Research On The Impact Of Management Power On Volatility Of Corporate Performance

In modern enterprises,management has an important impact on the strategic business decision-making of the enterprise,and strengthen their influence through holding shares and serving as members of the board due to the existence of the separation of the two powers,so the management is at the core of the enterprise.Therefore,the greater the power of management,the stronger the voice in the enterprise,and the more decisions made by the company reflect the management’s own wishes.Empowering management with appropriate power is conducive to motivating them to fulfill obligations and achieve the goal of maximizing maximum corporate value.However,excessive power will become a tool for management to seek personal benefits,ultimately infringing on the company’s interests.The existing literature has rich research on the economic consequences of management power,mainly focusing on executive compensation and sensitivity,corporate cash holding level,investment efficiency,etc.However,few scholars in China have included corporate performance volatility in the scope of research.Based on principal-agent theory,information asymmetry theory,management power theory and behavioral decision-making theory,the paper focuses on the impact of management power on corporate performance volatility,and adopts a combination of normative research and empirical research.On this basis,the paper further examines the differences between the power of management and the volatility of corporate performance under different marketization processes and equity nature,in order to expand the research scope of the factors affecting corporate performance volatility and enrich the economic consequences of centralized management power.The paper is divided into five parts.The first part is the introduction mainly expounding the significance,ideas and methods in the current environment.And it also reviews and comments on the relevant literature on the economic consequences of management power.The second part is conceptual definition and theoretical basis.It mainly defines related concepts such as management power and corporate performance volatility,and expounds related theories such as principal-agent theory,information asymmetry theory,management power theory and behavioral decision theory,which are the theoretical basis of this article.The third part is theoretical analysis and research hypothesis.Firstly,it describes the current situation of management power and corporate performance volatility,and then demonstrates the mechanism of management power on corporate performance volatility.On this basis,it demonstrates the role of the marketization process and the nature of equity,finally deducing the research hypothesis of this paper.The fo urth part is empirical test.This part selects 17338 observations of all A-share listed companies in Shanghai and Shenzhen stock markets from 2008 to 2017 as the research samples,and conducts empirical tests through descriptive statistics,correlation analysis and regression analysis.The fifth part is research conclusions and policy recommendations.The study found that:(1)There is a significant positive correlation between management power and corporate performance volatility.(2)According to the nature of equity,the sample enterprises are divided into two groups:state-owned enter:prises and non-state-owned enterprises.The results show that compared with the non-state-owned enterprises,the positive correlation between management power and corporate performance volatility in state-owned enterpr:ises is less significant.(3)Divided into two groups according to the speed of marketization process.It is found that the positive correlation between management power and corporate performance volatility is suppressed in enterprises with fast marketization process compared with enterprises with slow marketization process.Consequently,the negative impact of management power on corporate performance volatility should be reduced from the following aspects:1.Pay attention to the risk of corporate performance fluctuations and raise risk awareness;2.Improve the balance of management power;3.Accelerate the construction of marketization process.The research in this paper expands the economic consequences framework of management power,and provides suggestions for further improving the corporate governance structure.At the same time,this paper also enriches the influencing factors of corporate performance volatility,and provides reference value for enterprises to make more rational production and operation decisions.