Research On Chinese Private Enterprise System Based On Enterprise Life Cycle Theory

Since the reform and opening up, China's private enterprises, have sprung up at a surprising speed, gradually become a new force not to be underestimated in the Chinese economy and also an important part of China's economy. Private enterprises play an important role in promoting economic development, enhancing employment, increasing national revenue, and facilitating people's lives. However, the life cycle of private enterprises in China is generally very short, many enterprises face a premature collapse; besides, there are occurring many problems in their development process such as financing difficulties, brain drain, a single property rights system, family management, random decision-making, lack of scientific decision-making etc. These problems are partly created by the external environment factors which are the secondary reasons, and partly because of laking a perfect internal system which undoubtedly is the root cause. Therefore, it is essential to research the system of private enterprise in China, and to establish a scientific and effective institutional system adapting to the development of China's private enterprises. This paper mainly studies China's private enterprise system in order that they can establish an institutional system adapting to their development, increase their economic efficiency, enhance their competitiveness in the market, and thus, expand their share in the market further. This paper mainly consists of four parts:The first part: to introduce theories, including the connotation of China's private enterprises, the difficulties in the development of private enterprises in China, the content and framework of t enterprise system, and the life cycle theory, so that readers can have a clear understanding of relevant theories. The second part: by sorting out a large number of documents, to analyze the actual situation of development of private enterprises in China mainly from the three aspects:the property rights system, internal governance, and management systems, so that the problems of China's private enterprise system can be concluded and a solution can be proposed. The third part: on the basis of second part, by combining with life cycle theory, to take the enterprise system as a dynamic process, establish a proper system based on the actual development of the various stages of the enterprises, and determine the priority of system construction in each phase, and finally, to force private enterprises transit gradually from their start-up of the Family Governance to a the modern enterprise system.The forth part:The development of private enterprises in China is not only restricted by their own system construction, but also by external environment factors. To construct enterprise system better, the external environment must be optimized.This section mainly analyzes focuses the deficiencies on three aspects of the financing environment, legal environment and the integrity, and meanwhile makes some suggestions to optimize the external environment.