Study On A Standard Pattern Of Implementing Management Buy-outs In China

At present, economic restructure and transition of economic system in Chinese enterprises are at a critical stage. For Chinese enterprises, how to make enterprise ownership clear, how to solve the problems of managers' incentive and constraint, how to increase profits and competence are the most important. After China's entry to WTO, it is not only important to our enterprise reform, but also to the economic system reform. As a supplementary to corporate governance, management buy-out(MBO) makes managers become shareholders. It confirms the value of human resource and is also the latest achievement of enterprise ownership reform and state-owned enterprise reform. This paper is on the standard pattern of implementation of management buy-out.Altogether, there are seven chapters. Chapter One is on brief introduction of MBO, including its meanings, theoretical basis, participants and their major responsibilities, and its history. In Chapter Two, after analysis of enterprise reform, it is pointed out that MBO is very important to enterprise development. It can reduce the agency cost as well as promote economic restructure. In Chapter Three, the author introduces development of MBO in China, analyzes the characteristics of MBOs that were already carried out. Then the author puts forward the difficulties of developing MBO in China and predicts its trend. Based on the mature experience of MBOs in foreign countries, a standard pattern of implementing MBO in China is designed in Chapter Four. It includes in which enterprises MBO can be carried out, how it shall be done and in what procedures. In Chapter Five, the price of buy-out and corporate governance, both of which are the most important to MBO, are discussed in details to provide a possible way to solve them. Chapter Six is on two MBOs cases which have been carried out recently in China. The successful experiences are summarized and problems are pointed out. And the two cases also show MBO has positive effects on enterprise development. In Chapter Seven, the author provides some suggestions.