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Quasi Vertical Integration Industrial Organization Analysis Based On Super Market Contract Theory

Posted on:2016-09-03Degree:DoctorType:Dissertation
Country:ChinaCandidate:Y N CaiFull Text:PDF
GTID:1361330461957738Subject:Theoretical Economics
Abstract/Summary:PDF Full Text Request
With the development of division of labor and specialization,the trading relationship between the enterprises is becoming more complex,due to the emergence of enterprise outsourcing,supply chain coordination,strategic alliances and franchising.Summed up in intermediate organizations or intermediate form is just a metaphor without precision,which can't reveal the essence of the phenomenon.In traditional norms of enterprise theory,explanation of the problem should also be included in the category of contract theory system.Williamson inherited McNeil for classified methods of contract types and divided the contracts into three types,that is,ancient contract,new ancient contract and relational contract.The contracts between the enterprises which have long-term supply relationship in the value chain belong to relational contract of quasi-integration organizations undoubtedly.Williamson's use of the concept of relational contract is to explain the determinants of the enterprise boundaries and to reveal effective governance mechanism from the mortgage arrangements.Research for relational contract has increased in recent years but doesn't catch up with the paces of the relationship between enterprises.With deepening of division of labor between enterprises,relational contract itself had the striding development in practice,and still required further study.Deals between enterprises gradually transited from simple commodity trades or productive service trades to other trades with non commercial property.The new trade is a kind of trade containing operating decision,which is different from the delaying obligations.In the past,business decisions can't enter the market as a trading transaction because of the too high cost of business decision-making.The workers could be organized in the enterprises where workers obey and execute the decision made by the entrepreneur.In the new trading relationships,market trading as the main content and way to trade,shows mainly the production of goods or services;non-market trading as a means of improving the efficiency of market transactions,shows mainly management and decision-making across the enterprise.People attach decision-making across the enterprise to the trade of goods and services,to make the trade more efficient.The attachment has no independent price because it is non-market trading.The two or several parties of trading decide whether to accept the deal and execute transaction in what conditions according to their package deals in cost-benefit analysis.This article will call management and decision-making across the enterprise the super market contracts,and explain why the quasi-integration organizations can implement effective corporation and division of labor from the super market contract.Super market contract is not complete form the text perspective.Sometimes it starts as a framework,and enriched in the process of implementation,constantly relying on interpersonal skill.Because it it open and it has the characteristics of the framework for action,it can hold on contract execution and enrichment according to the reality.Core enterprise's cross-border management is embodied in the day-to-day operations.It can constantly find problems and strike agreements with cooperative enterprises in the text or oral form,in order to maintain the stability of the quasi-integration mechanismIn this paper,the explanation of quasi-integration mechanisms of close coordination across the enterprise is a kind of induction,which is a higher level thinking.We observed that many industrial organizations were implementing super market contracts and the successful quasi-integration organizations trades went more smoothly in the more competitive value chain due to successful implement of super market contract.Therefore,this paper will select several representative cases,dissect them from the super market contract theory,try to explain how the super market contract runs,what feature the closely connected enterprises have in the contracting and implementation of contract,what relationships are between the success of enterprises and the features,and what conditions the enterprises need in the successful implementation.This paper will select relevant enterprises with successful implementation of super market contract in the agricultural sector,telecommunications industry and producer service industry respectively,analysis them in the related theory of Williamson,Daniel et al.,and abstract several key elements of successful implementation of super market contract.By analyzing the cases of three state-owned telecom firms,we found that:(1)The contract design is extremely important to improve the execution efficiency of super market contract.China Mobile provides social distributors with the same management decisions as their self-operation business halls,from the uniform design of marketing activities,the unified providing of advertising material,the same secret supervision of the third party,and the same marketing quality evaluation scheme.This ensures not only the implementation of marketing activities without aliasing,but also the social distributors' service quality,furthermore,avoids the possible measure problems by not doing so.(2)For the governance mechanism,the measures that China Mobile took for ensuring self-efficient implementation of super market contracts mainly lie in the combination of precise dimension evaluation and strong incentive,strict personal punishment system,higher performing capital,Williamson safety guarantee clause and relationship governance.It is noteworthy that China Mobile makes full use of the function of incentive mechanism.It designs "option",the incentive measure,which firmly grasps the establishment and development of the core distributors.This is one of the measures China Telecom is trying to imitate currently.(3)For the efficiency of mobile business operation,the gap among the three telecom firms lies in the different depth of contracting and implementation.China Mobile and China Unicom perform similar organization structure on developing social channel.However,the different depth of implementation leads to a giant gap of operating efficiency.But the late-comer,China Telecom,accurately grasps the core content that China Mobile attaches great importance to management across the enterprises during the process of imitating China Mobile,and achieves instant effect.For the perspective of contract theory,just as China Telecom accurately grasps the key elements which China Mobile took in performing super market contract successfully,it fundamentally grasps the key to success.However,China Unicom stays on the surface of imitation from beginning to end and failed to grasp the nature of the problem,so currently its mobile service sector was caught up with by China Telecom who subsequently operates hyper market contract.In the field of agriculture,this paper selects 'Jiangsu Lihua Animal Husbandry Group' as object of research and analysis:(1)They are similar to other "leading firms plus farmers" models on transaction link design.Lihua supplies farmers with chicks and vaccines,provides technical guidance and technical specification,in addition,applies some production decisions.To a large extent,this restricts the space of agricultural product quality variation and avoids measurement problems that may be encountered when not to do so.(2)Lihua successfully makes use of super market contracts and realizes scale economy effect of agricultural products with high added value.It implies that:China's scale efficiency of labor-intensive agricultural products with high added value can be realized by combining the scale operation of leading enterprises and the moderate scale production of small family farms.(3)To effectively prevent the farmers bootlegging chicks,chicken and other opportunistic behavior,Lihua designs "Process Price Mechanism".We use Williamson's correlated theories to analyze this and find that they maintain the specialized asset investment of agricultural enterprise in form of two-way reciprocal trade,so as to maintain the stability of cooperation.Among the producer service firms,we select a aluminum plate dealer to observe,which is a female entrepreneurs.It explains to us that entrepreneurs play the key role to successfully perform super market contract in the extreme form,that is,leveraging the upgrade and increment of the value chain by a person's strength.(1)In the enterprise management,it's not at one stroke to perform the super market contract.In the process of practice,the aluminum plate dealer found the broad market prospects of non-standard in products in advance with a entrepreneur's peculiar strategy vision,and felt the way that they can use the form of management across the enterprises to provide customers with non-standard products.This kind of exploration greatly increases the product profit space,promotes the upgrading of manufacturers and improves the transaction efficiency on value chain among enterprises.(2)The aluminum plate dealer implements management across the cooperative manufacturers,from human resources,production management,logistics management to the construction site,and it participates in management decision of the cooperated manufacturers.From the view of third party,it replaces the decoration company to finish quality supervision work from the source of starting.During the process,it furthers the manufacturer's management level.(3)In order to carry out the"On-the-spot People" decision,the aluminum plate dealer possesses the right of cross-border personal management.This is not only the innovation of cross-border human resources management,but also the fundamental guarantee of the construction quality.In order to ensure the effectiveness of "On-the-spot People" decision,she not only regularly starts inter-enterprise culture training,which transfers related construction experience and information of market demand to the team members of the manufacturing company,meanwhile,she strengthens the management of relevant tacit knowledge,which makes the team members grow gradually in "learn by practice".Based on the analysis,the smooth implementation of super market contract includes the following conditions:Firstly,the manager should have entrepreneurial ability.Only people with entrepreneurship will have unique vision to select appropriate type of contract,for the sake of cooperating with other enterprises,in order to improve their competitiveness.And only people with entrepreneurship can implement cross-border management successfully.Secondly,the core enterprise mastering key resources should have the cross-border management authority and the cooperative enterprise should choose to obey the management of the core enterprise actively,for the sake of maximization of common interests.Thirdly,reasonable contract content and link should be designed well.If the control can't implement from the start of the production process by reasonable contract content and link design,and the non-standard product trade can't transform from uncertainties to several certain things in the process of production,the super market contract would be false.Finally,enterprises should pay attention to the design of the governance mechanism.In addition to the trust mechanism,incentive mechanism,much more distinctive governance mechanism should be designed to maintain cooperation.The discussion of the selection of enterprise organization problem is the chosen of contracts in fact.The study of the three selected cases,not only develops the contract theory,but also enriches related organization practice experience.In the new economy,maintaining and even development of the division of labor in the value chain has become an inevitable requirement of economic development.The value chain coordination achieved by constructing super market contract between enterprises is accompanied by the division and combination which significantly improves production efficiency and increases customer value.Our business development should pay full attention to the division of the economy which brings us endogenous and exogenous comparative advantages choose the right contract to cooperate with and design reasonable contractual selection and contract content,to ensure the implementation of quasi-integration mechanisms.
Keywords/Search Tags:quasi vertical integration, super market contract, management across the enterprise, enforcement contract mechanism, governance mechanism, entrepreneurship
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