The Research On Business Diversification Of State-owned Survival Companies

The existence of a diversified operating company is the inevitable choice of survival companies. In the paper, taking the transaction cost theory, corporate governance theory and agency theory as the theoretical basis, the problem of firm diversification in survival companies of Shengli Oilfield was investigated using the Yearbook of Shengli Oilfield and the related statistics and survey data. On this basis, the author proposed the specific measures and methods to improve the existence of a sound corporate governance of its state mechanisms, as well as the operational efficiency of the assets.First of all, the author analyzed the status of diversified businesses in survival companies using the qualitative methods. The history and development of survival companies in Shengli Oilfield was recalled; and the characteristics and causes of the diversified business in the special economic organization was analyzed; and the opinion that a diversified business was the inevitable choice of surviving themselves in a market was pointed out in this paper.The method of a quantitative analysis in this paper was based on the three models (ANOVA analysis, linear regression and ordinal regression) which were highly correlated and independent. Through the ANOVA analysis, we found and quantified the significant differences between different types of survival companies from a firm level perspective. ANOVA analysis revealed the existence of a wide range of process in the presence of imperfect corporate governance mechanisms. Using the linear regression analysis from the company level we found out some factors that affected the degree of business diversification in survival companies; among them, an important conclusion is that the existence of business diversification in Shengli Oilfield's survival companies was a process with its inability of improving the company's operating assets. Using of social survey data, we examined the reform preference of employees in survival companies under the operation of an ordinal regression model. The results showed that the workers preference was an important factor that affected the restructuring of the existence of diversified companies. It gave us a foundation to provide some policies and advices improving the business diversification in survival companies of Shengli Oilfield form an individual level.The conclusion of the article put forward to improve the survival company's corporate governance mechanism and improve the profitability of its assets. And some useful policies and proposals were mentioned to improve the realization of the existence of the company's operating diversity, which was the special progress of restructuring the system and combining the preferences of workers in survival companies.