Management Of Companies Based On Incentive And Restraint Mechanisms

With the fast development of economics, enterprises as an important part of Microeconomics needs better developments too. In order to catching the opportunity of development, good corporate governance has become increasingly important during the process of the implementation of corporate strategy. Corporate managers have gradually come to known that effective corporate governance could increase the competitiveness of enterprises, and the company could gain healthy and sustainable development from effective corporate governance. So many related people pay much attention to effective corporate governance. In a market economy, the separation of ownership and management is the premise of corporate governance and development. From the assumption that all people are rational, the essence of corporate governance is that clients and agents with a different objective function, agents with moral hazard behavior. To ensure that the client's rights and interests not be abused, contractual relationship between clients and agents should make the necessary arrangements in a system.The author read many articles related to corporate governance, found that current system analyzing of corporate governance have several perspectives, that is from the agent perspective, from the internal and external governance perspective, and from the financing analysis perspective.Because incentive and restrictive mechanism has became the core concerned problems during the process of company's development, corporate executives concern more about the effective built of incentive and restraint mechanisms while they pursuing the objective of maximizing the wealth of enterprises. The separation of ownership and management in Modern enterprises cause the asymmetric information between client and the agent, the agent can not be observed directly for clients, thus creating the "moral hazard" and "adverse selection" problem, how to solve this issue became the core of incentive theory.Although scholars have made extensive study about the theory of incentive, the anthor found that there are seldom articles analyze corporate governance from the perspective of incentive and restraint mechanisms, therefore, this article analyze corporate governance from the perspective of incentive and restraint mechanisms. This paper use the knowledge of economics, management, and financial management, set up indicators from the perspective of incentive and restraint mechanisms, and made an empirical analysis of China's automobile industry from these indicators, then provide a new analysis and evaluation criterion to corporate governance.