The definition of "strategy" is: an organization's long-term and overall planning of its development direction, road ahead and action plan in order to survive and develop in a fierce competitive environment and realize its own mission and goals.
Export-oriented and growth-oriented private construction enterprises must find out the corresponding countermeasures against the bottleneck problems in the development process and formulate their own development strategies in order to achieve sustainable development in the fierce competition and finally achieve the goal of becoming stronger and bigger. According to the development trend of construction industry at home and abroad, combined with the experience and practical bottleneck accumulated by Nantong No.4 Construction Company in the practice of becoming stronger and bigger, we put forward the following ideas on merger strategy and collectivization strategy:
Merger and reorganization strategy
The strategy of merger and reorganization refers to a strategy that an enterprise controls and influences the merged enterprise by acquiring or merging all or part of the assets or property rights of another enterprise, so as to enhance the competitive advantage of the enterprise and realize the business objectives of the enterprise.
Merger and acquisition (M&A) has been rapidly adopted by western enterprises since the end of 19, which has played an immeasurable role in promoting the formation of western multinational companies and the rapid economic development. In China, due to the long-term influence of planned economy, this development strategy has not been well adopted. In recent years, with the reform of China's economic system and the implementation of modern enterprise system, this strategy has been paid more and more attention by China enterprises. Because, in the fierce competitive environment, enterprises can only survive if they continue to develop. Under normal circumstances, enterprises can develop through internal investment or through mergers and acquisitions, but compared with the two, mergers and acquisitions are more efficient, mainly in the following aspects:
1. Merger and reorganization can win development opportunities. The operation and development of enterprises are in a dynamic environment. While enterprises are developing, competitors are also seeking development. Therefore, it is very important to seize the opportunity in the development process, and we must try our best to gain a favorable position before our opponents. If the enterprise adopts internal investment, it will be limited by the project construction cycle, resource acquisition and allocation, which will restrict the development speed of the enterprise and cannot meet the needs of competition and development; Through merger and reorganization, enterprises can expand their scale in a short time and improve their competitiveness rapidly. Especially in the case of entering a new industry, whoever takes the lead will gain advantages in raw materials, channels and word of mouth and quickly establish a leading position in this industry. Once this position is established, it will be difficult for other enterprises to replace it. Therefore, the strategy of merger and reorganization can enable enterprises to seize opportunities, win opportunities and gain competitive advantages.
2. Merger and reorganization can weaken the entry barriers of industries and regions. When enterprises enter a new industry and region, they will encounter various barriers such as capital, technology, channels, customers and experience, which not only increases the difficulty of enterprises entering this industry and region, but also increases the cost and risk of entry. If the enterprise adopts the strategy of merger and reorganization and enters the industry or region based on the merged enterprise, it can bypass this series of barriers and quickly enter the industry or region with low cost and low risk to realize the rapid expansion of the enterprise. In addition, if an enterprise merges with a foreign company in the same industry, it will bypass the geographical barrier, and its nature will be changed from the original "foreign company" to "local enterprise", and it can enjoy a series of local preferential policies.
3. Merger and reorganization can reduce the risk of enterprise development. Sometimes, enterprises entering certain industries will be limited by scale, that is, enterprises must reach a certain scale to enter this industry. If they follow this requirement, it will lead to overcapacity in this industry, causing strong resistance from other enterprises and lowering product prices. In this case, if the demand cannot be increased accordingly, the profit rate of this industry will be reduced. Entering the industry through merger and reorganization will not bring about a substantial increase in production capacity, thus ensuring that enterprises still have a large profit margin after entering the industry.
4. Merger and reorganization can promote the development of transnational operation of enterprises. At present, the pattern of competition globalization has basically taken shape, and transnational development has become a new trend of management. However, it will be more difficult for enterprises to enter new foreign markets than to enter new domestic markets, and the implementation of merger and reorganization strategy by local enterprises can not only accelerate the speed of entering new foreign markets, but also make use of the original operating system, operating conditions and management resources of the merged enterprises to lay the foundation for the smooth development of enterprises in the future. In addition, because the merged enterprises are closely integrated with the country's economy, the merger and reorganization strategy will not have much impact on the country's economy, so there are fewer government restrictions, which is conducive to the smooth development of transnational operations.
At present, merger and reorganization has become a world trend, and many advantageous enterprises have achieved faster expansion in this way. Similarly, if private construction enterprises only rely on snowballing self-development, the development speed will be very slow and difficult. In order to seize the opportunity in the fierce competition, seek rapid development and achieve the goal of becoming stronger and bigger as soon as possible, we must implement the strategy of mergers and acquisitions at the same time of self-development. The key of merger and reorganization strategy lies in reorganization. The process of reorganization is a process of forming new ideas, establishing new mechanisms and cultivating new corporate culture, and it is also a process of giving full play to the advantages and complementary advantages of the merged enterprises. Here, "mechanism determines efficiency, concept determines development, and talent determines rise and fall". The first is mechanism reorganization. According to the requirements of modern enterprise system, help the merged enterprises to establish a scientific and standardized corporate governance structure. There are two principles to be followed here: first, the "father" and "mother" who are controlled by Sijian Group should cross-graft and complement each other; The second is a comprehensive responsibility system and thorough marketization. As a result, a set of enterprise mechanism that adapts to market rules and has the characteristics of four modernizations has been innovated. The second is the reorganization of ideas. Merger and reorganization must have a process of adaptation and running-in It is necessary to instill the ideas, culture and entrepreneurial spirit of the merged enterprise into the merged enterprise as soon as possible, form new ideas, and make the enterprise full of vitality and vitality. The third is talent reorganization. The success of reorganization depends on whether talents can be recruited, attracted, retained and used flexibly.
In order to meet the needs of its own development, Nantong Sijian acquired Tongzhou Architectural Design Institute and Tongzhou Construction Engineering Quality Inspection Center in early 2004, which expanded the business scope and market field of the enterprise, quickly realized the leap from quantitative change to qualitative change on the road of becoming stronger and bigger, successfully applied for the special qualification of construction, and the comprehensive strength of the enterprise reached a new level. After the acquisition of Tongzhou Architectural Design Institute and Tongzhou Construction Engineering Quality Inspection Center, Nantong Sijian transformed them into subsidiaries controlled by the company-Tongzhou Architectural Design Institute Co., Ltd. and Tongzhou Yicheng Construction Engineering Quality Inspection Co., Ltd., which helped them upgrade their qualifications from the original B to A, and at the same time reformed the personnel and management system into enterprises, instilling the management concept, corporate culture and entrepreneurial spirit of Nantong Sijian into the merged enterprises. The merged enterprise is integrated into the Nantong Fourth Construction Project, and employees are happy and proud to be a member of the Nantong Fourth Construction Project, and consciously abide by and implement the relevant systems and regulations of the Nantong Fourth Construction Project. Nantong No.4 Construction has realized the real merger of the merged enterprises from extension to connotation.
It can be seen from the practice of strengthening and expanding Nantong's four constructions that mergers and acquisitions can enable enterprises to quickly occupy new markets, expand their scale and strength, participate in market competition at a higher level, and meet customers' needs to a greater extent. At the same time, merger and reorganization is also an effective means of industrial integration, which can change the situation that the industrial organization structure is small and complete, small and scattered. It can be seen that the strategy of merger and reorganization is a very important strategy for enterprises to seek rapid development, and it is also the first choice for export-oriented and growth-oriented private construction enterprises.
Group strategy
Grouping strategy refers to a strategy that enterprises adopt parent-subsidiary structure system and engage in business activities in the same industry or multiple industries to achieve business objectives. Both parent company and subsidiary company are independent legal entities. The parent company has the nature of a holding company and is a shareholder of a subsidiary. As investors, participating in or holding subsidiaries, each subsidiary shall operate independently and conduct independent accounting. The parent-subsidiary company takes assets as the link and implements capital operation. Group strategy is more suitable for large-scale and cross-industry enterprises.
The collectivization strategy has the following advantages: (1) Because the parent company and its subsidiaries are linked by assets and implement capital operation, the parent company can control its subsidiaries through investment or holding, and make the enterprise stronger and bigger through capital operation; (2) Because the subsidiaries operate independently, conduct independent accounting and develop independently, with little correlation, the enterprise can effectively avoid the "lose-lose" situation due to a certain failure, with good growth and stability.
Taking Nantong Fourth Construction Project as an example, this paper analyzes the feasibility and effectiveness of collectivization strategy. In order to break through the above development bottleneck and realize the real "becoming stronger and bigger" of the enterprise, Nantong No.4 Construction Company implemented the collectivization strategy. The general idea is to "split" within the enterprise, establish subsidiaries of many independent legal persons, and form a parent-subsidiary structure system with investment and holding as the link.
1. Establish a specialized subsidiary with a first-class independent legal person. Nantong Sijian has successively transformed its subordinate elevator companies, electromechanical companies, real estate companies, decoration companies, municipal companies, fire companies, architectural design institutes, construction engineering quality inspection centers and other units into professional subsidiaries with independent legal persons. Professional subsidiaries carry out independent operation and independent accounting, aiming at making the specialty specialized and refined.
2. Establish a regional subsidiary of an independent legal person. Nantong No.4 Construction Project plans to register in the market location, and set up an independent legal person regional subsidiary with first-class construction qualification, so that the enterprise can truly integrate into the local market and realize the urbanization of the enterprise; After the establishment of the regional subsidiary, it will be the cost accounting center, the dispatching center of people, finance and materials and the regional management center of the enterprises in the region, and at the same time, it can effectively improve the management level, shorten the management radius and realize the flattening of management; The parent company controls the regional subsidiaries and operates according to the standards of the holding company. The legal representative and chief financial officer of the subsidiary are appointed by the parent company, and the shareholding ratio of the senior management of the subsidiary must reach more than 40% of the total share capital of the subsidiary. Dividends of shares previously held by the legal representative and senior management of subsidiaries in the parent company were also transferred to their subsidiaries, and cash incentives were changed to equity incentives. The establishment of regional subsidiaries is mainly realized through "fission" within the enterprise, that is, the regional subsidiaries of the company are built into independent legal person subsidiaries; For the market that enterprises can't directly enter, the parent-subsidiary company structure system will be formed by merging the enterprises in this region, and the shareholding structure will be adjusted.
The implementation of collectivization strategy can solve many bottleneck problems that restrict the further development of enterprises, such as high management cost and difficult to break the protection of market barriers and local governments, and make enterprises enter the fast lane of development:
(1) The establishment of specialized subsidiaries enables enterprises to invest certain resources in specific industries and markets, which is beneficial for subsidiaries to focus on the operation and development of their specialty with the goal of "specialization and refinement"; The implementation of independent management and independent accounting will enable subsidiaries to be honed in the tide of market economy, improve management level and market competitiveness, and do their best to strengthen the industry.
(2) The establishment of regional subsidiaries has enabled enterprises to break through regional blockade and regional protection, realize the localization of operations, compete with local enterprises on the same platform, and undertake high-end construction projects. The higher profit rate of these projects has correspondingly brought higher economic benefits to enterprises; At the same time, enterprises can also enjoy the preferential tax policies of the local government, which is also conducive to improving the economic benefits of enterprises.
(3) Setting up a regional subsidiary to make the enterprise a real local company will help to introduce more local senior talents, solve the problem that the enterprise lacks senior talents for many years and it is difficult to introduce senior talents due to geographical reasons, and provide talent advantages for the enterprise to develop to a higher level.
(4) The establishment of regional subsidiaries has enabled enterprises to realize the transformation of management mode and adopt a flat management mode in organizational structure. This management mode reduces the management level, shortens the management radius and shortens the management chain, thus reducing the management cost and improving the economic benefits of the enterprise.
(5) The senior management of the subsidiary not only holds a large number of shares in the subsidiary, but also transfers the dividend right of the parent company's equity to the subsidiary, so that its economic income is more closely tied to the interests of the subsidiary; At the same time, because their voting right in the parent company's equity is still in the parent company, they have an inseparable interest relationship with the parent company; Replacing cash reward with equity reward can make the company have more funds for capital operation and facilitate capital turnover. All these have greatly improved the sense of responsibility and loyalty of the legal representative and senior management of the subsidiary.
(6) The subsidiary is an independent legal person, and bears legal responsibilities independently, thus dispersing the business risks of the whole enterprise and avoiding the unfavorable situation that one event affects the overall situation of the whole company. This is especially reflected in safety production. After the promulgation of the new "Safety Production License Law", higher requirements are put forward for safety production, and the sanctions for enterprises with safety accidents are also more severe. Nantong Sijian has "split" tens of thousands of large enterprises into subsidiaries of many independent legal persons, and will not "lose everything" because of "one careless move".
(7) After the establishment of the regional subsidiary, the enterprise has realized urbanization, which is conducive to the employees of the regional subsidiary to live and work in peace and contentment in the local area. Therefore, to a certain extent, everyone's work enthusiasm and the stability of the entire staff have been improved, so that they can better contribute to the development of the enterprise.
From the feasibility and effectiveness analysis of Nantong's "four constructions" collectivization strategy, it can be seen that the collectivization strategy can really solve many bottleneck problems that restrict the development of export-oriented and growth-oriented private construction enterprises, help enterprises jump out of the cycle of slow development, and play a very key role in making enterprises truly stronger and bigger. Due to the independent operation and decentralized power of each subsidiary, the parent company's control over the subsidiary may be weakened, which requires the head office to maintain its control position over the subsidiary, and must do its best to make important decisions and supervision to ensure the smooth and effective implementation of the collectivization strategy.
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