The Research Of Enterprise Group Control System Based On Related Diversification Strategy

Enterprise Group was seen as an important form of organization, because in the process of allocation of resources, it can create the so-called "1+1> 2" increment effect. However, during the process of diversification in the Enterprise Group, the subsidiaries are at the distribution of different industries, areas and at different stages of development. How to effectively integrate the subsidiaries is a universal problem that not only troubles the enterprise group anagers in China, but also plagues the enterprise group managers all over the world.The object of study in this paper, Sichuan XX company is an enterprise group that was formed in the process of restructuring of the provincial geological survey institutions. The company’s development strategy is:within the next five years, based on the existing core business, to create a chain of three interrelated industries, steadfastly follow the road of related diversification. However, in the process of constant development of the company, the control mode in the subsidiary was basically taken from its parent company. In other words, the parent company basically adopts the way of the past management of the business sector to manage the subsidiary. In addition, the management functions and service functions of the parent company have very vague boundary. It is not clear when to perform management functions, and when to perform service functions, which leads the subsidiary confusion in the operation and management process.To solve the problems faced by the company Sichuan XX company in the field of management and control, the study of this paper set the subordinates Shudong Geological Exploration company as the target, draw on the resource-based theory, value chain theory and the Balanced Scorecard method, analyzed the four core issues, such as the management and control model, the functional status of the parent company, the powers and responsibilities of the system as well as subsidiaries in the parent-subsidiary performance evaluations. Related research conclusions are:first, Sichuan XX company should use the operator-controlled control mode; second, Sichuan XX company should assume control of the 5 operational functions:strategic management, asset management, financial control, human resources management and operational coordination; the third, a total of 52 specific permissions has been cleared between Sichuan XX compmay and its subsidiary; fourth, monthly, quarterly and annual performance appraisal process and index system were initially established.Related research conclusions of this paper can provide certain reference for related diversification strategy implementation process of the enterprise group’s management and control system design. But this paper only focused on one problem in the reform process faced by the geological survey institutions enterprise. For the operation and management after the enterprise reform, there is much issues that worth deep research and be conducted by other theoretical workers and management practitioners.