Chapter I
Introduction
a) background
China Publishing Group is a national publishing organization established in April 2002. With
publication production and sales as its main business, the Group is the most influential publishing
group in China, integrating paper publishing, digital publishing, copyright trade, publication
import and export trade, printing and copying, publishing logistics and distribution, art
management, translation and big data services, information services, scientific and technological
development, and financial investment.The Group has 40 publishing institutions at all levels,
including the Commercial Press, Zhonghua Book Company, Sanlian Bookstore, Xinhua Bookstore,
People's Literature Publishing House, People's Fine Arts Publishing House, People's Music
Publishing House and other publishing and cultural institutions.
b) mission
The main tasks of China Publishing Group Corporation are as follows: first, to implement
major national cultural projects, publish more and better excellent works, strengthen international
cultural exchanges and cooperation, and contribute to meeting the spiritual and cultural needs of
the peopl; Relying on scientific and technological progress, deepening enterprise reform,
optimizing resource allocation, improving intensive level, strengthening operation and
management, enhancing competitiveness, appreciating state-owned assets, enhancing enterprise
strength, and making contributions to the prosperity of publishing and the development of
publishing industry.
c) Structure of Organization——Parent-subsidiary management and control mode
There are the following types of Parent-subsidiary management and control modeof
publishing groups:
1. Administrative control type
Administrative control means that the parent company of a publishing group obtains absolute
control of a subsidiary through wholly-owned investment or merger of subsidiaries. The parent
company of the publishing group directly appoints the management of its subsidiaries and directly
controls the company's financial, personnel and business activities. In this model, the parent
company of a publishing group has direct control over its subsidiaries, and the products and
business directions of subsidiaries are set by the parent company, and all the earnings of
subsidiaries belong
Advantage ①The control distance is short, the business decisions of the parent company of the
publishing group can be implemented in the subsidiary most quickly:
②the information feedback is timely, the control is strong;
③Fewer management levels and greater management can ensure the stability and order of the
organization of the publishing group, which is easy to improve the organizational efficiency of the
publishing group;
④The parent company of the publishing group can allocate the resources of its subsidiaries most
effectively, coordinate the business activities among its subsidiaries, and have a good
organizational structure foundation for giving play to the overall strength of the parent company
and subsidiaries.
Shortcomings ①Due to the integration of assets and operations of the parent and subsidiary
companies of a publishing group, it is easy to lead to unclear property rights of the parent and
subsidiary companies, increasing the operating risks of the parent company, and the success or
failure of the subsidiary has a great impact on the parent company;
②The centralization of policy decision and operation decision leads to the weakening of the power
of the subsidiary of the publishing group, the enthusiasm and initiative of the subsidiary are
limited, and the relationship between centralization and decentralization is sensitive. Once it is not
properly handled, it will affect the coordination of the whole group organization;
③As the ownership of the subsidiaries of the publishing group belongs to the parent company, it is
easy for the subsidiaries to ignore the overall interests of the publishing group, only pay attention
to the immediate interests, and lack motivation for the long-term interests and long-term
development goals of the group.
④Due to the overlapping of management departments and too many management lines, it is easy
to lead to the functional departments of the parent company and the subsidiary of the publishing
group bickering with each other, and the management cost increases.
2. Participation control type
Participation control is an effective parent-subsidiary management mode emerging in recent
years, which refers to a parent-subsidiary management and control mode in which the parent
company of a publishing group invests and holds the subsidiary, and the management personnel of
the subsidiary invest and share the subsidiary as a natural person. In this model, the parent
company of a publishing group invests in its subsidiaries, and enables the management personnel
of the subsidiaries to participate in the shares of the subsidiaries and become the shareholders of
the subsidiaries. The board of directors of the subsidiaries of a publishing group provides an
effective mechanism for the parent company and the management of the subsidiaries to negotiate
and make joint decisions. Major business decisions of the subsidiaries are made at the board of
directors, and the management personnel of the subsidiaries are responsible for the
implementation. The parent company and the management personnel of the subsidiaries get profits
in proportion to their shares.
Advantage① The management personnel of the subsidiary of the publishing group
participate in the shares of the subsidiary and become one of the owners of the assets of the
subsidiary, which makes the parent company consistent with the goals of the management
personnel of the company. The management personnel of the subsidiary share the profits of the
subsidiary through the shares they invest, thus greatly enhancing the operation motivation of the
management personnel of the subsidiary;
②The asset relationship between the parent company and its subsidiaries is clear, and the
operating risk of the parent company is limited to the amount of capital contribution to the
subsidiaries. The share ratio of the parent company and its subsidiaries can be adjusted by
acquiring, selling and rewarding the shares of the management personnel of the subsidiaries, so as
to form an effective operating mechanism combining the capital of the parent company and the
human capital of the management personnel of the subsidiaries
③Because the management personnel of the subsidiaries of the publishing group have the
dual identity of the investors and operators of the subsidiaries, they can be encouraged to focus on
the long-term goals and interests of the subsidiaries rather than the short-term benefits, which is
very beneficial to the development of the parent company of the publishing group.
Shortcomings①In this model, the development of the subsidiary of a publishing group
depends to a large extent on the quality and operation ability of the management personnel of the
subsidiary. This "dependence" on the management personnel of subsidiaries will lead to the
weakening of the parent company's control over the subsidiaries
②Because the vital interests of the management personnel of subsidiaries are closely related
to the performance of subsidiaries, they are indifferent to the interests of other subsidiaries in the
publishing group, and the objectives of the subsidiaries are inconsistent, which is not conducive to
the overall benefits of the publishing group.
3. Platform control type
Platform-controlled means that the parent company of a publishing group invests in its
subsidiaries in the form of wholly-owned or absolute holding. The amount of investment is
generally small, and the subsidiaries become the "operating platform" of the parent company. The
subsidiaries cooperate with the subordinate product divisions of the parent company on the
"platform" according to the overall arrangement of the parent company. For the parent company to
complete specific work (such as publication processing, production, sales and other businesses),
subsidiaries are "platform enterprises" established for the specific purpose of the parent company.
This model is particularly suitable for the establishment of cross-regional publication sales system.
In order to sell its products, the parent company of a publishing group invests and establishes
subsidiaries in cities or regions outside the headquarters. These subsidiaries sell the products of
the parent company completely according to the overall arrangement of the parent company. The
business division under the parent company is responsible for implementation. The subsidiaries of
the publishing group are the "platform" of the parent company. Each publishing product business
division directly guides and arranges the sales activities of the products of the publishing product
business division in the subsidiaries. The subsidiaries accept the leadership of the parent company
in terms of administration, finance, personnel and other management, and are guided by the
subsidiaries of the parent company in terms of product operation activities. In this model, the
parent company of the publishing enterprise group controls the production, operation and
decision-making power, and the main role of the subsidiary company is to carry out market
publicity in the location of the subsidiary according to the unified deployment of the parent
company, recruit local sales personnel, carry out sales activities and provide technical services
according to the requirements of the product divisions of the parent company. Provide "platform"
services for each product business division of the parent company.
Advantage ①Due to the small investment and low management cost of the subsidiary of the
publishing group, the parent company can set up subsidiaries in various places quickly and easily
to expand the coverage of the market;
②The "platform" provided by the subsidiary of the publishing group provides a sales window
for each product division of the parent company to directly face the publication market. The
subsidiary and the product division of the parent company are coordinated within the framework
of the overall goal of the parent company, which reduces the intermediate link of product sales and
reduces the distribution cost.
③As subsidiaries of a publishing group are directly controlled and managed by the parent
company, the product division of the parent company can most directly enter the publication
market where the subsidiary is located, and the subsidiary company can also most directly feed
back the local market information to the product division of the parent company.
Shortcomings ①As the decision-making and profit center of publishing products are all in
the parent company and its product business division of publishing Group, it is easy to cause the
work initiative of subsidiaries to be insufficient, and even lead to the passive response of
subsidiaries, which is not conducive to the role of subsidiaries:
②It is difficult to truly unify the goals between the subsidiary and the product division of the
parent company, and the two sides will have contradictions, which will affect the product sales and
market development to a certain extent.
Chapter II
The state-owned enterprise
For non-socialist countries, the theoretical basis and logic for establishing and
developing state-owned enterprises are completely different from those of socialist countries.
Some Western countries have experienced two waves of nationalization in the first half of the
20th century, as well as various forms of privatization of state-owned enterprises. However,
there are still a certain number of state-owned enterprises in each country. Although the
specific reasons for the establishment and development of state-owned enterprises in different
non socialist countries are different, for example, there are ideological reasons for solving the
market failure problem of natural monopoly industries, solving the externality problem, and
preventing economic recession, the basic theoretical basis or theoretical basis for the
establishment of state-owned enterprises is mainly the "externality theory" and the "market
failure" theory.
However, it is different in the socialist county like China. In practice and theory, China's
state-owned enterprise reform and its ownership reform have never aimed at non-public
ownership. The reform of state-owned enterprises in China follows neither the theoretical
logic of mainstream Western economics nor the theoretical logic of classical Marxist political
economy, but the theoretical logic of developed and special Marxist political economy.In
China, state-owned enterprises play an irreplaceable and important role in macroeconomic
layout and industrial strategic planning. Its advantage lies in the support of government
resources and strong public interest orientation, which enables them to pay more attention to
long-term planning, technological level improvement, and development in key areas, ensuring
the effective implementation of national strategies. Their existence lies in serving the country
and its people.
The above are the differences, which might show the special features of China
Publishing Group.
So that it is obvious that to analyze the operation and advantages of China Publishing
Group is to mainly analyze its management structure based on its characteristics of
stated-owned enterprise especially in the Chinese special background.
As a very traditional state-owned enterprise, it has not yet carried out mixed ownership
reform, which also shows that the CPC and the central government occupy an absolute
position in management, in which lies the special advantages.
Its national background has determined that he has become a leading enterprise in the
field of publishing and media distribution with very clear strategic positioning and stable
business strategy. And as one of the largest publishing groups in China, China Publishing
Group is clearly positioned to leverage cultural leadership, inherit and promote the excellent
traditions of Chinese culture, and is committed to building a globally influential publishing
and media industry group. In actual operation, it adopts a stable and pragmatic business
strategy, focusing on brand building and innovation ability improvement.
A sound internal management system: State owned enterprises usually have strict
internal control systems in management, and China Publishing Group is no exception. They
have relevant system requirements in personnel appointment, financial approval, labor
employment, and project management, and review the implementation status. The existence
of these systems can ensure the normal operation and long-term development of enterprises.
Strong and stable financial support: Due to the characteristics of national ownership,
state-owned enterprises can rely on relatively sufficient financial funds to support their
research and development innovation, market expansion, and other activities. The number
publishing group can also enjoy government financial support and preferential policies, which
provide important financial support for its investment and expansion.
Special leading system.Unlike ordinary enterprises, state-owned enterprises in China do
not have true shareholders, and their property rights belong to all the people. For a long time,
there have been problems such as confusion in the principal and agent entities, complex
relationships, and lengthy chains, which have to some extent affected the improvement of the
governance efficiency of state-owned enterprises. At present, the main entrusted agency chain
of state-owned enterprises is the state-owned asset supervision and management institution
and its party committee - the enterprise party committee and board of directors - the enterprise
management layer. Among them, the enterprise party committee and board of directors
occupy a core position. On the one hand, they are the agents of the state-owned asset
supervision and management institution and its party committee, and on the other hand, they
are the principals of the enterprise management layer, playing a crucial role in connecting the
past and the future, The Secretary of the Party Committee and the Chairman, as the core
members of the Party Committee and the Board of Directors of the enterprise, are the key to
solving the problem of entrusted agency in state-owned enterprises. This is usually
summarized as the the "two in one" system for Party Secretary and Chairman of the board,
which means that the same group of people are responsible for both economic and political
tasks at the same time. It is a good way to improve the efficiency. Besides, the regulatory
function of the Discipline Inspection Commission of the Communist Party of China has
greatly reduced the risk of corruption.
Chapter III
Disadvantages and improvements
Disadvantages
1.Low efficiency
As other state-owned enterprises, China publishing group has the common
question of low efficiency. That is caused by the system of the state-owned
enterprises.
To ensure the accuracy and legitimacy of the decision, first of all, about the
architecture of the enterprise, those state-owned enterprises always have a complex
and thorough system just like the large group of management, the complex and
repeated departments.
Secondly, about the system of employment, as long as people be employed by
the enterprise through the civil service examination in China, except some special
reasons or their own willing to quit the job, those employees are hard to loss their
work whatever their work ability is. They even have their quite good retirement
benefits to ensure their life quality after retiring their work. In that case, a large part of
employees have the same opinions that they only need to finish their work at a
comfortable speed and an ordinary quality. Because of that kind of opinions, the
workers in the state-lowed enterprises don’t create such the high efficiency as other
private enterprises that pursue the high efficiency and economic profits.
Thirdly, the over-dependence of the senior leadership is also the key factor. That
means the personal quality and the level of leadership counts so much. A successful
state-owned enterprise can’t live without a distinguished leader. The leader need to
resist the temptation of illegal money and need to work hard to ensure the quality of
work.
2. Low profits
China publishing group is an enterprise that be operated by the government of
China, deciding that it has more responsibility to ford the function of provide culture
to normal people and in that case, the first aim of the China publishing group is not to
gain large plenty of profits. In other word, it doesn’t have big ambitions of making
profits.
For example , China publishing group provide text books and other additional
materials of teaching like dictionaries to students in a very low even free price. For
normal students, that decision is truly beneficial to students and decline the efficient
load of students’ family. But for the China publishing group , an enterprise, of which
the first aim is to gain profit, it is obvious a low-profit measure that go against its first
aim.
3. Low competitiveness
Like China publishing group, those large state-owned enterprises are funded by
the government, in theory, it could cause the special advantage of them that they have
sufficient budget to compete in the market, however, in reality, because of its complex
management system and its special nature of belonging to the state and being effected
by the government, it may have much longer period to finish a project, may not meet
the need of market in time and not adjust its managing strategies and models. So that
it has lower competitiveness in the competition with other private company.
4. Be effected by politic
Because of its belonging of the state, it is effected by every kind of politic factors.
Although it can concentrate all the power to achieve the big project, but it is much
controlled by the government. Firstly, the leaders in the enterprise always are
appointed by relative government. Besides, considering about too much political
factors may cause the enterprise do something that obey the rules of economic and
market regular of profit.
For example, the 18th National People's Congress of China pointed out that the
main contradiction has become the contradiction between unbalanced and inadequate
development and the people's ever-growing needs for a better life. To help solve the
contradiction, as the main state-belonging enterprise in the aspect of culture in China,
the China publishing group published large plenty of books for free, organized to hold
many lectures , only for trying to meet the spiritual and cultural needs of people and
improving the level of literature of people.
Those non-profit activities undertake its social responsibility of a state-owned
enterprise, but in fact it add no profit to its revenue.
Improvements
To improve its profits, China publishing group need to source its own special
way to improve the profits and attach more importance to the economic profit. But
because of it is a state-belonging enterprise at all, so it need to take some special
measures to gain profits, attempting to achieve the goal of gain in double aspect - the
social benefit and the economic benefit.
1. Add activity to the employees
To add activity to the employees, the enterprise need to act some bonus and
reward rules to the employees. That is decided by its state-owned nature: it can’t fire
the low-efficiency employees, and can’t improve the position or salaries casually. So,
as the only way to improve the work activity and efficiency to the workers is to
reward the hard-workers.
2. Simplify the execution system
Simplifying the execution system, it need to cut some complicated
departments, reducing some unnecessary programs to ensure the efficiency of the
enterprise.
3. Carry out mixed-ownership reform
Carrying out the mixed-ownership reform is a way to increase the profit to the
enterprise and increase the capability to face the system of social subjects with
Chinese characteristics.
Because of the China publishing group is face to the market, for adjusting the
market demand, the mixed-ownership reform could add more working fund to the
enterprise that are flexible to meet the demand of market. Also, the add of the private
companies could bring some advanced management experience, adding some fresh
blood to the company in some extent.
4. Face to the market and orientate more to profit
For an enterprise, the first goal is to gain profits. Facing to the market and orientate
more to profit doesn’t mean that the China publishing group need to reduce the
investment in the public field, but means that it should improve the efficiency of
investment using in the market field. For example, it should add more attention to the
need of market and consumers, reducing the cost of some unnecessary parts.