Study On Encouragement To Managers Of State-owned Enterprises

The aticle explains the meanings of encouragement firstly Based on the researchdone by many other scholars on desires and behaviors of human beings, the articlegets the genera pattems of encouragement and then discusses its function.The question of agency between the owner and the manager arises directlybecause of such characteristics of state-owned enterprises as: breakaway of theownership and the management auhority difference betWeen the goal function of theclient and deputy asymmetry of information, imbalance of risk and duty etc. Instate-owned enterprises, the client (govemrnent) and the deputy of enterprise have anunequal position and the latter has no residual claiman rights. And these lead to theinefficiency of commission and agency. At present, there are still many questions inencouragement to managers of state-owned enterprises. These questions are: theabsence of the main body who encourages managers; the inadequacy of theencouragement power on managers; the singleness of encouragement panems and toomuch spiritual encouragement instead of material reward; the low retirement paywhich fails to ensure the livelihood of the retired; the lack of competitive designationand dismissal of managers; the shohage of long-term encouragement; the deficiencyof sound information systems and indicator systems of examination and evaluation onbehaviors of managers.According to the status mentioned above, the article innovates in devisingencouragemefit pattems of managers of state-owned enterprises. Firstly, it reconsmictsthe main body who encourages managers of state-owned enterprises. The govenunentawars the qualificatory management institutions of statc-owned assets, which areauthorized by the state to invest, part of the shareholder's right owned by thegovernment as an investor of state-owned ellterprises. Moreovef, the govenunenilIconverts the fimds, Which had been transferred by finane to otrprises, into loancaPital. As an independellt juridical person, managemellt institutions of state-ownedassets holding the shares of the uPgraded state-owned enterprises can solve thequestion of lack of main body who encourages mangers. The uPgraded stae-ownedellterprise elabofates itS interior corporate govemance, selects managers by means ofmarketing, brings pressure to bear on managers through outside comPetition of themanager market, the product market and the caPital markt. Inside enierprises, a greatvariety of pattems of material reWar and spiritual encouragement are devised. Thus,through inside and outside incentive, enterprises urge managers to work hard for thepurpose of maximum profits gained by the owneL Also scientific systems ofexamination and evaluation on managers are established inside enterprises. Rewarsand punishment on managers are made in terms of comprehensive aPpraisals ofmanagers' achievemellts with sorts of indicators. In order to make incefltive measuresmore effective, the aticle also sets uP some other coordinated measures.