Private Corporate Governance: The Family System To The Principal-agent Change In The System

The private enterprise of our country develops vigorously with the establishment of the socialism market economy system. By the mechanism of clear property rights, vivid management, the double to the choice and competing to choose excellent persons, self-development and self-constraint, the private enterprise occupied great advantage in the market. In the last years, the private enterprise has already become the important power of our national economy; the contribution to the national economy is very outstanding. The private enterprise become leading factor progressively in the course of development of our country's economy, it is an important support of the fiscal revenues, So developing private economy is necessary and everyone approve it.Now, the private enterprise has more advantage in quality and contribution. At the same time, its growth is stronger and stronger; some enterprises finished the primitive accumulation of the capital rapidly. Now there are many private enterprise groups, but some influencing enterprise groups failed, especially in 1990s. The reason of their failure is much, however, a common key is that the draggled management of themselves constraint their development.My article analyzes that how to solve the problem of Principal-Agency in private enterprise, thus the private enterprise can be stronger than before. This text can divided into four parts in accordance with construction of my article:The first part, family system is the main form in the private enterprise in our country. In this part, I introduce the situation and contribution of the private enterprise using some data. Then I analyze the advantage and inferior position of family enterprise in detail. And make a conclusion that family system has an advantage to start a business but a disadvantage in the development. In order to promote the development of the private enterprise, we must reform management mode, we should change family system to Principal-Agency system.The second part, the rising and development process of Principal-Agency theory. This part mainly introduces the rising and development of property righttheory and Principal-Agency theory.The third part, the problem of the property rights and the problem of Principal-Agency in the private enterprise. This part analyzes the problem of the property rights and its danger in detail in the private enterprise of our country. At the same time I discussed the present condition of the Principal-Agency and analyzed its reason and danger.The fourth part, perfecting Principal-Agency system in the private enterprise. In this part, I advise some methods to enforce the constraint and inspiration by taking the external and internal environment into consideration. I made analysis of several relatively new constraint and inspiration measure. I hope these points of views could enlighten the private enterprise's development, the standard of trust-agency mechanism in private enterprises and the design of constraint and inspiration to agent in private enterprises.