| It has been more than 20 years since Mike Wright, an Economist of UK gave the official definition of the phenomenon of Management Buy-outs (MBO) in 1980. It has been proved by the western practice that MBOs has played an active role in the aspects of increasing internal motivation, decreasing agency cost as well as improving a company' operational performance and managerial capabilities. That's why it has been widely applied. The MBO is usually used by foreign listed companies in business divestiture, spin-off, anti-hostile acquisition, as well as by diversified parent companies when in need for raising cash in order to avoid financial crisis or to divest their subsidiaries, therefore it is purely market-oriented. While the purposes for MBO to be introduced among the domestically listed companies are mainly for the withdrawal of state assets from the state-owned enterprises and system transformation, or for the private enterprises' identifying property rights and motivating the management, the administrative arrangement has played a decisive role in the management buy-outs, therefore there creates a difference in terms of the background and starting point for the MBO to emerge abroad, and has even caused some problems. Furthermore, a series of violation activities in the actual practice, and the delay in formulating relevant policies, rules and regulations have further aggravated the different opinions on MBO, creating worries and casting doubts over the loss of the state assets. As a result, since the beginning of this year the relevant government authority has put a "halt" to the MBOs both in listed companies and non-listed companies. Meanwhile, experts have unanimously agreed that "until today, no real MBO has ever taken place in China."Based on the situation mentioned above, this paper tries to make analysis of the cases of both domestic and foreign MBO by adopting the method of comparable research. By comparing the different roles and meanings of MBO under different social environments, economical mechanism and industrial background, analyzing and making summary of the impacts by pre- and post-MBO in terms of the competitiveness of the enterprises (including organization structure, business structure, corporate culture, development strategy as well as managerial performance), trying to summarize the strategic significance that MBO has brought to the company's development, suggesting some proposals and countermeasures for reference to those Chinese companies which adopt MBO in their future's reform. Meanwhile, through case studies on successful and unsuccessful MBOs both at home and abroad, this paper also tries to probe into the impetus MBO plays as a role of "transactional strategy" in promoting the company's development, gathering some successful experiences which arebeneficial for the reform of Chinese enterprises, so as to provide useful reference for the Chinese enterprises in enhancing international competitiveness and sustainable development. Thus, this paper is both practical and realistic.To summarize the analysis by comparable research in this paper, one can see that the MBO is an alternative for the reform in property rights in Chinese enterprises. From the after effects of MBO, system transformation is not the "Panacea" for an enterprise to solve all the managerial problems in a short time, but rather a key point for the success of MBO by increasing the company's core competitiveness. Even though the practice of MBO in China has certain limitations, it's still a good attempt for the strategic restructure of state economies and reforms in property rights under the current conditions, especially for those private enterprises, while the property right issue has become an obstacle for the company's development, as a means to identify the property right and to show the value of the entrepreneurs and motivate the entrepreneurs, the MBO has no doubt a positive reference meaning for private economies which will play a decisive role in the future economy, and also for pr... |
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