On the "economic value" and the promotion of private enterprise culture

[Abstract] Based on the analysis of cultural characteristics of private enterprises to start, and according to Economic value added "of the meaning and effect, explore the" Economic value "of private enterprise culture to enhance the relevant ideas.

[Keywords:] Economic value-added features of private enterprise culture

"Economic Value Added" (Economic Value Added, referred to as EVA) is defined as in economics and economic profit, by the U.S. management consulting firm Stern • Stewart's first in 1989, private enterprises started late, small-scale, management infrastructure work is weak, imperfect corporate governance and its corporate culture but also has its own characteristics and weaknesses. Economic Value Added "performance evaluation of the impact and improvement in the culture of private enterprise to play an active role.

First, the "economic value added" role
Economic value when used in the daily management of enterprises, in addition to scientific and rational assessment of the responsibility of business unit performance, but also has the following general effect.

1. Encourage enterprises to overcome the blind investment, and establish equity capital is not "free capital" concept, the economical use of equity capital, capital structure, reasonable arrangement, which help to promote operational efficiency of capital. Operators will start thinking like a business owner , equity capital is no longer considered "free capital", they no longer seek to pursue the short-term profits, and began to focus on the long-term business goals and the goal of maximizing shareholder wealth consistent focus on efficient use of capital and cash flow increases, EVA in order to improve business performance and the quality of corporate culture.

2. Helps to enhance and improve the corporate culture of private enterprise. Economic value added to today is not just a performance evaluation of the indicators, but also a business effectively promote and enhance corporate culture means. And the traditional financial indicators, compared with two advantages: First, consider the cost of capital, the cost of performance and resource-linked from both output and cost effectiveness evaluation in decision-making, expanding the scope of performance evaluation, the department consistent with the overall interests, incentive management for the ongoing efforts to maximize shareholder value; the second is the cross of the cost of the project to make proper adjustments to make better long-term and short-term interests of the coordinate to overcome the short-term effects of decisions, in line with the largest equity of the requirements. Therefore, EVA is <<Fortune>> magazine called "today's hottest financial idea."
Second, the current characteristics of China's private enterprise culture
1. Private enterprise culture is the boss will culture. The culture and the experience of operators of private enterprises related to the operators of many private enterprises, with a unique trick of success, such as their risk tolerance is particularly high, or good at seizing market gap, or technical innovation ability, or have a strong financing capability, or a group of people trying to conquer, and so good at driving. These unique capabilities, so that they formed after the Nuggets invincible self-confidence, while likely to have Xin Fu Gas manic state of mind. private enterprises of all property owned by the boss, though with a lot of management, hired talent, but the boss is often pre-empt, often develop grassroots like leapfrog reporting, something not functional decisions, the boss of a person having the final say style. In this culture, the boss will is the absolute will of the company, almost no one can have an impact on his decision, resulting in the business of "gigantism", "King disease" and so on, but the boss that will result in the overall management of enterprise and innovation is difficult to improve, leading to (investment) decision-making and behavior unscientific nature of the examination results of the operator with greater discretion. that the will of the boss if there are problems, then lost business the way forward.

2. Private enterprise culture is courageously fighting culture. Most of the grass-roots private enterprise was born, it can be hard, hard work. Traveled thousands of miles, endured hardships, tried every means, is courageously fighting culture of private enterprise expression. in private enterprises in Wenzhou, Zhejiang Province, spread the words, "not only wear shoes, but also to wear sandals." For companies to survive in the cracks, they tirelessly; to an invincible position in the competition, their full spell hit.

3. Seize the opportunities of private enterprise culture is culture. Many private business owners, is through to seize opportunities, sudden fortune. Boss crazy work, can quickly aggregate resources to business goals has become simple and easy to operate, staff formed hard-working, quick-drying and more dry style, the rapid formation of the primitive accumulation of business. reform and opening up, China's social and economic life indeed there were many opportunities for development, who caught who will be able to win. At this time, the majority of private enterprises to use their own system and mechanisms of superiority, again and again to seize the golden opportunity for enterprise development, to enable enterprises to stand in the forefront of our market economy. This culture is reflected in enterprise development, often expressed as a "good" project to the , regardless of whether they have the ability to invest in the development and strength, regardless of whether the scientific feasibility of the tight (especially financial feasibility study).

Links to Research Papers Download http://www.hi138.com 4. Private enterprise culture is the emphasis on feelings of culture. Many private enterprise culture with the family instead of rules, its business management from the complex kinship structure, which violates the management guru Peter Drucker said, the family business to survive and maintain the effective operation of the senior management staff, no matter how many family members, no matter how good they are, at least required a non-family members. Private enterprise Zhuchong folks , acquaintances, friends, so that the management has the irrational and backward, hinder long standing problem of management, enterprise management system useless. This culture is reflected in the daily management to replace the system performance of the emotion, intimacy and trust in relationships instead of indicators of assessment, can not do an effective system of equality before the implementation and system.

Private enterprise culture of these features had to adapt to the market environment in the short term, but growing fast and changing economic and market environment, the gap widened. With China's entry into WTO, domestic international competition, domestic competition, international of private enterprises as an important force in the Chinese market, but also need to find relevant ways to nurture and enterprise development as soon as possible to adapt the corporate culture.

Third, the "economic value added" applications to improve and enhance the impact of private enterprise culture
Nobel laureate in economics, the famous economist Robert Solow • new study: "a new global economic competition has started, the future will emerge the winner, will be the first to spy and be able to comprehend the new rules of the game of individuals, businesses or country. "This is a reminder for us. the effective application of" economic value added "approach, private enterprises can improve and enhance the culture of the following effects:
1. Help build awareness of intensive management, economic use of capital. Capital investment activities of investors and the amount of shares of enterprises according to the control of important economic resources. In the past including private enterprises, all enterprises will be those free use of capital, did not mind the concept of cost of capital, therefore, in some private enterprises, there has been any increase limits the amount of capital, or repeated additional equity capital. you know, equity capital is money, and This resource for any financial enterprises are limited, scarce. for payment of the capital investment from its own capital, but also consider the opportunity cost of capital, to use the "economic value added (EVA)" The concepts and methods. economic value of this indicator is an objective evaluation of corporate capital gains over capital (debt capital and equity capital) costs are the difference between the size of the standard in Western countries has been widely used. we have to establish that concepts and using this method can not be considered equity investment is not the sale, without any cost.

2. Helps to motivate operators to deduct the cost of capital after the relentless pursuit of the "added value" and fulfill the responsibility administered. At present, the business values of many of the long-term course of business in the spontaneous, unconscious form, with the experience of color monotonous fragmented. Some enterprises, though the text of the proposed business philosophy, entrepreneurship, business and values, but often with the identical, imitative, the lack of unique character and adaptability, it is difficult to implement.

3. Help build awareness to maximize shareholder value, try their best to complete fiduciary responsibility. In the share of the corporate enterprises, the managers in their daily business activities as an agent in seeking to maximize shareholder interests, which is in line with the company the purpose and ethics. In the present state of society, most merchandise has exceeded demand for a certain amount of profit is not easy. unless his company's products in a monopoly on, it can get huge monopoly profits. However, due to a market economy, this boom will not be long, and soon there will be many competitors swarm, so that the average profit rate tends to become the average profit, then, do you want to get more profits, or is to increase sales or reduce costs. In this process, we have to heart to a thought, use the 'economic value-added "performance appraisal, so that the interests of shareholders and other stakeholders can maximize the benefits .

Be better if the role play, will on the basis of the existing features, greatly facilitate the evaluation of the performance of private enterprises to further rational and scientific decision-making, courageously fighting, good Seize the Opportunity and harmonious unity, so that private enterprises have a healthy and positive corporate culture to ensure the fast development of enterprises.

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