Corporate Governance Case_Correlation between Corporate Governance and Corporate Management

Abstract: Straightening out the relationship between corporate governance and corporate management is the key to enterprises maintaining lasting vitality. The two are interdependent but different. There are relevant overlaps between corporate governance and corporate management, but the modern enterprise system determines that they are separated from each other. The overlapping points between corporate governance and corporate management are constantly changing. As the internal and external environments of enterprises are constantly updated, the two need to be adjusted in a timely manner to achieve a new balance.

Keywords: Corporate governance, corporate management relevance

CLC classification number: C931 Document identification code: A Article number: 1007-3973 (2012) 007-142-03

Under contemporary social and economic conditions, the global diffusion of economic activities and the context of global integration, market competition has become increasingly fierce and its impact has become stronger. Many small and medium-sized enterprises have fallen like meteors without experiencing much development. Even some large companies that were once glorious are also doomed and destroyed overnight. The fundamental reasons for this result are: first, corporate suicide; second, multiple internal and external factors such as errors in judgment and decision-making, environmental changes, and corporate suicide contribute to a greater proportion of the final devastating outcome. The root cause of all kinds of suicidal behavior is nothing more than improper handling of corporate governance issues and company management issues. The relationship between the two often highlights the potential conflict between operators and owners. So how should the relationship between the two be handled during the growth of the enterprise? Look at those enterprises that are in the natural selection of "survival of the fittest and survival of the fittest". Although they are ups and downs, they can constantly adjust and surpass themselves and maintain their vitality forever. We will get such a certainty, that is, Although corporate governance and corporate management have different importance at different times, they have received attention at different levels and periods. Timely coordination and reasonable integration of them is the root of the sustainable development and longevity of enterprises. The assumption of rational people, that is, the pursuit of maximum profits, is not regarded as the main source of motivation for development or the only goal pursued, because only when the enterprise develops and grows, and with the carrier of the enterprise, can its ultimate goal be achieved.

1 The connotation of corporate governance and corporate management

In classical enterprises, the owners of the company are its managers, and there is no separation between owners and operators. With the advent of technology, With the progress and development of the country, the form of enterprises is also gradually evolving. Especially with the development of socialized large-scale production and market economy, the establishment of my country's modern enterprise system has made the issues of corporate governance and company management prominent. First of all, we need to understand The main focus of corporate governance and corporate management.

1.1 The connotation of corporate governance

The British classical political economist Adam Smith can be said to be the pioneer of corporate governance theory. He pointed out in "The Wealth of Nations" that joint-stock companies Managers who use other people's money instead of their own cannot be expected to manage the business with the vigilance of partners in a private company. These words of Adam Smith actually go to the heart of corporate governance. question. Some scholars have also expressed emotion about this issue: If guests from other planets are allowed to judge only by the personal behavior of company personnel, without first letting them understand the legal provisions, there is no doubt that they will regard the company's senior managers as Be an investor or owner of the company.

In modern times, we do not yet have a definite answer to the connotation of corporate governance. In this way, different people will give different definitions due to different emphasis or different perspectives. Some people regard corporate governance as a system that guides and monitors the company; some people regard it as a method to ensure investors' return on investment; some people call it corporate supervision (based on the level of supervision and prevention of corruption). ); some people connect it with corporate management and call it the company’s comprehensive management; in fact, the definition of corporate governance in a broad sense should include the relationship between various participants within the company, including shareholders, board of directors, management Layers, employees, customers, etc. However, no matter how the definition changes or how different it is, the purpose of corporate governance is to achieve effective supervision by monitoring and balancing relevant stakeholders, thereby improving the overall operation of the company, achieving the company's ultimate goal, and at the same time realizing the company's social responsibility.

Our country began to study corporate governance issues because of the outbreak of the Southeast Asian financial crisis in the 1990s. At that time, our country’s economic system was transforming from a planned economy to a market economy. People gradually realized that the Asian financial crisis had In essence, it is a crisis of corporate governance. After a company is listed, if there are serious problems in corporate governance, the interests of the company's investors cannot be effectively satisfied. At this time, investors will not wait with peace of mind, let alone devote themselves to long-term investment, and will turn to short-term investment. Hype, short-term speculation leads to the generation of speculative bubbles, the market will be fully distrustful and full of turmoil, and when the bubble finally bursts, an economic crisis will ensue. After that, our country began to devote itself to establishing a modern enterprise system. Although our market economy is not mature enough, as we study and explore the corporate system, corporate governance is becoming more standardized and improved.

Generally speaking, if the research scope of corporate governance is defined as studying the relationship between owners, boards of directors and managers, we can equate corporate governance with corporate governance structure, and corporate governance structure is the The reflection of the mutual relationships, status and role of the parties involved in governance issues (i.e. stakeholder parties) and their agents in the internal operations of the enterprise. It concentratedly shows the principal-agent relationship between enterprise stakeholders and their agents within the enterprise; corporate governance structure is an organizational system arrangement and a relationship contract between the parties involved, which is a static requirement. , but lacks a dynamic supervision mechanism. If corporate governance is viewed as a set of legal, cultural, and institutional arrangements regarding a company's ownership and interest distribution rights, then these arrangements determine how the company's interests, risks, supervision, etc. are reasonably distributed among different members.

1.2 The meaning of company management

Management originated from the collective labor of human beings. It appeared earlier than the emergence of enterprises. It will continue to develop and improve with social progress. , management is an essential element in all organized, purposeful and practical activities. A company is a place where people work together to create wealth. Management, as an indispensable element, occupies an important position in the company's organizational activities. Our modern enterprise system requires the establishment of modern enterprise management to guide and standardize the management of enterprises, promote the economic and technological progress of enterprises, improve the economic strength and scientific and technological competitiveness of enterprises, and further occupy more market shares in order to achieve The ultimate goal of the enterprise.

The company’s corporate culture is intangible, it is the cognition of ideological forms. If you want to embody it, you can only operate it through certain practical activities and specific behaviors. If you do not make this intangible thought Once cognition is put into practice, this management concept can only be reduced to an abstract consciousness and empty discussion. This ideological management concept has been transformed into a set of normative institutional systems through operation, so that all the company's chairman, general manager, and middle-level and grass-roots managers can deeply perceive and abide by regulations and constraints. The company Both group behavior and individual behavior in the company can be guided and restrained, so that the company can get rid of random and short-term business behavior and provide institutional guarantee for the company to maintain lasting vitality and vitality. Company management is to achieve this purpose And there is a code of conduct.

Generally speaking, company management means that under the conditions of market economy, the company will focus on its current strategic goals and formulate a series of rules and regulations to reflect the system concept and overall optimization requirements, so that management can Talents, management organization, management methods and management means are organically combined to form a complete modern company management, thereby creating the best economic benefits.