Author/Reprinter: Wei Tuo Training Release Date: June 30, 2004 12: 59: 53.
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Centralized or decentralized?
The third issue of Sales and Market 1998, June 29th, 2000, by Zhou.
When the enterprise scale develops to a certain stage, the conflict between scale and efficiency becomes increasingly obvious. At this time, centralization or decentralization? It has become an unavoidable complex problem in marketing management.
Two extreme examples
There are two extreme examples in the enterprises I have contacted:
Example1:Company A is a township enterprise that produces food. Its boss used to be the deputy director of the propaganda department of the county party Committee, so he abandoned his official position and went to sea. Maybe he's obsessed with power, or he's not very comfortable with salesmen. Anyway, when the salesmen were going to war, he repeatedly told them to report more, otherwise they would be at their own risk. Therefore, the salesmen stationed in other provinces are cautious one by one for fear of doing something wrong. One day, a long-distance call came back, "Yang Zong, 300 yuan/month housing can not be found, can you rent a set of 400 yuan/month housing?" No matter big or small, I will ask for a return. Without the boss's consent, they dare not make their own decisions. As a result, capable marketers feel that their hands and feet are firmly tied, and they can't be strong, so they jump ship and find another job; The remaining salespeople follow the rules, but have no initiative, which means that one party hits the other and the sales performance is extremely unsatisfactory. And the boss is busy all day, hundreds of thousands of advertising fees disappear like fairy tales, and good enterprises are in an uproar.
Example 2: Group B is an influential private enterprise, and its liquefied gas stove has won a national patent for its high combustion efficiency. The president is an expert in science and technology. He applied the flexible mechanism of private enterprises to the extreme, that is, let marketers contract the market of each province. The company signed a contract negotiation with each marketing staff, and the products were provided to the marketing staff at 20% of the ex-factory price. How many sales tasks do marketers guarantee to complete in one year? As for who to hire, how to promote sales and how to operate the market, the contractor is responsible and the company does not interfere. This move has really greatly mobilized the enthusiasm of marketers. Everyone did their best. In just a few years, the company has achieved sales of hundreds of millions of yuan and created several millionaires. Unfortunately, the good times did not last long. Faced with fierce market competition, the market position has lost. Wealthy marketers don't want to go to war and become bosses in other places, but the company can't take over the market, because retired marketers continue to control the market and continue to make profits through their own cronies; The company can't cancel the positions of those salesmen whose sales tasks are not ideal, because he holds the loan and controls the marketing channels; What's more, a salesman thinks that "the sky is high and the emperor is far away". While selling the company's genuine products, he privately set up an underground factory to make fakes and made a fortune. When the company found out, he had absconded with the money every day. As a result, a promising enterprise was tossed dry.
It can be seen that in the marketing management system, "once released, it will be chaotic, and unity will die" is a very easy phenomenon. So, how can we "release without chaos, unify without death"?
Advantages and disadvantages of centralized system and decentralized system
To answer this question well, let's first compare the advantages and disadvantages of centralized system and decentralized system.
Centralized system means that all decision-making power is concentrated at the higher level, and the lower level must act in accordance with the decisions and instructions of the higher level; Decentralization means that subordinates have the right to decide what to do and how to do it independently within their jurisdiction, and superiors do not have to interfere.
1. Advantages of centralism: ① unified government orders and standards, which is convenient for overall planning; (2) the commander, the command is easy to implement; (3) Conducive to the formation of a unified corporate image; ④ It is easy to form an overwhelming momentum; (5) It helps to concentrate on dealing with the crisis.
Disadvantages: ① it is not conducive to personality development and fails to take into account the particularity of things; ② Lack of elasticity and flexibility; ③ Poor adaptability to external environment; (4) Dependent thoughts are easy to occur at lower levels; ⑤ Subordinates are unwilling to take responsibility.
2. Advantages of decentralization system: ① It can develop personality and specialty according to local conditions; (2) Being able to respond quickly to changes in the external environment; ③ Subordinates can work independently, which is easy to arouse their enthusiasm; (4) the benefits of maintaining the flexibility of small enterprises; (5) It is beneficial to cultivate a group of backbones.
Disadvantages: ① Excessive decentralization of power can easily lead to disunity of government decrees; (2) Subordinate for local interests, regardless of the overall interests of the company; (3) At a low level, a strong centrifugal force is generated; (4) the effect of coordinated operations is offset; ⑤ Poor ability to cope with difficult situations.
From the above comparison, we can see that the excessive concentration of marketing decision-making power will inhibit the marketing vitality of enterprises, bind the hands and feet of marketers, and eventually lead to the decline of overall combat effectiveness; Excessive dispersion will make the marketing team like a runaway wild horse and bring the enterprise to the edge of fracture. Biasing to any extreme will make the trains of enterprises deviate from the normal track. This requires us to find a suitable balance point, so that the advantages of centralized system and decentralized system complement each other and reach the highest level of the Pearl River Delta.
Follow two principles
Obviously, centralization and decentralization are a pair of happy and unfair families, which are contradictory and inseparable. How can we resolve the grievances between them and let them play the greatest overall coordination effect? To achieve this goal, there are two principles to follow.
The first principle: strategic centralization and tactical decentralization.
When discussing the command principle of guerrilla warfare, Mao Zedong said: "On the one hand, we oppose absolute centralization, on the other hand, we also oppose absolute decentralization. What is correct should be the strategic centralized command and decentralized command in campaigns and battles. " This principle, which shone with wisdom in the war years, still has a strong practical guiding significance for today's marketing management.
Webster's Dictionary defines strategy as "the first, universal and lasting important plan or action direction for the organization as a whole." The basic strategy of an enterprise includes three aspects: first, the basic purpose, mission and belief of the enterprise; The second is the external strategy of the enterprise, which refers to products, services, markets, sales channels, public relations, corporate image design, etc. The third is the internal strategy of the enterprise, which mainly refers to the enterprise system, organizational structure, management style, resource allocation, leadership and encouragement. From the perspective of the strategic golden triangle, the role of strategy is to track the changing trend of market demand and find opportunities that are beneficial to me and unfavorable to competitors. According to the enterprise's own resource conditions and capabilities, it focuses on establishing advantages over competitors at some key points, discovering and attacking competitors' weaknesses, while hiding its own disadvantages and avoiding competitors' advantages, so as to increase its chances of success. In order to realize this function, enterprises are required to allocate their limited resources to those key areas (or means) that can establish or give full play to their competitive advantages, and pay attention to coordination with other fields and take strategic actions in time. For example, Red Heart K Group launched a massive "poverty alleviation project" in the national market, which formed a powerful market shock wave of unified action.
Only by being unified, coordinated and centralized in strategy can we ensure "neck and neck". For all strategic matters, subordinates must report to their superiors and accept their instructions in order to obtain the benefits of concerted action. However, if we stop here, it will interfere with the specific operations of subordinates, such as how to carry out promotion activities and how to arrange personnel, and there will be "blind command". Because these specific affairs must be decided according to the specific circumstances that change at any time and place, and these changeable and ever-changing specific circumstances are unknown to the head office far away from the post. At this time, the principle of tactical decentralized command was applied. One of the reasons why TCL Electronics Group can be popular all over the country in just a few years is to give full play to the subjective initiative of the marketing branch. Under the strategic intention of the headquarters, these regional marketing managers creatively fought a tough market war.
The second principle: a flexible staggered system that varies from situation to situation.
The division between centralization and decentralization of enterprises should not be fixed, but should change according to the changes of internal and external situations of enterprises. The key to contingency thinking is that "the soldiers are divided and gathered, and each is expensive and appropriate" (see "Li Weiguo asks the right"). How to determine the appropriate point of centralization or decentralization?
1. When the change of market environment tends to be unfavorable, or the enterprise changes due to external reasons, or the enterprise needs to concentrate its resource advantages to deal with strong competitors, it is suitable to give priority to centralization. For example, during the period from 1945 to 1952, in order to cope with the post-war chaos and depression, Panasonic dissolved the business department of the Panasonic Empire and then took all the functions and powers into its own hands. During this period, in addition to serving as the chairman, he was also in charge of the advertising department.
2. When the market is in a booming state, or the external environment is favorable to itself and it is in the territory of "outnumbered", it is appropriate to give priority to decentralization. At this time, we can give full play to the enthusiasm of our subordinates in order to win more market opportunities and seize more market share. During the period from 1953 to 1955, Panasonic felt it necessary to respond flexibly to each market, so the era of decentralization came. At this time, he not only set up an independent product improvement team, but also increased the autonomy of the independent marketing department.
Panasonic's first collection and then distribution are all taking advantage of the trend and achieving great success. It can be seen that when enterprises are centralized and decentralized, they must be flexible according to the changes of internal and external environment in order to be invincible.
The success of decentralization lies in control.
With more and more enterprises, the demand for decentralization of marketing management system becomes more and more urgent. The expansion of enterprises needs the great help of decentralization system. However, the decentralization system is a "rose with thorns", and its inherent defect is that once each business department or marketing branch obtains greater autonomy, it is very likely to run counter to the head office, so the benefits brought by the decentralization system will be completely offset. Therefore, if there is a lack of appropriate control means, it is impossible to divide power, otherwise it will be difficult to clean up the mess if something goes wrong.
We can use three efficient control systems at the same time to ensure that the huge enterprise empire is full of vitality and will not fall apart.
1, financial control system. When a financial center is set up in the head office, the chief financial officer becomes the "third restriction" of the boss. During the war years, Mao Zedong successfully realized the "Party Command Gun" by "establishing a branch in the company", which effectively prevented a few people from escaping with guns or setting up another hill, and enhanced the cohesion of the Red Army. By the same token, enterprises effectively monitor the possibility of marketing generals absconding with money through independent financial systems. The specific operation is as follows:
(1) Transparency of marketing expenses. In order to cope with regular advertising promotion activities, the marketing expenses of the factory are quite frequent. -On the one hand, we should fully authorize each branch to be responsible for procurement and negotiation; On the other hand, we must ensure that the purchase price is reasonable. Enterprises can fundamentally plug the expense loopholes through the "real market price test". For example, Zhu San Company stipulates that all expenses of its branches must indicate the source, and then send supervisory cadres to negotiate the price as customers. If there is moisture in the spot check, the parties concerned will be severely punished. This kind of follow-up investigation has effectively curbed the crooked thoughts of marketers.
(2) Internal accounting of a large number of transactions. On the one hand, each business department will return 60% of the pre-tax profit to the head office every year and deposit it in the "internal bank" established by the enterprise. These funds will be used to pay the personnel expenses of financial management, product system management, research and development and product design, as well as to invest in other new industries for the head office; On the other hand, branches can apply for loans from internal banks, but they have to pay interest as usual. If they fail to repay the loan on time due to poor management, the head office will charge a nominal penalty interest. Similarly, the monthly sales paid by the branch company to the head office shall not exceed 30 days, and the overdue fine of 3‰ shall be added for the excess. It can be said that in order to control the blind expansion of advertising expenses and the timely withdrawal of loans, the head office is under great pressure from branch managers.
2. Personnel control system. Mao Zedong pointed out: "After the political line is determined, cadres are the decisive factor." Therefore, Mao Zedong believes that the two main functions of leadership are to give advice and use cadres.
(1) Establish a dual command mechanism. The manager of the finance department of the branch directly reports to the chief financial officer of the head office and is responsible for the supervision of the general manager of the branch. If the financial manager thinks that the budget or expenses of the branch general manager are not well thought out, he must report to the chief financial officer of the head office. Junior staff must obey the orders of the two leaders at the same time, that is, be responsible for the business department at the next higher level vertically and be led by the general manager of the branch horizontally. In this way, the dual command mechanism realizes the functions of personnel containment and linear equilibrium. This can reduce the decision-making mistakes of the branch company and prevent it from deviating from the normal track of the head office in time. This dual command mechanism belongs to the matrix organizational structure. See the figure below:
(2) Choose the right marketing general. "Sun Tzu's Art of War, Tactics and Raiders" wrote: "He who can defend himself wins." It explains the benefits of decentralization, but also points out that the prerequisite for the success of decentralization is "will be able to". If you will be incompetent, it is better to have no power than to delegate. "Zhuge Liang Chopped Ma Su with Tears" is about Zhuge Liang's improper employment, and he sent a wayward horse to the street pavilion, which led to his fall. Business leaders should clearly know the advantages and disadvantages of each marketer who will be entrusted with an important task, understand the characteristics of each marketer, and appoint a suitable position. In Panasonic Group, there is a proverb: "incompetence is a stumbling block to the success of any enterprise." Of course, to identify a marketer's ability and quality depends not only on his time and events, but also on all his experiences and work, so as not to bury talents or ignore things.
(3) Pay attention to the assessment and training of marketing personnel. Enterprises should regard salesmen as the main resources of the company, which is an investment with the greatest risk and the highest return. On the one hand, if the violator is killed, a hundred will be refunded; On the other hand, the personnel department should focus on the assessment and reward system for marketing personnel. Performance is the main criterion for the promotion of marketers, which is the most powerful management tool. Every level of marketing personnel has quantitative performance indicators, and the treatment and promotion of marketing personnel depend on their work performance. This will motivate marketers to do their best to create good results. Equally important is the training of marketers. As the saying goes, "Carve wood without carving, you can't do anything." All marketers have to receive two special trainings, one for basic skills and the other for enterprise spirit. For example, through various forms such as reciting the company's creed in the morning meeting, it is constantly instilled and imperceptibly instilled, and gradually develops a sense of identity and belonging to the enterprise. Build a solid line of defense in the hearts of marketers, train "ordinary people into extraordinary people" and let them consciously resist the destructiveness of the decentralization system.
3. Plan reporting system. "Everything is established in advance, and if it is not planned, it will be abolished." Marketing organizations at all levels should make short-,medium-and long-term plans. In these plans, plans should be made for sales revenue, profits, accounts receivable, market share, after-sales service and advertising promotion. A good plan is the beginning of success. Of course, there is only one plan, and if you don't carry it out seriously, it will still be empty talk. Therefore, the implementation progress of the plan should be tracked and evaluated every month. These plans are very fixed, continuous and powerful, which can keep marketers as enthusiastic and energetic as entrepreneurs. For example, the monthly sales tasks assigned by Zhu San Company to its branches are divided into three levels: one is to guarantee the bottom, the other is to strive for the task, and the third is to sprint the task. The proportion of bonuses drawn from each level of tasks is also different. The higher the task completion level, the greater the reward range. If the tasks are completed well this month, the number of tasks to be assigned next month will increase. Therefore, some people say that Zhu San's sales revenue has been "squeezed".
When there is a gap between the actual performance and the planned target, the general manager of the marketing branch has to call his staff for urgent consultation, find out the crux of the problem and propose a solution. Because not finishing the task not only means that everyone will starve, but also it is difficult to keep the position of manager.
Commitment and decentralization of government regulation
Government intervention is considered as a means to solve externalities and redistribute wealth among economic people. In other words, government intervention can improve Pareto. Even in the case of incomplete market or asymmetric information, government intervention can still be effectively allocated under certain constraints, which is the so-called suboptimal allocation result. The government can do better in improving commitment and decentralization, and minimize transaction costs by reforming government regulations or establishing new systems.
Keywords: government regulation; Commitment; Decentralization; transaction cost
When the information is symmetrical, the Coase negotiation within the government will make the distribution of control rights meaningless, that is to say, no matter how the control rights are distributed, it will lead to the same Pareto distribution result, and the internal organization of the government will not have any influence on the result of government intervention. We know that in reality, there is more information asymmetry. Under the condition of asymmetric information, transaction costs will have a real impact on resource allocation. The potential impact of transaction costs depends on the degree of information asymmetry when the government intervenes. . In addition, because different systems are accompanied by different transaction costs, there is the possibility of optimization between different regulatory systems.
In enterprise theory, according to Williamson's point of view, the optimal enterprise structure should minimize transaction costs. Along the same route. The optimal supervision system should minimize the transaction cost of signing supervision contracts. Because the contract itself is incomplete, this incompleteness stems from the fact that it is difficult for any government to make a commitment to the next government, the lack of unified leadership or the existence of multiple clients, and the regulatory decision-making is bought and manipulated by interest groups, so it is necessary to adopt a suboptimal method, or only compare another suboptimal system with a certain institutional arrangement, rather than the optimal institutional arrangement. The advantage of this analysis method is that it is more practical because the starting point of analysis is to admit that the contract is incomplete. Generally speaking, this analysis method is very useful for understanding the internal organization of the government. Some discussions here are only conducted from two aspects: improving commitment and decentralization of government control, and more are the remarks of academic masters.
1 improvement commitment
When designing a supervision system that can minimize transaction costs, we must first seek an institutional arrangement to ensure that all parties to the contract can make commitments in the contract. Because the contracts concluded between enterprises, regulatory agencies, administrative and legislative bodies are very incomplete, there will be many cases in which the contracts are not clearly stipulated, so there will be many opportunities for renegotiation. Therefore, the design of renegotiation rules is very important to improve the efficiency of commitment and even contract execution. In addition to renegotiating laws and regulations, the right balance mechanism mentioned below is also an effective means to improve commitments.
Renegotiation and decentralization
There is a very famous conclusion in political theory and industrial organization theory, that is, the decision-making rules and the design of negotiation process in the renegotiation stage can improve the commitment. In the negotiation process, a special institutional arrangement is the decentralization of different regulatory agencies, that is to say, the renegotiation process involves several regulatory agencies. So, what is the significance of this decentralized structure for improving commitments? The following two results will prove that the decentralized structure can be used as a tool of commitment. From the existing literature, many people consider why decentralization is needed from the perspective of agency. For example, Olson and Toswick (1993) consider the situation of no commitment ability at all, while Martimo analyzes the situation of renegotiation.
No commitment: In Olson and Toswick's model, they assume that the government cannot make any commitment to the future regulatory contract, so the regulatory contract is limited to the current regulatory cycle. This commitment ability is an extreme case of incomplete contract, which can be understood in many ways. For example, the law stipulates that the regulatory agency can only have a limited authorization period, or stipulates that the regulatory agency cannot conclude a contract restricting this behavior in the future regulatory cycle. The law may make such a provision because it is difficult to describe future events in advance, or the regulators lack the necessary political independence to make commitments. Under the assumption of this incomplete contract, they proved that it is more important to allocate control rights to two regulators than to concentrate all regulatory rights on one regulator. The main reason is that if the decentralized structure is implemented, the output of enterprises will be controlled by these two regulatory agencies at the same time. The consequence of this regulatory complementarity is that every regulatory agency wants to take a ride when providing incentives for enterprises, so the rent allocated to enterprises in the second contract stage will be excessively reduced, or the intensity of incentives will become very low; On the other hand, lower incentive intensity or less information rent will reduce the motivation of high-efficiency enterprises to hide private information in the first contract, so they are willing to show more private information, which may increase the total welfare. This means that the benefits of decentralization in the second stage (the improvement of allocation efficiency in the first stage) should be compared with the costs brought by competition among regulators in the second stage and the costs brought by low allocation efficiency.
Olson and Toswick then extended their analysis to situations where there are more than two regulatory bodies. They proved that there is an optimal degree of decentralization in the design of supervision system, or there is an optimal number of supervision institutions that control an enterprise. It is not difficult to see that the more decentralized the regulatory power is, the higher the cost caused by the inefficiency of static configuration and the greater the dynamic benefits brought by the improvement commitment. Therefore, the number of optimal regulators depends on the trade-off between static efficiency loss and dynamic efficiency increase.
Renegotiation: Martimo [2] pointed out that in the renegotiation stage, decentralization can be used as a tool of commitment. For example, the decentralized structure can be used as a signal that these uncooperative regulators will take a tough stance in the renegotiation process. Generally speaking, it is easy to understand that renegotiation afterwards can improve allocation efficiency, but the problem is that when renegotiating the original contract, hitchhiking between regulators is likely to make this efficiency improvement difficult to achieve. If this is the case, then the decentralized structure actually improves the government's commitment. It is worth noting that in his model, only in the renegotiation stage will decentralization bring about the increase of total welfare, and according to the requirements of optimal regulation system design, in the initial stage of regulation, the regulation contract should be provided in a cooperative way, that is, decentralization will not be carried out at the beginning of contract implementation. Such a regulatory system may seem strange or even unrealistic. For example, the newly established regulatory agency can be interpreted as: because the past system design is not completely reasonable, the new regulatory agency is only a response to emerging problems, not necessarily the result of reasonable system design. In fact, he proved that if decentralization is also carried out in the first stage, the level of social welfare will be reduced.
In addition, in the process of renegotiation, regulators may need to intervene in an orderly manner, which can improve the allocation efficiency. For example, the federal government can be a pioneer in renegotiating regulatory contracts, and then local governments can provide supplementary regulatory contracts. In the real world, there are many corresponding examples of this institutional framework. In short, although there may be some doubts about decentralization as a tool to improve commitment, from the results so far, there is indeed a very close relationship between decentralization structure and commitment.
1.2 checks and balances mechanism
In many cases, when the main reason is lack of commitment or incomplete contract, both parties to the contract cannot conclude a contract based on a certain variable in advance. This variable can often provide a signal indicating the performance of the enterprise, but the problem is that this signal may only appear in the execution stage of the contract. For example, when concluding a contract, it is impossible to know in advance the future profit level or product quality of the enterprise.
Establishing different regulatory agencies with different target functions will increase commitment. When this signal reaches different values, these regulators will intervene accordingly. For example, when obtaining the evidence that enterprises overcharge consumers, the regulators who mainly care about the remaining consumers will intervene; However, when the project cost exceeds the expected value, financial institutions concerned about the profit level of enterprises (producer surplus) will intervene, such as stopping the implementation of such projects.
According to the different values of the after-the-fact signals, the distribution of supervision power among the regulatory agencies with strong or weak characteristics can improve the ex ante incentives of enterprises, thus improving the total social welfare level. Decentralization of two authorized regulatory agencies in different authorization periods. Given the missions of different regulators, they explained that since the funds of each regulator are controlled by different institutions, it is impossible to pay funds from one authorization period to another. This form of decentralization is very helpful for protecting the investment in special assets of enterprises.
Because different regulators have different reactions to the information they get, the objective function of regulators has become an important tool to control enterprise incentives and regulatory intervention incentives.
1.3 Independence of political clients and regulators
The above discussion is limited to assuming that political clients are doing good deeds, and they can't make promises on their behalf. In this case, it may be beneficial to divide social welfare functions or allocate regulatory authority among different regulatory agencies. But if the political client does not maximize the social welfare function, then such a conclusion may not be obtained. Suppose the political client is not good, so he can't make a promise. Although the political clients elected at this time can't promise the future regulatory control right, because they enjoy the majority of voters, they can often establish independent regulatory agencies through legislation, and at the same time give these points certain rights and responsibilities, thus improving the commitment ability of the entire regulatory system. Of course, these institutions can still represent these voters because they may be defeated in future elections. In fact, many such examples can be found in the regulatory environment, but the most famous one is probably in the macroeconomic field. For example, in the United States, in the central banking system, regardless of the future government's preference for inflation, handing over the control of monetary policy to an independent central bank (Federal Reserve Bank) is actually a way for the government to promise its preferred monetary policy to the future public. From the perspective of employment, it is beneficial to the society to establish an independent regulatory body and give them corresponding authorization, because in this case, the regulatory decision can represent the interests of the majority and make the interests of the minority feel that they can be protected to a certain extent. Therefore, while establishing an independent regulatory body with similar objectives and functions, a government that does not do well is actually creating its own competition with itself.
1.4 credibility of government regulatory commitment
In the previous discussion, we can find a very important problem, that is, these models assume that the commitment of political clients to establish a regulatory agency and bear the corresponding management costs is credible to all parties in the regulatory game, or that the objectives and responsibilities defined by this regulatory agency will not change in the future, so the system design is credible.
Obviously, the credibility of decentralization between different management institutions can be proved by standard arguments such as credibility. According to this thinking, because these regulators are long-term insiders, under certain conditions, regulators can achieve their preferred regulatory (cooperation) results, or the results of decentralization can become credible. However, we can easily see that this argument is not too strict, and it has at least two defects: first, if the regulatory agencies should first be able to establish the credibility of not renegotiating any regulatory contracts, if they can establish such credibility or promise not to renegotiate, then they will lose the significance of the existence of the decentralized structure; Secondly, the regulator itself may indeed be a long-term player, but how did the regulator form, especially when they have different preferences for the regulatory mechanism, and how to understand this collective reputation?
2. Decentralization of government supervision power
In fact, political scientists have long recognized that the establishment of checks and balances is an effective way to prevent excessive concentration of power in the hands of decision makers who do not do good things. Lafon and Martimo [3] established a model to study this problem. They believe that the decentralization of regulatory agencies can be used as a promising means to prevent regulatory buy-offs. For example, the control right of enterprise output can be allocated to the Commercial Committee and the Environmental Protection Committee, which helps to prevent the supervision process from being bought by enterprises. Their explanation is that because each organization with a specific mission can only control one aspect of the manufacturer's performance, their ability to extract rent from enterprises is weakened by incomplete information. Because if the regulators are integrated, they can observe all the information about the performance of manufacturers, so they will have greater bargaining power in the collusion game. When the regulatory power is in an integrated state, the efficiency of collusive trading is very high, and the society needs to sell a lot of purchase costs. However, if there is information asymmetry between regulators and manufacturers because of regulatory decentralization, it will weaken the ability of the former to extract rent from the latter. In fact, information asymmetry means that the transaction cost of purchase will increase, so introducing competition between regulators with different information can reduce the purchase cost borne by society. In this sense, decentralization can be used as a means of commitment to prevent regulatory buy-off.
2. 1 Efficiency of decentralization and its impact on rent distribution
The impact of decentralization on efficiency and rent is often unclear. Generally speaking, some interest groups may regard decentralization as a way to escape the control of regulators. In this regard, Lafon and Martimo proved that efficient enterprises can benefit from competition among regulators. Their basic idea is this: efficient enterprises can gain trust by using regulators who can't cooperate with each other according to their private information.