On Establishing Financial Management System For The Chinese Group Enterprises

Group enterprise is an organization of higher level emerging in the development of market economy for the needs of large-scale production. It occupies a very important position in the national economy. To ensure the survival and development of group enterprises, a well-constructed and efficient financial management system is of critical importance. Based on the degree of centralization, the author first divides the financial management system into three models: centralized, decentralized, and partly centralized and decentralized, and conduct analyses of them respectively. Then she focuses on the study of the various factors that affect the financial management system of group enterprises with an emphasis on the influence of the organization structure and product life cycle on the model of financial management system. Based on the theories of property economics and new system economics, it is shown that only when the financial management system meets the development needs of the group enterprises can it be energetic and powerful. Judging from the status quo of the group enterprises in China as well as their financial management systems, the author comes to the conclusion that it is imperative to establish a financial management system that concentrates on capital management with predominantly centralized and controlled decentralized style at the present stage. Apart from an attempt to develop a system design of this financial management model, the author also emphasizes the important role of settlement houses and the need to further extend their financial functions. It is hoped that the suggestions made in the thesis can provide practical references for the successful construction and operation of the financial management system in the group enterprises.