Enterprise Group Based On The Leading Actions Under The Subsidiary Internal Control Study

The history of economy and technology shows us that the improvement of large-scale socializedproduction levels and social organizing obility has promoted the evolvement and development of humansocial and economic organization’s form. Enterprise Groups, a result of productive force and technologicaldevelopment as well as a special organizational form, have important role in improving the level of societyand economy, promoting the development of national economy and strengthening the internationalcompetitiveness. As the economy develops and firm’s scale becomes larger, parent and subsidiarycompanies have become important managing form of Enterprise Groups. The system of parent andsubsidiary companies is a kind of form by which the group’s parent company manage it’s subsidiarycompanies in the base of scientific property management in order to adapt to the economic developmentand the growing scale of enterprises. In the increasingly complex and unstable externalenvironment,however,it’s hard for parent company to make decision and reaction timely instead ofsubsidiary company. In order to improve the core competive force and obtain competive advantage, parentcompany must re-examine the relationship between parent company and subsidiary companies, strenthenthe integration of internal resources in parent and subsidiary companies, and realize the whole group’sadvantage.This paper begin with the evolvement of subsidiary companies’ role, firstly introduce the root ofsubsidiary companies’ leading behavior, then demonstrate that the current mode can not satisfy subsidiarycompanies’ demand according to the relationship between parent company and subsidiary companies.Based on the governance of Enterprise Group, of Parent and subsidiary companies, this paper starts fromthe relationship between parent and subsidiary companies, and constructs the leading behavior meeting subsidiary companies from5aspects:1,sets goals of parent and subsidiary companies’ governance in thebase of the leading behavior of subsidiary companies;2,deepens parent company’s dynamic governance onsubsidiary companies;3,strengthens the degree of subsidiary companies’ leading behavior;4,constructscorporate culture condensation mechanism of parent and subsidiary companies;5,constructs effective seniormanagement team of parent company and subsidiary companies. This paper takes corporate governance asmeans, tries to find a balance mechanism of power in the relationship between parent and subsidiarycompanies for meeting the need of parent and subsidiary companies in the enterprise group.