The State-owned Enterprise Research, Incentive And Restraint Mechanisms

The reform of SOE (state-owned enterprise) is the central link of the deepening of economic system reform. Meanwhile, the mechanism of incentive and restraint of SOE managers is a key problem related to the success and failure of the SOE reform. It is also a central issue of difficulty of SOE reform at present. Through theoretical and evidential analysis, a new mechanism of incentive and restraint of SOE managers, which is suitable for SOE of china, has been brought about in the thesis.Deriving from the actuality of the reform and development of SOE, the necessity and practical significance of the research topic are put forward and explained. By means of theoretical analysis and comparison between the SOEs of China and that of the developed countries, a new mechanism of incentive and restraint of SOE managers has been studied and some suggestions have been made. The main parts of the thesis are as follows: The first is the explaining of the reasons and the theoretical basis, according to the humanistic hypothesis of the managers, the needs of the managers and the principal-agent relations of the SOE. The second is the brief introduction of the historical reform course of the western SOEs and their experiences on the mechanisms of incentive and restraint of the managers. There is much in their methods that we can make use of. The third is the study of the concrete contents of the mechanism of the incentive and restraint for SOE managers under the condition of socialist market. It shows that the incentive mechanism should include reward incentive and spiritual incentive.The main contents of the reward incentive mechanism are: (1) Short-term incentive reward including annual reward and monetary reward for the consumption at the managerial post. (2) Long-term incentive reward including holding the firm's stocks and options as well as high-level of pension allowance, etc. Spiritual incentive should comprise challenging objective incentive, higher social position incentive and trustful incentive. The restraint incentive mechanism should include market competitive restraint, legal restraint, budgetary restraint, restraint of responsibility as well as supervisory restraint, etc.Since constructing the perfect socialist market economy is quite a long process, the author point out particularly that we should push the reform forward actively and stably in the light of the actual conditions of the SOEs. In order to setting up the mechanism of reward incentive, we should consider the objective of arousing the enthusiasm of managers as well as the endurance of staff and workers of SOEs. So the part of how to design the reward of managers has been expound at great length. Two appendices as references to specific reward designing have been attached behind to the thesis. Moreover, we should pay attention to applying measures of the direct supervisory restraint as well as all other restraint methods mentioned in the thesis.