Analysis of the conglomerate's financial management

Paper Keywords: Group factors affecting corporate financial management
Abstract: corporate financial management enterprise group selection is the key to the healthy development of the present, the vast majority of enterprise groups in China are in early stages of development, its current enterprise financial management system is not perfect, there are organizational unreasonable financial system is imperfect, and many other issues. This group will affect corporate financial management and analysis of the factors.

First, the conglomerate's financial management types
Enterprise financial management is clearly the financial level of the Group's financial authority, responsibility and interests of the system, the core issue is how to configure the financial management authority, including the right financing, investment and profit distribution rights and other rights, among which the distribution of parent company between the financial power to the main content. between parent and subsidiary rights in accordance with the size of the main Centralized, decentralized and intermediate modes only, as shown:

(A) centralized financial management model
The model is a completely vertical mode, the vast majority of financial power concentrated in the parent company, subsidiary of parent company to take strict control and unified management centralized features are: financial management decision-making power is highly concentrated in the parent companies, subsidiaries entitled to only a small part of the financial decision-making, production and marketing of their property and for a unified control by the parent company, subsidiaries, capital raising, investment, asset restructuring, loans, distribution of profits, expenses, wages and bonus distribution, finance staff appointment and removal of other major financial unified management by the parent company issues the parent company is usually assigned the task of production and operation, and to direct management control of a subsidiary's production and business activities in a way, is only equivalent to the parent company of a subsidiary directly under the branch or sub- company, the investment function entirely focused on parent companies normally set up in the group not accounted for the center, through reimbursement center to address the uniform reimbursement, uniform balance of payments problems.

Centralized model has the advantage: that will help the parent company's capital and financial regulatory function in the specialized division of labor within the group according to the requirements of the major investment decision-making power concentrated in the corporate headquarters, ensure that the Group focus on spending, optimization of resources and reasonable configuration; help to ensure and achieve the Group's overall business development objectives, maximize the benefits of enterprise groups; through the Group's products and organizational structure of the overall optimization, reducing regulatory costs subsidiary, easy to achieve economies of scale; conducive to financing decisions, Group assets and credibility by virtue of its advantages, take a variety of financing channels, sources of funding to ensure the smooth flow of the Group. drawback of the model: First, the relative independence of the subsidiary property right can not be respected, will dampen the enthusiasm and creativity of its subsidiaries; two is easily lead to the use of financial power away from the actual bureaucratic tendencies, as well as the misuse of financial power; third is a subsidiary of flexibility is poor, can not respond quickly to market, once the headquarters of making mistakes, a subsidiary of the project can not be adjusted, resulting in a subsidiary over-reliance on the parent company.

(B) decentralized financial management model
The model refers to the subsidiary corporation owned subsidiary of territory dominated by the basic property rights and the exercise of, a subsidiary of the parent company to retain only a major financial decision-making power or authority. Just some of the decision-making subsidiary, the parent company reported record results can be, a subsidiary of the relative independent, a subsidiary of parent company does not interfere with production and business and financial activities of the model is a typical decentralization. decentralized main features: on the financial authority, a subsidiary of human capital and financial investment out of the use, costs of financial balance expenses, financial personnel selection and dismissal, staff wages and benefits and bonuses, etc. have full power to make decisions based on market conditions and the company's own situation and make a greater financial decision-making; in the management of the parent company does not use the mandatory plan to interfere with production and business activities of subsidiaries, but rather to indirect management; in business and encourage affiliates to actively participate in the competition, market share; in the interests of the parent company tend to prefer the interests of a subsidiary, to enhance its strength of the General within the group established within the bank or clearing house, the enterprise or group within the daily settlement and funds transfer transactions, logistics.


Decentralized financial management advantages: have a full subsidiary of the enthusiasm, decision-making fast, easy to capture business opportunities, increase opportunities for earning profits. Relieve pressure on the parent company's decision to reduce the negative effects of direct intervention in the parent company. In contrast, the model Disadvantages: difficult to unified command and coordination, and some subsidiaries to pursue their own interests due to the neglect or even harm the company as a whole; weaken the parent company financial control function and can not find a major subsidiary of the risks and issues; not effectively bound by the operator, thereby cause its subsidiaries 'internal control people "issue, contusion, large workers' enthusiasm.

(C) the intermediate financial management
This model emphasizes the separation of powers based on the centralization of power, is a set of fund-raising, use, recycling and distribution in one, participate in market competition, bottom-up multi-level decision-making centralized mode of this model will leverage the Group's parent company financial control function, to stimulate enthusiasm and creativity of a subsidiary, but also effectively control the risk of operator and a subsidiary, will help to overcome the over-centralization or decentralization of the defects, facilitate the integrated advantages of centralization and decentralization of many companies it is the pursuit of relative group ideal model in financial decision-making power into the scope, importance should follow the principle that the decision in accordance with the funds involved in the total capital in subsidiaries, size and proportion of total income received by a subsidiary of the expected amount of revenue share, to decide whether to make such decisions by the parent company in this mode, the fund management has become an important content, namely, "capital as a link." mainly to strengthen the Group's parent company, capital raising, launch and coordinate other aspects of management. Links to free download http://www.hi138.com Second, the group of corporate financial management factors affecting the choice
(A) Group organization structure
Organizational structure refers to the standard form for the realization of the organization on various elements of the organization formed by the arrangement of combinations, that is, the various departments and levels of the organization established between a human, the relationship between people and things it points the management hierarchy, departmental structure and terms of structure enterprise financial management system is the enterprise group management system components. Enterprise Group adopted the organizational structure, will determine what financial management.

(B) the company's industry group
Group companies in different industries where its different production and management features, technology characteristics, life cycle will lead to differences in the way of its financial management. Conglomerates in various industries such as manufacturing, commodity circulation, etc., the focus of management different from its financial management will naturally show different characteristics, such as relatively stable market environment for manufacturing conglomerate, the effect of cost control is the key to its competitive advantage, and thus its cost control should be established for strict financial organization system and cost management system, while for the circulation of goods, the key to its success lies in seizing on the purchase cost, quality of service, network distribution of information timeliness. The financial organization must provide timely and accurate information as the main objectives. Set off in different sectors of business, its growth in the Group's business, trade restrictions and other aspects are different, reflected in the financial management is also different in some highly monopolized industries such as electricity, the competition is weak, financial use more highly centralized management model in the capital-intensive industries such as automotive, shipbuilding, and scale management is the key, the corresponding outstanding financial management financial management functions.

(Only) size of the business group
Larger enterprises, the demand for accounting information more intense, the accounting department to provide complete information on the more complex and this is because senior managers are increasingly distant from the site of production and operation of internal control is more dependent on the support of accounting information. Meanwhile, the financial structure tends to be complex, vertical and horizontal levels of management, department number, division of fine large organizations generally for accounting information, cost control, capital management, risk management, performance evaluation and other divided positions, while such as Shanghai Baosteel , in addition to the Finance Department, but also a separate asset management department, financial department, portfolio management department, etc. accordingly its internal coordination requirements are high, in order to achieve effective control of large organizations usually develop a detailed accounting system, accounting department will follow the system to handle the business while the effectiveness of the principle considered for small and medium enterprises, often rules and regulations, ordinances and other written documents to a minimum, direct supervision and management of people in order to achieve control objectives. large enterprises through its rules and regulations behavior of the system to enable enterprises to formalize, in order to make decentralization of management to prepare, while small businesses rely on the direct supervision of the centralization of power as the inevitable choice of business scale the proportion of accountants will make a growing trend for large medium-sized accounting work requires a high degree of specialization, demand for senior accountants, the purpose is to ensure efficiency and effectiveness of the financial organization to meet the needs of internal coordination, so in general, a higher proportion of professionals and medium-sized enterprises, and not a bad thing, this is the superior productivity of small and medium-sized business enterprises is an important performance.

(D) Group of corporate financial management skills
For a long time under the old financial system impact the Group's financial staff is lagging behind the concept, not yet establish the time value, value at risk, marginal, opportunity costs and other concepts in financial management objectives. Failed to establish its optimum awareness; in the management In practice, the lack of financing the cost of trade-offs, lack of capital structure analysis, the lack of investment risk estimates, the lack of cash flow analysis staff. enterprise financial management and accounting high degree of unity between the two main off-overlapping decision-making, not by financial and accounting categories grouped institutions that help organizations run with low efficiency and high risk. Links to free download http://www.hi138.com