In the article "The Essence of Enterprises" published by 1937, Coase explained the definition and boundary of enterprises through transaction costs. Coase believes that the organizational cost within the enterprise is lower than the transaction cost in the external market. Therefore, "enterprise organization" saves part of the market operation cost, thus producing the organizational form of enterprises. Stimulated by the pursuit of profit maximization, enterprises are bound to expect to expand the difference between external transaction costs and internal transaction costs, which means the continuous expansion of enterprise scale. The continuous expansion of scale will also bring about problems such as efficiency decline, marginal cost increase, marginal income decline and diminishing management income, thus offsetting the benefits brought by scale and creating enterprise boundaries.
From this, we can realize that the emergence of enterprises and the determination of enterprise boundaries are a product of "balance" and the result of changes in two forces. As mentioned above, the expansion of scale has increased the saved transaction costs, but as the other side of the contradiction, internal management efficiency and organizational costs are weakening the advantages brought by transaction costs, and the final result is that they reach a balance at a certain point and form the boundary between enterprises.
Oliver williamson's "Constraints of Enterprises: Incentive and Management Characteristics" published in 1985 describes another "balanced" picture of enterprises. As Coase said, under the stimulation of profit maximization, enterprises have a strong motivation to expand indefinitely. So, what is the ultimate reason for determining the "equilibrium state" of each enterprise? Williamson believes that when asset specificity is not significant, the fundamental limitation of enterprise scale is determined by the governance cost disadvantage of internal organizations. Williamson analyzed the balance of enterprise's infinite expansion motivation from two angles: incentive and administrative characteristics (administrative cost). First of all, whether under the high-energy incentive or low-energy incentive, enterprises need supervision departments and employees to restrain their behavior, which is the balance between incentive and control in enterprise internal management. If there are only incentives, departments and employees will desperately consume equipment and increase their immediate income. Therefore, control and restraint must be added to form an interactive and supportive relationship to ensure the realization of organizational goals. Secondly, the administrative characteristics of enterprise internal behavior will produce certain administrative costs, thus weakening the competitiveness of enterprises. The larger the enterprise scale, the higher the degree of integration, the more obvious these administrative characteristics are exposed, and the higher the administrative cost, which restricts the expansion of enterprises. In a word, Williamson described another essential feature of the enterprise from the perspective of incentive and management characteristics-the enterprise is a balanced body.
Zhang Wuchang pointed out in the article "Contractual Nature of Enterprises" published in 1983 that enterprises are a form of contractual arrangement. The simplest understanding is that in the case of private ownership of productive inputs (private property rights), the owner entrusts the right to use inputs to an agent through some contractual arrangement in exchange for certain income, which leads to the emergence of enterprises. To say that "enterprise" replaces "market" means that the piece-by-piece contract of production factors replaces the market contract of product trading. In addition, the transfer of rights must be at the expense of a certain return. The contractual nature of such enterprises is essentially the arrangement and balance of responsibilities, rights and interests of all owners, such as the coordination of agency and control, ownership and management, input and output and other related interests.
In the article "Production, Information Cost and Economic Organization" published by arman Aircin and harold demsetz in 1972, the balance of this economic organization of enterprises is explained from the perspective of team production. First of all, from the perspective of team production efficiency, in order to effectively motivate team members, it is necessary to make the remuneration of workers as balanced and symmetrical as possible with the prime minister of labor production. Secondly, from the lazy phenomenon in team production, it is necessary to supervise the production of team members. This is also the result of contradictory balance. Thirdly, according to the contract structure defined by the essence of classical enterprises, every team member signs bilateral contracts with the owners of enterprises, forming an employer-employee relationship, which builds a balanced system between owners and employers, and between capital and labor.
In the treasure house of many classical theories of enterprise management, we can find that enterprises are in a balanced state, such as expansion and constraint, gain and loss, incentive and control, rights and obligations, input and output, authorization and supervision. To maintain this balanced state, it is very important for enterprises and their managers to balance their ideas, art and management.
Balance operation in management practice
In actual enterprise management, organizations are faced with increasingly complex external environment and more flexible internal environment. An excellent manager should flexibly use the idea of "balanced management" and play the role of generalist and balancer.
1. On the balance between employee employment and democracy
The most striking feature of the traditional Taylor management model is that the enterprise is regarded as a big machine, and the employees of the enterprise are the parts of this big machine. It emphasizes the absolute obedience and step-by-step of employers, as well as strict work standardization and procedure management. At present, the management mode of "organizers want to be organized and organizers do it" has long been out of date. In order to adapt to the rapidly changing market environment in the information age, under the idea of "balanced management", the modern enterprise management model should emphasize decentralization and democracy, rather than taking employees as tools. For example, in modern enterprise goal management, employees are both participants in goal setting and executors of goal implementation.
2. On the Balance between Subordinate Control and Incentive
According to the traditional control management method, the manager's main job is to control the behavior of subordinates to ensure the smooth completion of the company's established tasks. Under the thought of "balanced management", management is not only "control", but more importantly "guidance and encouragement". If managers can balance control and incentive, it is possible to create a new situation for enterprises and bring higher management efficiency and benefits.
3. About the balance between internal and external customers
The previous management theory paid more attention to the internal management of enterprises, and the direct purpose was to strengthen and improve the management efficiency and benefit of enterprises, which was of course necessary. However, in the market-oriented modern enterprise management, if we ignore the "collaborative management of customer relationship", we will lose the "balance" between modern enterprises and customers, which means losing the existing market. The balance between internal and external customers has become the core content of enterprise management. Because the fate of enterprises is in the hands of customers, and customers are the ultimate decider of enterprise profits, which is the fundamental law of modern enterprises in market competition.
4. About corporate governance, balance of rights and responsibilities
In the era of planned economy, the original organizational structure of enterprises has been seriously lagging behind, and the internal rights and responsibilities of enterprises are unbalanced, which seriously restricts the improvement of enterprise efficiency and the growth of benefits. Therefore, it is necessary to strengthen the internal governance of enterprises and form a relatively complete system of supervision and checks and balances composed of operators, shareholders' meeting, board of directors, board of supervisors, independent directors and external directors. We should design and formulate a system to encourage and restrain management, such as stock options, to ensure that the interests of the company are consistent with those of the operators. All these require a standard of control and balance, which is the symmetry of rights and responsibilities.
5. Balance between goals and development
In target management, there are two crucial "balances": one is the balance of development goals or plans in time and space, that is, the balance between short-term goals and long-term goals of the organization, the connection between tasks and goals of the organization in various periods, the proportional relationship between tasks of various departments of the organization, and so on. The second is the comprehensive balance in the implementation plan. Organizations should study the balance of resource supply in the process of organizational activities, and analyze the balance of tasks and capabilities at different times and in different links. In addition, target management is a dynamic process, and targets should be adjusted and modified according to the implementation and environmental changes to ensure the coordination and balance of management.
Enterprises should weigh risks and benefits when formulating their own business development strategies. The development strategy of an enterprise, whether diversified or specialized, is to avoid risks, gain competitive advantages, and then obtain excess profits. The key is whether the enterprise can achieve balanced and steady development according to the existing resources and capabilities.
Balanced management is the balance and coordination of a series of activities and behaviors in the production process of enterprises, which is of great significance to the stable operation and healthy development of enterprises. Enterprises should be market-oriented, take customer demand as the service purpose, and take technological innovation as the backing, and strive to form a system and a whole to achieve a balance with their environment. Balanced management is the integration of internalization and externalization of enterprises. It is committed to coordinating various internal and external relations, making full use of various resources, and guiding management practice with scientific theoretical methods and advanced technical tools.