Theoretical Study And Practical Analysis On Corporate Multi-Industrialization

Since 1960s diversified companies have been prevailing in many west countries. Economists and managerial scholars have paid more attentions to this trend, and they have been studied it extensively from different angles and in different ways. Most of them confined this problem as a business strategical problem. They thought that corporate multi-industrialization means business diversification, and it just a strategical tool of corporate development. If we presume enterprise as a system consisted of three sub-systems: the input, the transmission and the output, we may find that most of the studies localized in the output system, and they isolated the output system from other sub-systems of the enterprise and ignored the relationships among the sub-systems of the enterprise.This article treats corporate multi-industrialization in a dynamic and systemic way, and tries to analyze the function mechanism of corporate multi-industrialization, and creates a contingent decision-making model of corporate multi-industrialization. This article anticipates putting forward a complete and systemic thought way and a guide of operation.This article consists of six chapters. The first chapter is the instruction of the article, it relates about the background and significance and the structure of the article. The second chapter is about the theories of the nature of the firm and of the development of corporate; in the end of this chapter there is a remarkment of the traditional theories of corporate multi-industrialization and a recomprehension of corporate multi-industrialization of the author. The third chapter is the research of the functional mechanism of corporate multi-industrialization. In the forth chapter, the article analyzes the contingent decision-making model in detail. In the fifth chapter, the article thinks reengineering of enterprise as the best mode of corporate multi-industrialization. In the sixth chapter, we researches in a positivistic way, and we emphasize on the research of Haier Co. Ltd.This article considers the enterprise as an open system and emphasizes thedevelopment of the whole enterprise. Corporate multi-industrialization is a process in which the multi-productive capacity is formed by the combination of different factors and by the interaction of the sub-systems in an enterprise. The corporate will have several profit points by supplying the different products and services to satisfy the different demand, attain the multi-goals of the whole corporate and finally realize its expansive development.The essential inductions of the multi-industrialization are: 1) Pressure: The limited market demand and unbounded supply of the products give a pressure which forces the enterprise into entering into one or more fields. 2) Motivation: Sometimes the enterprises attain its profit goal or gain more profit by the multi-industrialization. 3) Equilibrium: A proper multi- industrialization could reduce the costs and disperse the risk.There are three conduction mechanisms between the core competence and the market opportunities: capability-pushed; opportunity-pulled and capability-opportunity interaction.The contingent factors of the decision-making model include market demand, industrial character, capital market and the enterprise character and so on.There are also four essential definitions in this model: core-competence, competent advantage, platform of multi-industrialization and business related capability.Re-engineering is an important and a faster and efficient mode to corporate multi-industrialization. A successful re-engineering could reduce the transaction costs, raise the efficiency, expand the market scope and reinforce the competence of the enterprise.