State-owned Banks Strategic Objectives, Organizational Structure And Performance

State-owned banks have very important strategic position in China’s finance system and macro-economical system. The organizational adjustment and performance improving of state-owned banks affect the healthy development of financial industry. Based on the economical reality, it has both certain theoretical value and practical significance to make deep investigation of the organizational adjustment of state-owned banks and try to set up an analytic framework for the research. Existing files pay more attention about state-owned banks’ organization itself, but it is still insufficient to research the affecting factors of state-owned banks’ organization. This paper tries to combine the optimization and adjustment of state-owned banks’ organization with the outside environment and strategic objectives of state-owned banks, and set up a more systematic analytic framework of state-owned banks’ organization.we set up a theoretical framework "strategy-organization-performance (S-O-P)". for the state-owned banks. We make deep investigation of the logical relation of that the outside environment and strategic objectives decide the state-owned banks’ organization and that organization structure affects its organizational performance. During the framework of "S-O-P", the outside market and technologic environment affect both the choosing of state-owned banks’ strategic objectives and the adjustment of organization of the state-owned banks. The state-owned banks adjust their organization to achieve their strategic objectives, and both strategic objectives and organizational structure should adapt to changing circumstances.The relationship between strategic objectives and organizational structure of state-owned banks in different historical development stages verifies the validity of the S-O-P framework. The organizational structural features of Citi Bank, Standard Chartered Bank and HSBC reveal the basic principles and common grounds of the advanced international commercial banks in terms of organizational structure, and this has a certain degree of enlightenment and significance on the organization structure reform of state-owned banks.We make a systematic analysis of stakeholders’ governance mechanism in modern commercial bank as the basis for state-owned banking organization structure efficient running.We walk two steps for the research of state-owned banks. The first one is to discribe the regulation of strategic goals to organization structure and the contraints of organization on performance. And the second one is to make investigation on performance of different phases, on the base of estabilished strategic goals and organization.The history intermittence of state-owned banks’development determines its performance measurement suits for the way of plural phrases and multi-index. On the base of domestic and foreign commercial banks performance measurement methods, we measure the organizational performance of state-owned banks, choosing different indexes according the strategic objectives in different development stages. The measurement result shows that the four big state-owned banks made a significant contribution to macroeconomic growth and financial development during the period of state-owned specialized banks, but the asset quality deteriorated year after year at this stage. And during the period of solely-state-owned commercial banks, the ROA of the four big state-owned banks fell continuously, and the NPL ratio deteriorated to the worst level in the history, but they still play a very important role to macroeconomic growth at this stage. During the period of state-controlled commercial banks, the four big state-owned banks experienced stock system reform and listed successfully, their indexes about market performance, asset quality, risk control and other international commercial bank’s performance metrics have improved greatly and basically reached the international advanced banks’ level. The investigation of profitability of person and institution of state-owned banks further evidenced the close relationship between the organization and market performance.Based on the development of environment and adjustment of strategic objectives, we discuss the principles and directions of organizational adjustment of state-owned banks. The forthcoming environment development including the increasing market competition under the background of financial deepening, increasingly sound financial regulation under the background of financial internalization, and soon development of bank network under the background of information technology. The mature financial markets environment prompt state-owned banks fully take maximizing profit as strategic goal. The principles of organizational adjustment of state-owned banks include viewing market and customer center, pursuing streamlining and efficiency, combining decentralization and centralization, proper virtualization. The direction of organizational adjustment of state-owned banks include continually improving the existing vertical and horizontal organizational structure, building a perfect modern bank corporate governance mechanism, innovating the organizational mode according to the environmental change. For the optimization of the organizational structure and performance improvement of the State-owned bank, government and banks need to take corresponding countermeasures respectively at the macro and micro levels.