China Star Group To Establish Modern Enterprise System, Case Studies,

Established in November 1995, CAC is a state-owned materials circulation enterprise under the jurisdiction of the State-owned Assets Supervision and Administration Commission of the State Council. The subsidiaries of the company were all enterprises under the former Ministry of Internal Trade, and they were successful for quite some time in the history of their development. However, their successes were resulted from the dual system of production material prices under the planned economy, and they did not last long. With the adjustment of the macro policy and the decision for the establishment of the market economy by the State, especially, after the industry was listed as one of the competitive sectors in the country, the State-owned material enterprises were making losses across the board. By 2000, more than 80% of the State-owned material enterprises had bankrupted and or had been on the verge of bankruptcy. Under such a circumstance, CAC tried its utmost to garner support from the governments. Through market inventions, introduction of foreign investment, assets restructuring, business integration and policy implementation, CAC, like any other State-owned enterprise, has tried hard to get rid of its financial difficulty under the new environment and has finally achieved great success. As a result, it has not only made up its deficits and got surpluses, but also initially set up the modern enterprise system, leading the company to a good momentum of growth. This paper discusses in detail the establishment, reform and growth of CAC, pointing out the motif of the company for establishing the modern enterprise system, the track changes, paths and features of its organizational structure. It also analyzes the difficulties and problems existed in CAC's establishment of the modern enterprise system as well as the strategies for further improvement of the system. Finally, it concludes that only the reform and innovation are proceeded in the light of the requirements for the modern enterprise system, can CAC possibly be developed and become stronger, and ultimately realize its goals for strategic development.