The Research On SH Group's Management Control For Oversea Subsidiaries

With the acceleration of the process of global economic integration,many enterprise groups in China have entered the stage of making strategic layout overseas and developing in depth.Many of them are currently facing the problem of getting bigger and stronger while operating flexibly,and the lack of management ability and efficiency becomes more evident after the expansion of enterprise scale,especially after they become transnational enterprise groups.Whether the parent company can have a strong control over its overseas subsidiaries during maintaining their flexibility is the key to the company's long-term development.SH Group is a large state-owned enterprise group in Shandong province with more than 30 years of corporate history.At present,the group's main businesses include overseas investment,international contract engineering,national aid projects,cooperation and exchange of human resources,training and other fields,among which the projects of overseas investment in building infrastructure enjoy a particularly high reputation in the international market.Projects of the group have covered 106 countries and regions in five continents.As the SH group continues to speed up the process of internationalization,it has planned to increase the share of international businesses to half of the group's businesses.How to effectively manage overseas subsidiaries to ensure good and orderly cooperation between parent company and subsidiaries and rapid and steady development has become an important topic.Supported by the theories of transnational corporation governance and foreign subsidiary governance and based on the current situation of overseas subsidiaries control in SH Group,the paper analyzes problems and risks in the current control mode of SH Group.Through research and analysis,the paper argues that there are several problems in SH Group's management control,which include the lack of management control systems,imperfect parent company governance structure,lack of governance mechanisms in overseas subsidiaries,lack of control methods in parent company and subsidiaries,weak risk control capacity and others.By means of theoretical research tools and based on actual practices,this research objectively analyzes the internal and external environment and overseas subsidiaries-related management control status faced by internationalization of SH Group,targets at specific issues,pinpoints the group's development nodes,identifies potential risks and provides early warning.By referring to research results of overseas subsidiary control and combining them with actual practices,the author proposes methods of optimization and improvement for management control systems of SH Group's overseas subsidiaries:through comprehensive supplement or optimization of strategic management,corporate governance,human resources,finance,investment,risk,information,security and other aspects of overseas subsidiaries,the group will achieve the goal of effective management control of overseas subsidiaries.In the background of current economic globalization and "the Belt and Road" plan,it is of great practical value to develop a set of optimized and improved management control systems for overseas subsidiaries and introduce advanced management concepts and models in the transnational state-owned enterprise groups in China.The typical case study on SH Group in this paper will also provide references for in-depth theoretical studies on transnational governance and management control over overseas subsidiaries in large state-owned enterprises.