The Privatization Pattern & Process Management Of Industrial Firms Under The Direct Jurisdiction Of Yiyang Municipality

The state-owned industrial enterprises in Yiyang City of Hunan are small and medium-sized state-owned enterprises (SMEs) in the traditionally competitive industries. The reforms of past years have not enabled the SMEs to extricate themselves from difficulties; instead, the economic benefits are further worsening. Theoretical studies and the experience gained from privatization pilot programs demonstrate that privatization is an effective means to reform the state-owned industrial enterprises in Yiyang. The privatization reform is not only a necessity to deepen the enterprise reform and overcome the present difficulties but also an essential requirement of economic restructuring and economic globalization. Meanwhile, it is also the result of the rapid development of private economy, becomes the prerequisite of privatization and makes privatization a reality.It should, however, be noted that Yiyang, as a relatively less-developed area in the central part of Hunan province, is limited by its financing capability and the resources available for the industrial enterprises directly under the jurisdiction of Yiyang Municipal Government and is unable to achieve the quick withdrawal of SMEs from the traditionally competitive industries by adopting the so-called "two buyouts" (the buyout by SMEs of the entire holdings or interests of company or business and the buyout by employees of membership of state-owned enterprises)as is done in some big cities like Changsha. On the contrary, various forms of privatization should be applied in different stages. The six different forms of privatization suitable to the industrial enterprises directly under the jurisdiction of Yiyang Municipal Government are unique in their respective characteristics and requirements. Corresponding form of privatization has been adopted based on the survey of 40 industrial enterprises directly under the jurisdiction of Yiyang Municipal Government and on the special particularities of each of the said industrial enterprises. Both foreign studies on the effects of privatization and the comparative study on the effect of privatization of some enterprises under the pilot program in Yiyang City have proved the conclusion that the privatization of state-owned enterprises contributes to the increase of efficiency and employment. The paper holds that privatization is the essential solution to the problem of low management efficiency in state-owned enterprises based on the cause study of low management efficiency in state-owned enterprises as well as the analysis of the major contributing factors such as the low working efficiency of employees in state-owned enterprises, high system cost and high debts.The privatization drive is, however, not a smooth sailing. Conceptual barriers, oppositions from staff, dissenting opinions as regards prices, corruption, and the interest motives of governmental departments and managers of stae-owned enterprises, etc. are obstacles of privatization. Deep analysis and corresponding countermeasurers are helpful to remove the interference and hence accelerate privatization. Based upon the experience gained from privatization pilot programs, the paper puts forward the brief guidelines of privatization management, and based upon the case study, the paper poses specific privatization operability procedures of important reference value.In conclusion, the privatization of the industrial enterprises directly under the jurisdiction of Yiyang Municipal Government is necessary and feasible. All the obstacles can be eliminated and the result desired can be achieved by adopting the right forms of privatization suitable to the corporate actuality in accordance with legal procedures.