Research On The Selection Mechanism For State-owned Enterprises' Manager

The State-Owned Enterprises (SOEs) play the foundational role in the political stability, the economic stability, and the social stability in China. The strength and the development of the SOEs determine the National economic development and security. China has carried out a series of system reform of the SOEs in the past three decades. Correspondingly, the vitality of the SOEs and the national strength has improved significantly. However, the structure obstacles to the smooth development of the SOEs also exist. Especially the problems with the selection of the manager operating the SOEs well can produce a direct effect on the efficiency of the SOEs' reformation and development.According to the theory of modern enterprises, enterprises are organized on a contract basis and they are also collaborations of individuals in reality. Enterprises' managers play the extremely important role in the collaboration. Correspondingly, the manager s' ability and enthusiasm can directly affect the development and profitability of the enterprises. The SOEs have undergone systems reforms in empowerment and profit dominance, contracting, and corporate governance structure, and the managers' initiative and enterprises performance have been significantly improved. However, the government is still in charge of selecting the managers of SOEs, which can result in government's intervention with the enterprises. As a result, the officials have become the actual controller. These provide no assistance to the managers to take their initiative and to the SOEs' smooth development. The study on the selection of the managers and the guarantee system of SOEs are made in this dissertation. The main contents and innovations are as follows:(1) Managers are defined to be the director running the enterprises by their professional knowledge and skills in this dissertation, on the comprehensive analysis of the theory on how the SOEs' managers are selected, the theory of property rights, the theory of leadership traits, and the theory of commission and agency. These innovations can enrich the mechanism on the selection of SOEs' managers.(2) The relationship between the managers' thumbprint and the enterprises' diversification strategy are discussed in this dissertation by making the empirical analysis. The study on the feasibility and mechanism that educational background, individual wealth and social reputation are considered to be the signal of managers' ability is conducted. A model of information discrimination on how to select the managers from the market is built in this dissertation. A utility function of reward contract on the selection of managers is given and analyzed in this dissertation. Moreover, the discussion on how the reputation mechanism to produce the incentive effects on the managers is made.(3) This dissertation makes a comparison and analysis of two main modes on how to configure the SOEs' managers, holding that the SOEs' managers must be selected in accordance with the rules of the markets, and that the SOEs' managers must be selected and appointed in the competition. Due to the SOEs' particularity, the government must play the positive function in this process. A proposal is put forward that the SOEs' managers should be chosen by the board of directors. The system of board of directors consisting of state directors, staff directors and external directors must be established. The board of directors should establish the committee choosing and assessing the SOEs' managers.(4) The selection of the SOEs' managers is brought forward and analyzed in this dissertation, with a view to providing a practical proof of selecting the SOEs' managers. In addition, a competency model of SOEs' managers is built, and the index system to evaluate the candidate's ability is designed in this dissertation. We propose that the SOEs' managers should be selected by using the method of non leading group discussions. The multi-attribute group decision method of selecting SOEs' managers is given according to the signal to show the managers' basic ability and special ability.(5) This dissertation has studied the safeguards system for the smooth operation of the selection mechanism on choosing SOEs' managers from the perspective of the adjustment in property rights, the managers' market mechanism, the managers' credit risk preventing and controlling. In order to find a fundamental solution to such problems as absence, dislocation and offside of various property rights existing in the enterprises for ages, recommendations are made on how to establish and improve the professional managers' market in this dissertation. For instance, taking such measures as the cancellation of the executive level and administrative appointment in SOEs; carrying out the system of qualifying examination and certification; implementing the market access system of qualified administrators. Besides, the suggestions on the prevention and control of the managers' credit risk in the SOEs are given, mainly including individual credit assessment system, the managers' credit information systems and credit co-operators systems and the corresponding punishment mechanism.