Reshaping corporate core capabilities

Although the economy is moving out of recession and recovering, large enterprise groups still face severe challenges.

First of all, it is a serious challenge brought by “de-globalization”. The export recession will likely subvert the economic structure of China’s high degree of foreign trade dependence, and the chain will cause a series of serious problems such as overcapacity in domestic production, weak manufacturing investment and unemployment.

Second, corporate group mergers and acquisitions are facing challenges. Chinese companies often find it difficult to achieve synergies in mergers and acquisitions because of challenges in organizational structure integration, operational system integration, and cross-industry integration.

Thirdly, the integration of enterprise group resources faces challenges. When Chinese enterprise groups begin to seek breakthroughs and upgrades in the global industrial chain, the low allocation of human resources, the inefficient allocation of capital resources, and the unreasonable allocation of asset resources have become bottlenecks.

In addition, corporate group risk management faces challenges. Enterprise groups have entered a more uncertain era. This risk must be presented to decision-makers in the form of continuously quantified indicators and a set of mechanisms must be established for management and control.

Finally, enterprise groups face challenges in performance evaluation. The value production capacity of human capital is the basis for the long-term sustainable development of enterprise groups. To improve the value production capacity of human capital, it must be accompanied by an effective performance management system.

To meet these new challenges, Chinese enterprise groups must achieve transformation and upgrading. The transformation means that the company's development strategy shifts from being a factor-driven to an efficiency-driven one. It drives the development of the enterprise by increasing the productivity of people, the productivity of equipment, and the productivity of capital and capital; upgrading means that the product system is originally in the value chain. The low end advances to the high end of the value chain. In terms of transformation and upgrading, enterprises generally require more sophisticated management capabilities to build a more agile business system.

This kind of fine management ability is reflected in the enterprise group, that is, the enterprise group must establish the core competitiveness through effective group control. Because enterprise groups integrate industrial chains across the country and even globally, and directly participate in cross-border, cross-regional or even cross-industry industrial chain competitions, enterprise group companies often use capital as the link, property rights as the basis, and management rights for group members. This means that the enterprise group must be able to exercise control over the strategic, financial and operational aspects of the member companies. Otherwise, it will not be able to create and enhance the core competitiveness of the entire group. From another perspective, with the promotion of global economic integration, enterprise groups are getting closer to the market with increasingly flat organizational structures and processes, and external supply chain management is also being integrated across regions and even the world. These open changes have increased the flexibility of enterprise groups to adapt to market competition, but at the same time they have also increased the difficulty of coordination of horizontal management, and may even create coordination risks. Therefore, to achieve a coordinated economy has become the current implementation of corporate group management and control objectives, and based on collaboration is the fundamental strategy of corporate group management and control.

In order to compete in the globalized industrial chain and achieve transformation and upgrading, Chinese enterprise groups must be able to obtain strong technical support in both effective management and coordination of the economy. This means that it must have a management system and business for the group. The system is effectively integrated and integrated to improve the overall resource allocation of the group and reduce the overall cost of the group. To achieve this goal, we must rely on the strength of information technology, through the platform to integrate and integrate the group's business and applications, is the future development trend of corporate group transformation and upgrading. Therefore, for group companies, the integrated management, coordination, and integration management platform will become a powerful information management infrastructure that supports the rapid, healthy and sustainable development of enterprise groups, and can promote the scale and profitability of enterprise groups. On the basis of better control of corporate risks and comprehensive enhancement of the international competitiveness of corporate groups.

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