Research On The Cost Control Of Enterprise Groups From The Perspective Of Centralized Management Of Funds

Under the situation of new normal of Chinese economy and the task of reducing cost,cost control has become more important in business management.However,enterprise groups of China are big but not strong.It requires centralized management of funds to improve the operational efficiency.Cost control plays an important role in the operational efficiency of enterprise groups.Therefore,it is worth to research the topic of cost control of enterprise groups from the perspective of centralized management of fundsThere are three research questions answered through theoretical analysis and the case study of WX group:(1)Does the centralized management of funds promote cost control of enterprise groups;(2)What is the internal mechanism by which the centralized management of funds affects cost control of enterprise groups;(3)The measures for the optimization of cost control of enterprise groups under the centralized management of funds.The conclusions are as follows:(1)The centralized management of funds promotes the cost control of enterprise groups,and three types of period cost control have achieved good results.(2)The internal mechanism is:(1)Centralized management of funds promotes the management abilities of parent companies,which push subsidiaries to focus on cost control.As a result,the cost of parent companies has increased,but the overall cost level of the enterprise groups has declined.(2)Centralized management of funds promotes the improvement of the internal information environment of the enterprise groups,which strengthens the control of unreasonable cost,and ameliorates the cost structure of the enterprise groups.(3)Centralized management of funds enhances the internal funds dispatching ability of enterprise groups,which reduce the demand for external debt financing to lower the financing cost.(3)The measures for the optimization are:(1)The management abilities of parent companies can be strengthened by clarifying property rights,implementing fund budget management and performance appraisal.(2)Build an ERP system and an information communication mechanism to promote the improvement of the internal information environment of enterprise groups.(3)Standardize the cash management system for overall management of funds,and establish an incentive system to promote the internal funds dispatching ability of the enterprise groups.(4)Strengthen the training of financial talents for centralized management of funds and cost control.The research enriches the literature of "centralized management of funds" and "expense control",provides case evidence from China capital market,and has implications for Chinese enterprise groups to better control cost from the perspective of centralized management of funds.