Path And The Countermeasures In The Private Sector In Transition To The Modern Enterprise System

In the view of New Institutional Economics , if the trade costs in the economical operation are zero, the disposition of the resources will be effective, Then, the economic system which refines the trade activities will exist unnecessarily ,nor will it appear. But any kind of economical operation has trade cost. The purpose of the existence of economic system is to low the trade cost, to ensure the ownership of the party in the economic act. And it enables this ownership to be stable and makes the trade operate more effective and orderly. The effective economic system provides the steady growth of the economy, and this sort of effectiveness is realized through the constant innovation of the institution . That is ,the institution is always in the state of changing and developing. The institutional change is a change for effectiveness and a change for an effective system.The private sector Economy has achieved great success in china, and it becomes one of the successful symbols of advancing gradually in due order in Chinese economic reform. From the viewpoint of private sector Economy growth, it accomplishes it's original accumulation under special historic circumstances and a special economic system background. Thus ,the mode of private sector Economy development is not standardized in its inner systematic arrangement. Such as property right structure m, management mechanism and financial system. As the economic reform mores deep, the market mechanism and economic environment are getting better and mature day by day. It is difficult for non-standardized enterprises to adapt the intense market competition. Therefore, proper institutional innovation and pursuit for the effective system become one of the chief problems which every private enterprise is faced with.From the above angle, this article analyses the present situation of the private sector Economy and the background of its development. It reveals the major defects and harms in the inner system management of privet sector Economy. The article points out the ideal methods to overcome these defects and harms lie in the institutional renovation. That is , to establish modem enterprise system. The specific context arranges as follows:Section one: The relationship between system and enterprise management effectiveness. It indicates the construction of economic system is one of the most important factors to the development of an enterprise.Section two: A summary of documents-The theory of modern enterprises. It introduces achievements by enterprises, property rights, the principal-agent theory and entrepreneur. It also introduces the researches of the formation of modern enterprises by American commercial historian Chandler ,which helps us understand the evolution of enterprise system.Section three: Analysis the background of the development of private sector economy. From the viewpoint of system reform and special cultural of private sector economy and the characteristics of its inner systematic arrangement.Section four: The present situation of private economy and its functions. It introduces the process of the development of private sector economy and its present situation.Section five: In this section , the article reveals the major manifestations of the unbalanced private economic system and its bad influence. The private economic system displays its bad influence. The private economic system displays its major defects in the following two aspects, that is ,the unclean its properly right and unreasonableness of its management. The existence of the above defects will become the setback to the further development of the private enterprise. So, the private enterprise needs institutional innovation.Section six: The meaningfulness of establishing modern enterprise system to the private sector economy. Joint-stock company can overcome the defects of the inner system of the private enterprise. The key to establishing the modern enterprise system lies in the clarity of the property right of each enterprise and its corporate governance structu...