Group Financial Control Problem

As a new economic organization form, Enterprise Group is the development product of market economy and socialized production. And it is an important modern economic organization form, which reflects national economic competitiveness in the world economic arena. However , the core of enterprise group is holding company, namely Group Corporation. The collectivization trend of Chinese enterprise becomes more and more obvious. And more and more group corporations come out , which changes the structure of national economy and economic development pattern and influences enterprise operation way and financial policy.However, there are some financial control problems in Chinese group corporation, which are as follows:1. The enterprise corporation came out rather late, and the rudiment of many enterprise corporation is formed by transverse economic combination of enterprise under the direction of government. That' s to say that many group corporations are not based on the rule of market economy development step by step, which easily results in "One Body but not united" in the enterprise group, also cause " Scale of Diseconomy" .2. "Top Level Control Event" frequently arises, which represents incomplete corporate governance itself.3. The finance of subsidiary company is out of control of Group Corporation, which is mainly caused by increasingly enlarged scale, complicated organization structure , unreasonable financial control power , incomplete financial control mode and so on . Corresponding system of internal financial control has not been established yet.This paper emphasizes the discussion on financial control issue from the following aspects:1. Analyzing the option factors of financial control mode comprehensively and putting forward two-dimension option mode in order to match different situation options of development strategy of group corporation, various organization structures of subsidiary company and so on.2. Improving the corporate governance of group corporation itself to avoid internal top level control as possible as we can.3. Group corporation shall try its best to review the investment control for subsidiary company from point of view of transaction cost in order to avoid the " Scale of Diseconomy" .4. Group Corporation can control and encourage manager behavior by profit budget control and distribution budget control, but Group Corporation shall make sure budget accuracy. As far as budget accuracy is concerned, this paper takes the principle of game theory theory to raise solution for budget accuracy.5. This paper discusses how to improve financial control of group corporation by using exterior supervisionThis paper takes basic theory and methods of corporation financing to represent financial control of group corporation under the modern management science . And it also takes examples to explain the important role of financial control in the daily operation management and describes basic content and system of financial control of group corporation. This is to make the financial control of group corporation to system and improve its operability.