The Research On Performance Evaluation System Of State-owned Iron And Steel Group Subsidiary

With continuous adjustment and upgrading of industrial structure of the steel industry, agrowing number of iron and steel enterprises are beginning to form the enterprise groups throughrestructuring and mergering. The formation of enterprise groups is not only able to fully integratethe resources of enterprises and to play the comprehensive advantages, but also enhance thecompetitiveness of enterprises and the risk resilience. However, the formation of enterprisegroups also makes it more complex and difficult to manage the mergered iron and steelenterprises, the main reason is because that enterprise groups are composed by a number ofsubsidiaries enjoying the legal independence, whichmakes parent companies can not directlyintervene in managing subsidiaries’ affairs on many issues. Therefore, in order to maximize thebenefits of the whole group, the parent companies can only take a variety of management controlmeans to oversee and control the subsidiaries’ conduct of operations.Among a number ofmanagement control means, the performance evaluation plays on vital role，and it is not only akey tool to promote the Group’s strategic landing, but also an important means to assess thecontribution of the subsidiaries. Therefore, the research on performance evaluation system ofsubsidiary has a very important significance for improving the performance management systemof state-owned Iron and Steel Group subsidiary andstrengthening the management control of thesubsidiary.Based on the review of theories and analyzing the situation, the balanced scorecard theory isused to build performance evaluation model from four dimensions that is financial, customer,internal operations, learning and growth in this study, the content of this evaluation modelincludes profitability, customer management capabilities, ccollaborative capabilities,procurement capacity, risk control ability and resources to support capacity and etc. Then,comprehensively considering the affect of parent-subsidiary management control mode andsubsidiaries’ industry characteristics for subsidiary performance evaluation, the author designsseven categories of performance evaluation index systems on subsidiaries, which includes themain steel business of listed companies, the merger and reorganization of iron and steelenterprises, development or exploitation of resources, international trade, steel extensionmachining,high-tech and logistics.Finally, the effectiveness of the index system is demonstrated by the empirical study, andthe author lastly puts forward suggestions for applying evaluation index system, includingimproving the budget management system, setting up a specialized subsidiary performanceevaluation working group, establishing subsidiary performance appraisal dynamic managementmechanism, strengthening communication between the corporation and its subsidiaries.