Open AccessTHE INFLUENCE OF MANAGEMENT POWER ON ENTERPRISE PERFORMANCE
Author(s) -
Xin Zeng
Publication year - 2021
Publication title -
the euraseans : journal on global socio-economic dynamics
Language(s) - English
Resource type - Journals
ISSN - 2539-5645
DOI - 10.35678/2539-5645.5(30).2021.95-103
Subject(s) - shareholder , business , corporate governance , context (archaeology) , industrial organization , enterprise planning system , accounting , process management , finance , paleontology , biology
According to the statistics, from 1980 to 2017, China's economy and investment both showed a tendency of rapid growth, in which the average annual growth rate of GDP was as high as 9%. However, in the process of rapid macroeconomic growth, inefficient enterprise development is found to be hidden at the microlevel, which is caused by the agency conflict between shareholders and managers and the separation of enterprise ownership from the management board. Therefore, in pursuit of personal profit maximization, management tends to have self-serving and inefficient investment behaviors and decisions with the power at hand, thus greatly affecting the performance of enterprises. As a necessary supplement, internal control is substantially an institutional arrangement that is aimed to maximize the realization of organizational goals, coordinate and maintain the relationship of interests between enterprise stakeholders, and avoid the conflicts of interests, which is a significant component of corporate internal governance. The issue concerned in this paper is that in the context of the existing corporate governance system in China, what influence does management power have on enterprise performance? In this paper, the influence of management power on enterprise performance is empirically tested, and recommendations for effective supervision and control of management power systems are provided, as they are expected to have a positive effect on improving enterprise performance and protecting the interests of minority shareholders.