Research On The Strategic Control System Of Chinese Enterprise Groups

Chinese enterprises are now speeding up their size expansion with diversification, collectivization and multination strategies. It is very important to deal with the relationship between parent and subsidiary companies during this process. To achieve business group's strategic goal, a parent company should implement coordinate and control activities around the group's core development issues, and adjust them according to the dynamic environment changes taken place both inside and outside.From the strategic management viewpoint, a parent company can use five mechanisms in the three periods of strategy formulation, strategy implementation and strategy evaluation. They are role control, organizational control, resource control, cultural control and performance control, which form a continuous and circular strategic control system all together. The system begins from role control. Considering their own functions in a business group, parent and subsidiary companies are in charge of the formulation and implementation of corporate-level strategy and business–level strategy separately. This could be propitious to completely solve the passive conflict hidden in parent and subsidiary companies and enhance the enterprise group's competence. In the strategy implementation process, resource should be utilized logically and every active factor should be mobilized by formal or informal ways. Among them organizational control defines the centralization and decentralization degree between parent and subsidiary companies, designs the appropriate organizational structure according to the role control principle. Resource control concerns intensive usage,extensive exploitation and cost saving issues, provides resource support for the organization strategy. Cultural control can not only make up for the shortage of organizational control, but also create the intangible resource for the strategy implementation. Performance control is the foundation of strategy evaluation. Basing on the different identifications of stakeholders, parent company emphasizes many kinds of performance indexes and appraises subsidiary companies with the purpose of value creation.