The strategic analysis of the design of individual enterprise of Taiwanese Small and Midium Enterprises
Date Issued
2005
Date
2005
Author(s)
Liu, Yun-Chu
DOI
zh-TW
Abstract
Title：The strategic analysis of the design of individual enterprise of
Taiwanese Small and Midium Enterprises
Name：Liu, Yun-Chu
Advisor：Lin, Chan-Jane, Ph.D.
Month/Year：May 2005
The Mainland China has positively attracted foreign capital to accelerate the economics and trade development since the implementing the so called "reform and open policy". The lower cost of land and the preferential benefit of manpower and tax burden have made the Taiwanese enterprises to eagerly launch the investment travel to the Mainland China.
Both governments of Taiwan Straits had stipulated the related laws and regulations for the investing management respectively. However, the initial idea of stipulating these management laws and regulations has the mutual conflict and contradiction. Therefore, the Taiwanese businessmen cannot conform uses the sole enterprise individual transport business but to be able with difficulty to conform the laws and regulations of both governments, they must design at least two individual enterprises to conform the related laws and regulations of investment and business management which two governments mutually conflicts.
The legitimate tax payment and the plan of tax affairs are the most important activities of internal management. The plan of how to lower the tax burden of the enterprise has the greatest influence regarding enterprise's survival and competition. The case company uses the out-of-border company to achieve the goal of lower tax by transfer-pricing activities. Transfer-pricing is a very effective management and control tool for the disposition of different responsibility center to accommodate the dynamic change of environment, the utilization of strategy and the business operation of organization.
This research is based on the typical middle and small scale manufacturing industry Taiwanese businessman which investing in Mainland China and uses unpublicized ASM group company as an example to analyze to the major activity of individual enterprise. The focus is re-examining the establishment of the individual enterprise and the major dividing activities of value chain. The inappropriate part of performance will be revised to make the design of establishing the individual enterprise to conform to the most recent standard law and be able to measure cost relationship among the major activities for the adjustment of value chain, and then to increase the overall benefit and management efficiency of the case company.
This research deduces three conclusions about the challenge and difficulty when the case company designs the individual enterprise. First, the laws and regulations of investment management change rapidly even with each new day. The Taiwanese businessman in Mainland China must pay attention to the law at times of the change to catch the management superiority when the law is transformed to favor business and to avoid forming the inferiority immediately when the law is transformed to thread the management activities. Second, the commercial laws and regulations in both governments not only all are not yet completely connected to the international rails, but also are mutually inconsistent to each other. This causes the Taiwanese businessman who invests in the Mainland China has to pay the extra mental effort to conform to the bilateral requirement. Third, the small and medium-sized enterprise lacks the resources and the manpower and therefore is unable to be similar as major large companies to allocate the specialist in accounting department or other departments in accordance to the different and unceasingly renewal investment management laws and accounting regulations between two governments.
The case company has also simultaneously achieved three advantage when designs the individual enterprise. First, the establishment of out-of-border company achieves both the management efficiency and the festival tax reduction benefits. The usage of different function of out-of-border company has promoted the dual benefits of both the management efficiency and the festival tax reduction.
Second, the establishment of the foundation of strategic cost management. From the different function of individual enterprise the case company established, the position and cooperative performance of subsidiary companies are clear for establishing the principle of transfer-pricing and for merging the business reporting forms to reveal the cost and earning of the entire company completely.
Third, it is convenient and advantageous for out-sourcing the accounting activities. The manpower of accountant is limited because the case company is small- and medium-scale enterprise, some work therefore need to outsourcing. After establishment of individual and independent enterprise, some work can separately entrusts the assistance from different exterior organization based on the heterogeneity and the geographical position of the individual enterprise.
Based on the above conclusions, this research raises the following proposals: First, to the enterprise:
1. Mid- and small-scale enterprise is limited in the resources, should actively uses exterior resources.
2. Mid- and small-scale enterprise should not locate the mainland company's financial personnel for the bookkeeping personnel.
3. The financial personnel should be localized, and exterior assistant resources should also be localized.
Second, to the government:
"The positive opening" should be well more than "the effective management". Third, to the case company:
1. The enterprise no matter what the size should profoundly take social responsibility.
2. Mid- and small-scale enterprise also must continue to improve even innovates. Fourth, to the following researchers:
The following researchers can be benefited by catching the nimble picture of Taiwanese businessman who invests in Mainland China and the dynamics of business management they have to face including the changing tendency of law and the convenience and restriction of operation with out-of-border company from this research.
Subjects
台商
境外公司
移轉計價
Taiwaness Businessmen
Out-Of-Border Company
Transfer-Pricing
Type
other
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