Case-Studies Of The MBO On F Company

After management-buyout was introduced into China, it becomed the popular choice for the reform of state-owned enterprises. According to Goverment statistics, there are about half of the state-owned enterprises,especially the small and medium state-owned enterprises,chosed the MBO method to reform. Although management-buyout is inspiration and references for Chinese corporations in deepen reformation,and it can solve the problem of the state-owned capital refund and ambiguity of property rights, but in practice, managementbuyout can’t improve all of the reformed enterprise in corporate governance.There are so many reformed enterprise failed to solve such problems:low efficiency, management confusion, contradictions, and some of them emerge new issues of corporate governance, such as A single large shareholder, major shareholders damage the interests of small shareholders and manager through the transfer of assets to obtain high yields, these problems have been plagued a implementation of MBO in the state-owned enterprises, make them difficult to survive in a complete competition market. SO we can not only focus on the process of management, but also pay attention to the change of enterprise system before and after reform, as to make them change into a modern corporate governance.This thesis chooses F company as an example to study the change of corporate governance, which is based on the theory of principal-agent, and the change of corporate ownership structure, incentive mechanism, restraint mechanism, and financial data, so as to determine whether management will have a positive impact on the corporate governance mechanism of F company. From the analysis of the results, F company had solved three prombles: one is that ambiguity of property rights; second is the state-owned capital refund; the third is government would not be responsible for the debt of the enterprises. After the completion of the reform, F company emerged the problem of insider control, senior managers lack of entrepreneurial spirit, the lack of corporate supervision system, that ultimately make the company’s financial efficiency has not been fundamentally changed. So the MBO can not improve F company corporate governance, it just let the management to change a way to continue satisfy their private interests.In order to improve F company corporate governance, I give some suggestions to F company. The suggestions are improving the power distribution and supervision, hire some professional manager,and setup a incentive scheme.