A New View On Arrangement Of Enterprise Ownership: The Dominant Governance

Arrangement of Enterprise Ownership is to assign the residual claim right of enterprise and the dominant rights. The best arrangement of Enterprise Ownership is following the principle of value-maxi-mum. The study to Arrangement of Enterprise Ownership is the forward position and hot spot in discussing of modern Enterprise theory.Concerning the question of rational arrangement of ownership, there have always been two diversified trends: the"Shareholder Uppermost"theory and the"Stakeholder"theory. The"Shareholder Uppermost"theory holds that the residual claim right of enterprise and the dominant rights are to go to the investors. While the"Stakeholder"theory argues for a balanced share of ownership among all the stakeholders and that human capital owners can have a larger proportion of interest than the material capital ones. Given the fact that enterprises emerge in different times, fields, with their own developing phases and organizations, neither of the above theories can be perfect enough to discard the other. Therefore, it is necessary to integrate the two complementary theories.The study on the arrangement of enterprise ownership bases on the analysis of the property rights. Based on the review of the enterprise development in history and current sate, this thesis draws an analysis of applicability of"Shareholder Uppermost"theory and the"Stakeholder"theory, focusing on the general theories of optimal arrangement of enterprise ownership, and then introduces the new"Dominant Governance"theory, integrating the two above theoretical trends.According to"Dominant Governance"theory, the"dominant shareholders"defines the ownership holders. However, with the changes in the degrees of"dominance", the single shareholder in the"Shareholder Uppermost"theory becomes one of the many stakeholders in the"Stakeholder"theory, and a"relatively dominant shareholder"finally. The"relatively dominant shareholder"is measured by the"degrees of dominance"so as to define the share of ownership. The governance structure based on this process can utterly reduces the governance cost and improves the efficiency of a given enterprise.