On The Core Competence Of China’s Private Universities With The Establishment Of Dynamic Equity Incentive System

The subjects running Chinese higher education are increasingly becoming diverse.As an important part of higher education, private universities have their distinct systemsuperiority. However, starting at a late stage and a low point, they are stilling facing ahuge gap with public higher educational institutes in school running strength, fundguarantee, social reputation and influence, and the gap may be wider when comparedwith the remarkable achievements and social status of the foreign private schools.Under this big context of rapid economic development, robust science and technologyprogress and globalization, Chinese higher education has been confronted with manychallenges and opportunities in keeping in line with world education. It is really astrategic issue related to the sustainable education of Chinese higher education whetherChinese higher education, especially private universities can seize the historicalopportunity to make a rational positioning, identify a suitable administration structureand running mode, and constantly improve core competitiveness in this increasinglyfierce competitive environment.Based on current research results, the thesis makes an introduction of the definition,attribute and characteristics of the private universities, and looks back on theirdevelopment course, development modes and motivations, and makes a summary ofthe theoretic source and research results of their core competitiveness and dynamicshareholding system. It makes an analysis on their competitive situations by means ofthe five-force and SWOT models，uses Delphi method to induce the key indicators,core elements and influence factors of private high schools· core competitiveness, andexplains the necessity and applicability to improve their core competitiveness byintroducing dynamic shareholding system. By setting mathematical models andproblem-solving analysis, it systematically researches the theoretic basis andmechanism of promotion and action of the dynamic shareholding system in improvingthe core competitiveness of the private universities, in an attempt to bring a new modeand thought for their healthy and sustainable development. The research adopts dataenvelopment approach and by a large quantity of investigation and data empiricalanalysis, it proves that introducing dynamic shareholding system is an effective methodto improve the core competitiveness of private universities, and reaches the followingconclusions: 1. Private universities are the combination of universities and enterprises, aimingto create social benefits and seeking economic profits. This type has the naturalcharacteristics of private capital, private control and private ownership; and suchnatural attributes of as public interest, enterprise-like attribute, academic andadministrative attributes. Private universities have the virtual profitability and highenterprise-like attribute.2.Since1980s when this type was established, it has gone through three stages--revival and breeding, rapid development and standard development, taking on fivedifferent development modes--rolling-type development mode, injection-typedevelopment mode and state-owned college transformation mode, educationshareholding system mode and chain operation mode. In its development course, thedeepening of economic system reform has provided new opportunities for thedevelopment of private universities. While its development is the direct result of theincreasing demands, and is also the inevitable requirement for higher education reformin our country.3. By using five-force model and SWOT model to analysis the current competitivesituation private universities are facing, the thesis holds that private universities areadvancing in an important strategic adjustment period, concurrent with opportunitiesand challenges. For the change of outside environment, they can do nothing but toappeal and offer suggestions. Anyway, considering the long process of the change inoutside environment, it can be a better way for them to make analysis on their internalinfluence factors and find out development solutions from a strategic perspective.Private universities shall make full use of their own advantages; strive to enhance theircore competitiveness to keep them invincible in the increasingly fierce competitiveness.4. The core competitiveness of the private universities means the abilities of theprivate universities continually acquire, integrate and high efficiently utilize teachingresources and make effective feedback for the change of environment. The thesis usesDelphi to screen out key indicators from their evaluation indicators, and by makingfurther analysis on their decisive factors, it summarizes four core indicatorsmanagement system, school-enterprise cooperation, faculty system construction andstudent education. Among management system design and faculty system constructionare the priorities, while the key factors upon these two elements are legal person controlstructure and HR management of the schools, which are also the key factors upon thecore competitiveness of the private universities. 5. The private system of the private universities itself is part of the corecompetitiveness. Their role definition requires using knowledge as a key resource inthe process of improving their core competitiveness, which relies on faulty constructionand an efficient HR management. Dynamic shareholding system is an effectivemotivation sharing mechanism for enterprises with most of the focus on HR capital,and it motivates and restrains the key personμ to the largest degree by continuallyimproving HR, labor and distribution systems. That private universities highly rely ona powerful faculty is essentially corresponded to key personμ motivation mechanismof the enterprises. Therefore, dynamic shareholding system is also applicable toimproving the core competitiveness of the private universities.6. Principal-agent theory reveals an essential relation in the course of developmentof private universities.Construing keypersonsμof theschools as the agentμconformsto their realities. To improve the core competitiveness of the private universities andpromote their sustainable development, it shall build a mathematical model andproblem-solving mechanism, and introduce dynamic shareholding system toreasonably split the risks and motivate or restrain the agent, to further realize theguiding role of motivation and improve teaching enthusiasm of the whole faculty.7. It proves that introducing dynamic shareholding system is the effective approachto improve the core competitiveness of the private universities by using DEA forcomparative analysis on many private universities within one region, verifying theevaluation indicators of their core competitiveness, and by making comparativeanalysis on the private educational institutes ever succeeded with the help of dynamicshareholding incentives and shareholding incentives to prove that dynamicshareholding incentives is better than shareholding incentives.8. A matching environment is required to better realize the effects of dynamicshareholding system. Only under a strong capital market environment, the market canwell reflect the management level of the private universities. Therefore, it is necessaryto perfect capital market and strengthens the effectiveness of the capital market to makeit easier for them to get listed. Therefore, while establishing professional managermarket mechanism for private universities, it shall also perfect the managementenvironment, standardize the construction of board of directors, build a rationaldecision-making management mechanism.The creative points and academic value of the thesis lie in the following: Firstly, the research uses Delphi and PCA to induce the key indicators, coreindicators and key factors of private universities· core competitiveness, which comesas a theoretic creation for improving the core competitiveness of private universities.Secondly，set a professional manager agency system at schools, build dynamicshareholding incentive model and use DEA for data indicator rising proof. It is aninnovation for private universities in this whole process from school managementmechanism to proofing method.Thirdly, the research will introduce dynamic shareholding system into privateuniversities to improve their core competitiveness, systematically study its mechanismof promotion and action, and propose the matching environment guarantee for theimplementation. It combines both creativity and operability.