Contract Device For Continuously Balancing Interests

Because of the large number of factor owners, the value orientation of each owner will inevitably conflict with each other. The value orientation of the same type of internal owners of the factor owners may be inconsistent. Can the internal control system that is built up by all elements and elements to meet the incompleteness of the enterprise satisfy the principle of maximizing the utility of the factor owners? Is there a practical efficiency? That is, whether the internal control system can protect, balance and coordinate the legitimate interests and value orientation of the owners of the elements is an unavoidable problem.

In addition, we must answer the following questions: (1) whether enterprises can identify key resource elements in the dynamic development enterprises; (2) responsible for the main input of the key resources elements, which may lead to no responsibility for other subjects; (3) the relevant input elements of capital resources may be protected by relatively complete enterprises, but shareholders can not.

All these are the weak links in the modern enterprise theory research. This article thinks that after introducing the resource structure theory, the above problems can basically be alleviated.

As before, the location of the input of different resource elements in the internal control is different. The fundamental source of power in the internal control system of enterprises is the elements invested by all the main elements in the joint production process. Whoever grasps the key elements of the survival and development of the enterprise, should grasp the internal control system of the enterprise.

For enterprises at present, the higher the marginal contribution rate of production and the greater the adhesion factor is the most important resource factor.

Then, the internal control system will first protect the interest of the key resource elements invested in the main body. If it can not first protect its legitimate interests, it is certain that the owners of the resource elements will withdraw from the enterprises, making it impossible for enterprises to create sustainable value.

If the key resources are invested in the interests of the main body, the other elements will also be required to protect their legitimate interests without being grabbed by the key players and actively participate in the internal control, and supervise and control the key elements of the input.

With the change of time, the key resources for enterprises will also become relatively non critical, not scarce, and may eventually become relatively abundant resources.

We believe that understanding

It is necessary and essential for the system to grasp the time factor and enhance it to the level of dynamic development.

From the above analysis, we can see that the fundamental function of the internal control system lies in the scarcity of resources.

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In the enterprise environment, how to set the behavior rules of the internal control subjects and how to adjust the behavior norms of the internal control entities, so that all kinds of economic activities of the enterprises can be carried out smoothly, so as to encourage and restrict various behaviors in the internal economic pactions of enterprises, reduce uncertainty and save paction costs.

In this sense, internal control is the contractual arrangement between the various control entities within the enterprise to realize the exchange benefits as a result of specialization and maximize their wealth. Its essential attribute is a contract device that keeps the equilibrium relationship of interests balanced.

That is to say, the contractual relationship of internal control stipulates the rights and obligations of each controlling body in the paction relationship, and defines what the controlling body can do and what can not be done in the paction relationship, who should be punished or compensated for violating these rules, and the criteria to judge whether the control subjects violate these rules.

Internal control is a part of private contracts derived from internal property rights contracts. Contracts are incomplete due to bounded rationality and paction costs, resulting in a "dot like equilibrium" in the evolution of internal control.

Four, when the internal control is formulated or revised, internal control is relatively static and relatively complete.

After that, with the change of situation, internal control shows hysteresis and shows dynamic incompleteness.

Revisions are made on the premise that the revised income is greater than the cost, thus showing relative completeness.

This means that we can only pursue its relative truth in this process (because absolute truth is a process without end).

At the same time, because of the system's self enhancement mechanism, the evolution of the system has path dependence, and then the endogenous institutional arrangement mechanism and governance structure are formed within the enterprise system.

Therefore, the continuous internal control of "point" is the dynamic change of internal control.