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Incomplete contract theory based on the enterprise 's economic significance of corporate culture

Author: ZhouXiaoKe
Tutor: DingWeiMin
School: Tianjin Normal University
Course: Political Economics
Keywords: enterprise contract enterprise culture incompleteness uncertainty organizational efficiency
CLC: F270
Type: Master's thesis
Year: 2008
Downloads: 142
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Abstract


This paper takes enterprise culture as research object, analyzes the economic significance of enterprise culture to enterprise organization on the basis of the incompleteness theory of enterprise contracts. Seen from the theoretical and practical perspective, enterprise contracts are incomplete. This paper holds that such incompleteness of enterprise contracts decides behavior uncertainty of members in the enterprise organization. Based on the review and evaluation of the incompleteness theory of enterprise contracts, this paper defines enterprise culture as informal system arrangements that reduce behavior uncertainty in the enterprise organization, and suggests that the economic significance of enterprise culture to enterprise organization lies in using informal system compensate for the limitations of formal system, which in order to reduce the inherent behavior uncertainty of members in the enterprise organization and to enhance organizational efficiency and performance level.This paper points out that the internal mechanism of enterprise culture impact on enterprise organization mianly include information, encouragement and coordination. In details, enterprise culture can compensate for the deficiencies of asymmetric information which exist objectively through the subjective positive transmission of information, compensate for the deficiencies of material incentives by using the inherent and spiritual pursuit to motivate the behavior, and compensate for the behavior defects which are caused by hierarchical control and coordinate through common values and norms as well as the cultivation of a trust-based relationship. Then, the paper presents an analysis of the economic significance of enterprise culture by "double-team model", summarizes and analyzes the core points of this paper by using a mathematical method. On the basis of the above analysis, the paper defines what is effective enterprise culture, and gives explorations on how to build an effective enterprise culture from such aspects as the timing, the active cooperation with the formal system and several key links.In this paper, the main innovation lies in estabilshing the analysis of the economic significance of enterprise culture on the foundation of the incompleteness theory of enterprise contracts with the guidance of Marxism, and using the analytical tools of modern western economics. Furthermore, in the content, the paper study enterprise by deviding its members into production team and management team, and proposes a "double-team model" with a view to deepening the understanding of the economic significance of enterprise culture.

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CLC: > Economic > Economic planning and management > Enterprise economy > Economic theory and methods
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