprises' property simply through transfer, lease, etc. in their property reengineer as we do in general enterprises'. This chapter discuses the assumption and route of pluralistic property right, and analyzes the theory and method of debt restrain. It also analyzes the possibility of human capital's replace and lock, and discusses theinter-dynamic system between traditional advantage enterprise's system innovation and technological innovation.Chapter 6, Function restraint and process turnaround. Enterprises' organization and process is analyzed from the view of enterprises operation. Regarding traditional advantage enterprises as an organization, we can effectively design and innovate their organization to make the process simply and high-effective according to the trade characteristic. The enterprises' internal and external process turnaround can reduce their operational cost and raise their operational efficiency.Chapter 7, " big enterprise disease "and organization. Judging from no matter the history or the reality, many of the traditional advantage enterprises in China appear obvious characters of "big enterprise disease". This chapter discusses the reason, symptom and counter-measure of the "big enterprise disease", and combines the process turnaround to put forward a important view of setting up the process type according to the trends of organizing changes.Chapter 8, Industry declining and industry turnaround. Facing the adverse effect brought by industry declining, traditional advantage enterprises in China should make great efforts to overcome the barrier of industry turnaround, and take the measure of industry's pluralism, industry upgrading and industry desolation etc. so as to keep dynamic consistency with industry's environment and foster its sustainable competition advantage progressively .Chapter 9, Cost share and government aid. Under the background of fact that the industry declines, offering aid to the traditional advantage enterprises which have difficulties in their operation during their turnaround is the successful experiment of the developed country. This chapter put forward different policysuggestion of how to aid the traditional advantage enterprises which have difficulties in their operation on the basis of drawing lessons from the foreign industry aid policy.Chapter 10, Basic conclusions and research prospect. This chapter explains the issue needing to be deeply researched continuously and the defect in the dissertation. I hope that the discussion in theory will be changed into realistic productivity and guide the reforms of traditional advantage enterprises in China better. Traditional advantage enterprises obtain new life cycle through turnaround, so they can make greater contribution to the growth of national economy, the optimization of the industrial structure and the choice of the new-types of industrialized road.