Research On Firm Incentive Chain

Incentive problem is an essential problem of business management. Incentive mechanism is an institutional factor affecting firm performance. Under the drives and guides of existing incentive theories, China's firm incentive has obtained some improvements upon the past. But problems like efficiency in parts but inefficiency in whole, dissevered incentive units, and discontinuous conduction of incentive mechanism are still kept unsolved. Based on these, from the view of system think, this dissertation regards firm incentive mechanism as a holistically organic system, and makes innovative and exploring research on the internal structure and dynamic functions of incentive mechanism. The goal is to enrich and develop incentive theory through filling the absence of existing studies and recovering the true face of firm incentive mechanism. The main results are:1. Developing the concept of firm incentive chain, and explaining its theoretical values. The firm's nature of team production, the hierarchical characteristic of organizational structure, and the structurizing of product factors all together require and determine the firm incentive mechanism a structurized institution. Incentive chain is the basic structural form for incentive mechanism.2. Making studies on incentive chain based on system approach. Incentive chain is not only an accumulation of components, but also a structural organism constructed by the interrelations among the system components. Being a system, the incentive chain performs its characteristics and functions as a whole. The incentive chain performs its functions of incentive, value and conduction during it process of operation. The conductive process links up the benefits conduction, objectives conduction, pressures conduction and drives conduction, and forms a fate community for organization.3. Making dynamic study on incentive chain. Through the non-linear analysis and the reliability sensitive analysis, the crucial factors affecting the final state of incentive mechanism are identified. Based on the entropy think, a study on the dynamic evolutionary process of incentive chain is made, and a warning system is established for firm's incentive mechinisam.4. Making games analysis on incentive chain system. Based on firm's information structure, models are established to compare all concerned parties' expected utilities drawn from the chain decentralized contracting and the grand centralized contracting, thus to testify quantitatively that the chain structure being the optimal structure for frim's incentive mechanism. Based on characteristics of multi-dimensional games, the complex interrelations among optimal decisions made by different incentive levels are analyzed. Based on the firm's hierarchical production model, the incentive interrelations within an organizational hierarchy are studied, and a modelized incentive solution to all levels within the hierarchy is developed.5. Making case study on the first two stock options incentive plans in Sichuan Province. A mapping analysis on structure and functions is made between the incentive chain theory and the practical incentive mechanism from the view of institutional logic and conductive mechanism. Results drawn from the case study empirically support the innovative theory of incentive chain.This research develops the pioneer concept of incentive chain, and studys the firm incentive mechiniasm as an organic system. Focusing on structural study and dynamic study of incentive mechanism, this research has definite differentiations from the past incentive studies. This research changes the contents of incentive study from parts to a whole, and decvelops the approach from static to dynamic. The in-depth studies on the base of concept of incentive chain have constructed a basic theoretical framework for incentive chain research, which is academic innovative. The combination of management approach and economics approach into the system approach satisfies the the feature of cross-development of the modern sciences. The system approach is an innovative approach to incentive studies. The nature of continuousness of incentive chain reflects and matches with the continuous operation and growth of businesses. The think of incentive chain has directive significance for firm incentive practice.