System Reform Of The Second Heavy Machinery Group Company And Countermeasures

Located in Deyang, Sichuan province, The Second Heavy Machine Plant Group Co. (referred to as SHMP hereafter) has a history of over 40 years?development since its establishment in 1958, with its great devotion to China'S heavy industry construction and development. With the implementation of the economic reform and opening-up policy of China and the penetration of the innovation of the national owned enterprises, SHMP had made great achievement in its management and administration mechanism transition. Its efforts at reforming and building up with the group a modern business system were especially benefited from the promulgation and implementation of the "Enterprise Law?of China of December, 1993. It is in the law's light that SHMP upheld the keynote of "clear property right, clear responsibility and right, clear functions of enterprises and government, reasonable administration? With the factual conditions taken into account and after deliberations, SHMP set up a reform plan: making the group headquarters the center for investment and decision-making, the development department and subsidiaries the center for business performance and profit making, and all the sub-department and workshops the center for production. The plan began to take place from 1995. Just like any attempts at reform, SHMP抯 drive has undergone a great many difficulties and setbacks in its renovations. Even till now, for some historical reasons, the SHMP?reform efforts have only reached some superficial factors and are still far from catching up with the pace of the economic reform under the national macro controlling. Of all the remaining problems are the latching of the enterprise property right, the nominal legal person, and the ball-up administration. These three most serious problems have been, and, in fact, are still in the way of SHMP's further development, because its strong storage and potentials of intellectuals, technologies and facilities have not been brought into full play. Based on the studies of the past and the present, this paper puts forward three analytical methods as solutions to the problems, in the hope of that three will be a more efficient business operation and administration for SHMP. First, the all-way investment and a workable legal person system is to be encouraged so that an efficient modern enterprise administration system can be set up. Established under the planned economy of China, its property right always stands in the way in the process of the innovation as far as the relationship of enterprise and government is concerned. Therefore, a multi-investment mechanism becomes a priority, without which the separation as well as cooperation of decision-making, supervising and executing can never be realized. That is also the case for establishing a rational legal person system. Secondly, the ?+3+1?pattern of the administration is to be further developed. That is to say, the shareholders are to be authorized to exert the right of decision-making, personnel and profit making on the enterprises they invested in. With the reference to the international pattern, they can also take part in the budget administration, programming, supervising as well as the property right administration of the subsidiaries. Thirdly, a new idea of the implementation of th...