Empirical Analysis Of Influence Of Managerial Entrenchment On Sustainable Growth

Desiring for Profit growth is the nature of the enterprise. In today’s society, withthe market becoming more and more competitive, many enterprises make Profit growththeir very goal, regardless of the connotation of the growth, so pell-mell development isnot desirable. Based on a large number of studies, it could be easily concluded thattaking the wrong growth strategies will throw the enterprise into in a tight corner.Growing too fast or a lack of growth is not conducive to the development of theenterprise. Growing too fast will result in a shortage of financial resources, so theinvestment and financing capacity can’t meet the growth of the enterprise, even therupture of the capital chain, Eventually it will lead the enterprise into a financial crisisand wore still the bankruptcy, while with a much slower growth, the enterprise fundscouldn’t be fully utilized, so being eliminated or bought by a Perceptive managers is aninescapable fate. Only a benign growth can guarantee the profits increase, so as toenlarge and expand as well as maintain a long-term development of the enterprise. Thisis so called sustainable growth.Compared with the foreign countries, China didn’t pay enough attention to thestrategy of the sustainable growth which is usually influenced by many factors. Thisessay selects perspective of managerial entrenchment as the start point to study thesustainable growth. Choosing the managerial entrenchment effect on the mental processand motivation of sustainable growth of enterprises as the main line, this paper is On thebasis of summarizing and absorbing the relevant research results at home and abroad.With the help of agency theory, upper echelons theory, resource theory, I explored the mechanism influence of managerial entrenchment on sustainable growth of enterprises.Secondly, I analyzed the current situation of China’s new energy industry, With the helpof Professor Higgins’ sustainable growth model, based on the China’s new energy listedcompanies report data from2007to2012, I Explored the new energy growth of listedcompanies to find that More than half of new energy listed companies grew too fast. Inresponse to these phenomena, My article analyzed the reasons of excessive growth ofnew energy companies from a management point of view of prevention. Given theuncertainty of managing the defense measure, I put forward three hypotheses with anumber of variables, First, I selected the characteristics of the managers who influencethe management level of defensive behavior; secondly the Incentives measures faced bymanagers, third the Corporate Regulation and Supervision System. According to thefinal screening based on the selected43new energy listed companies, Combined withstructural equation, I studied the relationship between the defensive management andsustainable growth. On this basis, I further studied the relationship between the variousfactors of defensive management and sustainable growth through analysis method, I didsome explanation based on the output of empirical analysis. According to the aboveresearch results, from the perspective of managerial entrenchment, I put forward thefollowing suggestions on the sustainable growth of new energy listing Corporation:establish an effective manager selection mechanism; establish an effective incentivemechanism; enhance the board of directors of the company of internal supervisionmechanism; optimize the ownership structure; perfect the independent director system.The results shows that managerial entrenchment and enterprise’s sustainablegrowth are negatively related to each other; the Age and tenure of the manager arepositively related to managerial entrenchment, while negative to its sustainable growth;Manager’s level of education, salary, and the INDIR are negatively related to themanagerial entrenchment, while these have a positive correlation with sustainablegrowth; sustainable growth of enterprises have no significant negative correlation withmanager’s professional background and managerial entrenchment; so the originalhypothesis is not supported; Managers’ social background, and the INSTO arenegatively related to the managerial entrenchment while positively correlated with thesustainable growth of enterprises But the correlation is not significant enough the ownership concentration is positively correlated with managerial entrenchment theypresented a "U" relationship with the sustainable growth of enterprises, When theownership concentration goes small, it is negatively associated with the enterprises’sustainable growth; When the ownership concentration becomes large, it will positivelycorrelate with the sustainable growth of enterprises.