Financial Management of Enterprise and Construction Group

Abstract: In order to mobilize the enthusiasm of its subsidiaries, to play the advantages of group companies, this paper discussed the current status of the Group to start enterprise management, enterprise group discussed the Financial Management and gives the Construction Financial Management Group a few points for reference.

Keywords: business groups; Financial Management; model

in the past planned economy, China is relatively simple corporate finance activities, Financial Management is a passive implementation of the national financial system. However, in the market economy, enterprises should become an independent market player, it must be placed in the heart of Financial Management. Large enterprise groups as a representative of a country's economic strength in the national economy occupies an important strategic position. But with the expansion of enterprise groups, financial management, the difficulty increases. Research to adapt to the requirements of modern enterprise management mode of financial management, deepening financial reform, building compatible with the enterprise system of financial management, improve financial management, which for the current establishment of the socialist market economy and improve, and the establishment of modern enterprise system and development are of great practical significance.


I. Status of enterprise financial management

market economy, with business expansion, organizational structure more complex, on the one hand to the unprecedented development of enterprise groups development opportunities, making enterprise groups increasingly showing a large asset size, capital chain of long, wide span of control, the advantage of wide geographical distribution; the other hand, the increasing complexity of financial management, financial monitoring efforts to weaken to the financial management of the a lot of difficulty. At present, the company problems in the financial management mainly in the following areas:
old concept, not scientific. As a long time to implement the planned economic system, part of the Group's finance staff in thinking by the old long-term impact of the financial system, financial management lags behind the concept, yet to establish Zhuru risk value, the opportunity cost of financial management and other scientific concepts.

Financial control over centralization and decentralization in the coexistence of excessive, over-centralization would subsidiary lack of initiative, enthusiasm, loss of vitality; the separation of powers is another major risk of excessive financial resources will group dispersed, management control, resulting in respective ineffective corporate control, it is difficult from a strategic height of the overall development of the Group to the unified arrangement of investing and financing activities.

Lack of supervision. Since the implementation of the new accounting system, on the whole, basically to achieve the desired effect. However, due to distortion of the Group accounting, financial management is in chaos, in particular inadequate financial supervision, resulting in landslides and assets of the Group great loss of efficiency.

Specialization and diversification of business strategy has always been the coordinated management of important issues need to first determine, under different orientations content and methods of enterprise financial management are quite different. However, there are the blind implementation of the company there is a wide range of business trends, leading to confusion in the financial management of the company.


Second, the enterprise financial management

enterprise financial management are the following types:
(a) Centralized Centralized Financial Management Financial Management
is a "vertical" mode of management, financial management decision-making power concentrated in the parent company, subsidiaries, entitled to only a small part of the financial decision-making power. Production and operation of the parent company assigned the task, and to control the direct management of a subsidiary production and operation. In a way, is only equivalent to the parent company of a subsidiary directly under the branch or branches, the investment function entirely focused on the parent company. This management model has the advantage: ease of command and unity of financial policy arrangements, reducing administrative costs; is conducive to the financial control function to play the parent company, the implementation of the control of subsidiary companies to ensure corporate financial goals within the group consistency, enterprise Group maximum benefits; is conducive to play the role of the parent company financial experts to reduce financial risk and operational risk subsidiaries; is conducive to enterprise group finance, group by virtue of its assets and reputation advantages, take a variety of financing channels, to ensure that the Group's sources of funding smooth, uniform transfers of funds group, lower cost of capital, investment funds focused on the strategic direction of adjustment.

However, due to high concentration of financial management authority to the parent company, easy to dampen the enthusiasm of a subsidiary operators, inhibit the flexibility and creativity of its subsidiaries; each member financial decisions require adequate information on business basis, possible decisions low efficiency, making the stress is concentrated in the parent company, once the decision is wrong and will result in huge losses.

(B) decentralized financial management
decentralized financial management model is the subsidiary of the parent company does not interfere with production and business and financial activities, retaining only the significant financial issues of its subsidiaries or approval decision-making power rights and to build up their own independent decision-making, independent business, independent management and independent accounting of the financial system. This management subsidiary of the advantages of behavioral response to market quickly and easily capture the profit opportunities; to reduce the use of financial authority and bureaucratic blindness, improve accuracy and efficiency, reduce the parent company's financial risk. The disadvantage is the parent company of the subsidiary property rights can not be effectively used to monitor the situation, subsidiaries agents may start from the self-serving side, damage the economic interests of the client, resulting in more affiliates to the neglect of local interests to pursue the overall interests, not conducive to the integration of resources and the use of the parent company. The model is generally applicable to the capital and the Group's operating large-scale enterprise group; African subsidiaries of the Group member companies more; implementation of business diversification strategy of the enterprise group.

(Iii) Centralized and decentralized management style blending
Centralized and decentralized management are the two extremes, the extreme centralization of power, will inevitably lead to the rigidity of the financial mechanism of the Group. Opposite extreme of decentralization, will control the state of subsidiaries in over-pursuit of positive interests of the Group's overall interests. Hybrid management model is based on centralized and decentralized basis to criticize and learn to set a property right configuration. The model is distributed under the guidance of the Group headquarters management, parent company to implement a unified accounting system, a clear allocation of financial rights and benefits, is divided into two management accounting bodies, emphasizing the separation of powers based on the centralization of power. Parent company, focused primarily on the issue of centralized direction, a subsidiary of the specific matters of emphasis on results can be decentralized control, but does not control the whole process, but the selective control of major issues. The Financial Management Group, parent company of both the financial control function to play, a subsidiary operators to stimulate enthusiasm and creativity, and it helps to overcome the over-centralized or decentralized manner defects. Links to Research Papers Download http://www.hi138.com