Study on the enterprise growth under the transformation economy environment

Since the end of the 1970s and the beginning of 1980s, with the political and economic system changes in the world, some enterprises being operated on the basis of market mechanism have emerged in the economy which once implemented the planning resource allocation (such as former Soviet Union, countries in eastern Europe and Mainland China, countries in Southeast Asia such as Vietnam). As the operation mode which complies with the market mechanism is adopted early in terms of the property right and operation mechanism, these enterprises grow rapidly under the loose regulation of the government and in the rapid development of the domestic market. However, with the competition intensified and the internationalization degree increased in the domestic market of the transitional economy, a large number of enterprises have suffered declined business, insolvency, bankruptcy or even winding-up since the 1990s. Some enterprises which grow rapidly in the 1980s are deep in the business operation crisis or even go bankrupt in the middle and later stage of 1990s. This is best demonstrated by the companies which are listed at Shenzhen Stock Exchange, Mainland China in the early stage. According to the report in International Finance News, March 6, 2002, 9 local listed companies in Shenzhen suffered losses in 2000, accounting for 9.38% of the total loss-incurring listed companies in the country in that year. Afterwards, the number of loss-incurring enterprises in 2001 increases to 12, accounting for 11.88% of the total listed companies in the country. In addition, according to the statistics of Shenzhen Stock Exchange, of the 9 loss-incurring local listed companies in Shenzhen in 2000, 6 of them undergo the system reform and are listed before 1993, and of the 12 loss-incurring local listed companies in Shenzhen in 2001, 7 of them undergo the system reform and are listed before 1993. In 2002, of the 67 A-share listed companies in Shenzhen, there are 8 ST companies, accounting for 13.43% of the total listed companies in Shenzhen. Of these ST companies, 5 of them undergo the system reform and are listed before 1993. The above cases show that those leading enterprises which achieve rapid growth through the system reform or other measures in Mainland China have encountered the sustained growth problems after a period of rapid growth. In the middle and later stages in the 1990s, referring to the U.S.A as the example, the Chinese enterprises carry out the Enterprise Reconstruction in extensive fields and begin the practices of getting rid of the crisis and maintaining the sustained growth of the enterprise. Through reconstruction, a lot of enterprises have got rid of the crisis, improved their operation results and enabled the enterprises to grow again. §The cause and mode of the enterprise growth in the transitional economy, the root cause of the crisis and the measures to overcome the crisis, as well as other enterprise management practices, have presented an inevitable research subject to the theoreticians. Meanwhile, the issue concerning whether "enterprise reconstruction" can be used as a new strategy to help enterprises to get rid of the crisis and achieve sustained growth also arises.