Study On Financial Distress And Countermeasures Of New Oriental Enterprises Under The Policy Of "Double Reduction"

Since the founding of the People’s Republic of China,the profit attribute of the market-oriented operation of out-of-school training institutions in primary and secondary schools has been controversial.In recent years,with Yang dongping education experts represented by the scholars believe that the outside training institutions for the education of ecological deterioration effect,especially after the outbreak of various agencies sell by malicious parents anxious marketing model,expand the enterprise market share,has a serious run on public education,it is necessary that the training institutions to ban to outside.In fact,since the emergence of out-of-school training market in primary and secondary schools in 2008,the state has successively issued various policies to regulate the training market,but it has always addressed the symptoms rather than the root causes.Since 2018,the signal of tightening supervision on the out-of-school training industry of primary and secondary schools has become obvious.The state is determined to vigorously clean up the industry violations,but various institutions ignore the policy risks,still stepping on the policy pressure to increase investment,malicious marketing to seize the market.Especially after the outbreak of the epidemic,the off-campus training market,which is under the influence of capital,is in chaos.It has completely abandoned its public welfare attributes and become a tool for capital to pursue profits.The policy supervision of off-campus training institutions is imminent,which is widely expected.Finally,on July 24,2021,the "double reduction" policy officially landed,the primary and secondary school off-campus training business and profit attributes completely decoupled,the education and training industry to take the strongest supervision,but also education to educate the nature of education.The introduction of the policy directly led to the compliance risk of New Oriental,the industry leader whose main business is the off-campus training business of primary and secondary schools,falling into financial difficulties and being forced to adopt strategic transformation.A number of education and training industry managers,including New Oriental,have always believed that the introduction of the policy is a "willful" behavior,trying to cover up their failure in strategic risk management,indifference to policy risks and lack of risk warning management.Based on the policy background of "double reduction" policy,this paper discusses the financial distress of New Oriental enterprise,and deeply analyzes the real causes of financial distress in the way of case study.Through layers of peeling back to the level of strategic risk management,which is also one of the innovation points of this paper.This paper first reviews the literature related to financial distress and the profitability attributes of off-campus training institutions.It includes the following four parts: the definition of financial distress,the causes of financial distress,the coping strategies of financial distress and the controversy of the profit attribute of off-campus training institutions;Secondly,after summarizing and analyzing the literature,combined with the strategic adjustment process of New Oriental enterprise,this paper gives the definition of financial distress and the analysis of the characteristics of financial indicators to judge financial distress.In addition,through the analysis of various financial indicators of New Oriental enterprise,summed up the specific performance of New Oriental enterprise in financial distress.This article from five aspects in-depth analysis of New Oriental enterprise financial distress behind the cause.It mainly includes: the managers’ neglect of policy risks,the failure of enterprise strategic risk management,the serious defects of risk early warning system,the triggering of compliance risks after the promulgate of "double reduction" policy,and the discussion of the current hot Oriental selection and transformation.Finally combining the genetic studies have shown that it is because of new Oriental enterprise managers for tighter policy signal indifference,lack of keen consciousness of risk prevention,risk management system and risk early warning mechanism can be evaded,under the multiple reasons caused the enterprise facing policy,directly triggered the compliance management risk,was forced to cut off the main business was in financial trouble,Urgent strategic transformation.Through this research,this paper hopes to put forward several constructive suggestions for New Oriental enterprises undergoing difficult transformation:Collect funds,stabilize cash flow,retain faculty,avoid brain drain,shift business focus,accelerate strategic adjustment,strengthen Oriental selection of supply chain management,beware of secondary trigger compliance risk and strengthen strategic risk management,establish an effective risk warning mechanism.