A Research on The Basic Theories of Systematic Risk Transmission in Enterprise Value Chain

Transcription

1 Reseach on The Basic Theoies of Systematic Risk Tansmission in Entepise Value Chain Deng Mingan Jin Daoming (School of Management, Wuhan Univesity of Technology, Hubei Povince, P.R.China, ) ( bstact This pape sets foth the connotation of entepise value chain and constucts the system map of entepise value chain. Then it defines the systematic isk of entepise value chain and its tansmission and pesents the oientation theoy, intensity theoy and time theoy of systematic isk tansmission in entepise value chain. Eventually, it puts fowad the viewpoint of contolling systematic isk tansmission in entepise value chain by means of the scientific concept of development which has the guiding significance in the pevention and contol of systematic isk and its tansmission in entepise value chain. Key wods entepise value chain system, systematic isk tansmission in entepise value chain, oientation theoy, intensity theoy, time theoy 1 Intoduction Michael Pote (1985) pesents the tem of value chain fistly and assumes that, accoding to the independence of economy and technology, evey opeating activities of an entepise is the pocess of ceating value, and then all the diffeent but inteacting opeating activities fom a dynamic pocess of value ceation that is called as value chain. ccoding to the viewpoints of Michael Pote, evey opeating activities of an entepise is the pocess of ceating value, and then all the diffeent but inteacting opeating activities fom a dynamic pocess of value ceation that is called as value chain. The value chain of an entepise has the indisceptible elationship with outside wold, which is connected with supplies upwad and customes downwad. Meanwhile, it is also influenced by the maket value chain as well as competito s value chain and then constucts an entepise value chain system as Figue 1. 2 Systematic Risk Tansmission in Entepise Value Chain Opeating activities in entepise value chain system is a complicated and inteacted dynamic pocess which is based on value ceation and has the chaacteistics of mutual limitation and pomotion. Fom Figue 1, entepise is connected with supplie upwad and custome downwad and foms an entepise value chain system. t the same time, it is affected by maket and competitos fom diffient aspects in diffient styles and to diffient extents. Fo supplie, entepise is its custome in backwad position and has business with supplie - in upive position, which is also affected by the elevant maket and competitos. Fo custome, entepise is its supplie in upive position and has business with customee - in backwad position, which is also affected by the elevant maket and competitos. Fo a competito, it is just in the same postion like entepise, so it should connect with supplies upwad and customes downwad and foms an competito value chain system. Besides, it is also influnenced by maket, which is a place designed fo tansaction and compised of some complicated elements with paticula functions. Entepise value chain system is made up of entepise value chain, supplie value chain, custome value chain, maket value chain and competito value chain. It is vey huge and complicated, but only a subsystem in the system of national economy and then is changed with the whole system of national economy, which is the oot of uncetainties in entepise value chain system. These uncetainties will evolve with time and envionments and futhe lead to the deviation of actual tagets of entepise value chain system fom anticipated tagets, o the opeating isk. This isk will tansmist and ovespead along a cetain of pathes by means of some caies in entepise value chain system, which is called as the systematic isk tansmission in entepise value chain. 3 Basic Theoies of Systematic Risk Tansmission in Entepise Value Chain 3.1 Oientation theoy of systematic isk tansmission in entepise value chain Oientation theoy means that the tansmission of entepise value chain s systematic isk has a cetain of oientation and exists among elated entepises with diect o indiect value ceation elationship with entepise value chain system. It includes the single-oientation, dual-oientation and This pape is sponsoed by Natual Sciences Foundation of China ( )

2 multi-oientation. (1) The theoy of single-oientation of systematic isk tansmission in entepise value chain Single-oientation of systematic isk tansmission in entepise value chain epesents that, if an entepise is influenced by the isks tansmitted fom upive supplies, maket o competitos, it has no choice of peventing, contolling and tansfeing these isks but to pass these isks to downwad customes. Single-oientation is chaacteized by single diection, limited scope and diect tansmission. Fo example, if the pice of aw mateial offeed by the upive supplies of an entepise goes up, this entepise can not absob the pessue of pice by cutting off the consumption of aw mateial, but pass this isk to downwad customes. e Competit o - Entepise e e - e e Figue 1 Entepise vlaue chain system (2) The theoy of dual-oientation of systematic isk tansmission in entepise value chain Dual-oientation of systematic isk tansmission in entepise value chain means that, if an entepise is influenced by the isks tansmitted fom upive supplies, maket o competitos, it has the ability to pass the isks caused by the tansmitted isks to downwad customes evesely. It is chaacteized by evese diection, limited scope and convective tansmission. Fo example, if the pice of aw mateial offeed by the upive supplies of an entepise goes up, this entepise has to cut off poduction due to the shotage of funds. s a esult, the decease of puchased mateials will diminish the demand fo aw mateial offeed by the upive supplies and the pofit acquied by these supplies will go down. (3) The theoy of multi-oientation of systematic isk tansmission in entepise value chain Multi-oientation of systematic isk tansmission in entepise value chain epesents that, if an entepise is attacked by the isks tansmitted fom upive supplies, maket o competitos, it will be at the huge loss and then conduct the elated isks to entepises in entepise value chain such aas upive 903

3 supplies, maket, competitos and downwad customes. Multi-oientation is chaacteized by multi-dimension, extended scope and inteleaving tansmission. Fo instance, the total pofit of an entepise in a given yea may deive fom the appeciation of aw maeials, the depeciation of finished poducts, the upgade of maketing expense o the decease of demand caused by downwad customes. ccodingly, this entepise has to change its stategy and updates its poducts though technological innovation. Meanwhile, the development of new poducts will change the equiement mode of aw mateials and then some new supplies will take the place of old supplies. The enewal maket segmentation between this entepise and competitos will update the pecentage of customes and the vaieties as well as contents of maket sevices. ll in all, thee exist diffeent levels and kinds of isks fo upive supplies, downwad customes, maket and competitos. The single-oientation, dual-oientation and multi-oientation of systematic isk tansmission in entepise value chain all follows the law of minimum esistance, which means that, although the elated isks exist the possibility of extending to vaious diections at the initial stage, they geneally spead to the diection with the stongest elationship and weakest pevention ability. Fo example, unde the same isk of soaing pices, some entepises suffe a lot because they have poo isk pevention ability and lack of aw mateial eseves and options. But othes keep the stable opeation due to that they they have stong isk pevention ability and can pedict the ise of pice exactly. s a esult, they can evade this kind of isk by the huge eseve of aw mateials befoe the pice soas up and pevent the extension of this kind of isk. 3.2 Intensity theoy of systematic isk tansmission in entepise value chain Intensity theoy of systematic isk tansmission in entepise value chain pesents the degee of deviation of actual tagets of entepise value chain system fom anticipated tagets in the unit time. It includes the tansmission of high intensity, medium intensity and low intensity. (1)The theoy of high intensity of systematic isk tansmission in entepise value chain High intensity of systematic isk tansmission in entepise value chain epesents that, if an entepise is influenced by the isks tansmitted fom upive supplies, maket o competitos, the huge and damatic change o deviation between actual tagets and anticipated tagets of an entepise will appea in the shot tem. Fo instance, the sian financial cisis put the destuctive attack on some financial institutions and entepises vey quickly. SRS and bid flu exeted the huge impact on egional economy,society and the lives of pepole. (2)The theoy of medium intensity of systematic isk tansmission in entepise value chain Medium intensity of systematic isk tansmission in entepise value chain stands fo that, if an entepise is influenced by the isks tansmitted fom upive supplies, maket o competitos, the big change o deviation between actual tagets and anticipated tagets of an entepise will appea in the shot tem. But this kind of change o deviation usually pesents itself slowly with the chaacteistics of unifom contact, elative stability and pedictability. Fo instance, the soaing pice of aw mateial and the escalation of inteest ate can pull down the pofit level of an entepise. Howeve, both the soaing and the escalation ae in the unifom and stable hythm athe than continually o damatically. So entepises can adopt some positive and scientific measues to minimize the deviation between actual opeation tagets and anticipated opeation tagets. (3)The theoy of loe intensity of systematic isk tansmission in entepise value chain Low intensity of systematic isk tansmission in entepise value chain means that, if an entepise is influenced by the isks tansmitted fom upive supplies, maket o competitos, the small change o deviation between actual tagets and anticipated tagets of an entepise will appea in the given time. This kind of change o deviation is usually chaacteized by small impact, little involvement and stong contollablity. Fo instance, the job-hopping of geneal technician o management in an entepise has an shot-tem impace on its technological and opeating activities. But this entepise can eoganize its business and diminish, even eliminate the fluctuation of opeating activities. The high intensity, medium intensity and low intensity of systematic isk tansmission in entepise value chain ae elated with entepise value chain, supplie value chain, custome value chain, maket value chain, competito value chain and coopeation among them. The highe the coopeation among them is, the close the elationship among them is. Futhemoe, entepises will be influenced by changes caused by the tansmission of isks geatly, o the intensity of the tansmission of isks is highe. Othewise, the intensity of the tansmission of isks will be loweed. 3.3 Time theoy of systematic isk tansmission in entepise value chain Time theoy means that the tansmission of entepise value chain s systematic isk exists a continuous time seies among entepise value chain, supplie value chain, custome value chain, maket 904

4 value chain. It has the classification of continuous tansmission, inteval tansmission and peiodical tansmission. (1) The theoy of continuous tansmission of systematic isk in entepise value chain The continuous tansmission of systematic isk in entepise value chain pesnets that if an entepise is influenced by the isks tansmitted fom upive supplies, maket o competitos, the continuous and uninteupted change o deviation between actual tagets and anticipated tagets of an entepise will appea in the long un. Fo example, if the innovation ability of poducts, technology, management and ideas of an entepise s competitos is vey stong, competitos s poduct enewal, technological pogess, management innovation and update of management ideas will ob the oiginal customes of this entepise one by one. ccodingly, this entepise will suffe the shink of poduction, the shotfall of employees wages, the fluctuation of employees sentiment, the beach of contacts with upive supplies, the dop of maket shae and the dain of customes. Futhemoe, the invisible loss such as eputation loss and default compensation claim will last fo a long tem. (2) The theoy of inteval tansmission of systematic isk in entepise value chain The inteval tansmission of systematic isk in entepise value chain stands fo that if an entepise is influenced by the isks tansmitted fom upive supplies, maket o competitos, the uncontinuous and inteval change o deviation between actual tagets and anticipated tagets of an entepise will appea stage by stage. Fo example, fo the sake of the healthy and sustainable development of national economy, some maco-economic policies such as the inteest ate policy will be adjusted. Consequently, the investment efficiency, economic pefomance and opeating decisions of entepises will be affected. So entepises should adopt efficient measues to deal with these poblems and attain a new dynamic and balanced position. (3) The theoy of peiodical tansmission of systematic isk in entepise value chain The peiodical tansmission of systematic isk in entepise value chain means that if an entepise is influenced by the isks tansmitted fom upive supplies, maket o competitos, the egula and peiodical change o deviation between actual tagets and anticipated tagets of an entepise will appea stage by stage. Fo example, entepise value chain system is a subsystem in the whole system of national economy and then is changed with the economic ule of national economy following the peiodical stages of ecession, esuscitation,development and pospeity. Similaly, the peiodical change of entepise value chain system s opeating tagets will appea and it is possible fo the peiodical deviation between actual tagets and anticipated tagets of an entepise and the peiodical tansmission of systematic isk in entepise value chain. 4 Contolling Systematic Risk Tansmission in Entepise Value Chain by Means of The Scientific Concept of Development Systematic isk tansmission in entepise value chain should follow the theoies of oientation, intensity and time. ccoding to the analysis of these theoies, we can conclude clealy that the intoduction of ideas and methods of the scientific concept of development into the contol of systematic isk tansmission in entepise value chain is the optimum choice fo entepises. 4.1 Establishment of a fast and good development taget Entepises should focus on the idea of developing national economy and make geat effots to gasp the ules of economic development, to innovate the ideas of economic development, to tansfom the modes of economic development, to sovle the poblems in economic development and to pimpove the quality and benefits of economic development. ccodingly, entepises should innovate thei popety ight system, technology, poducts, management. So they can ealize the good and fast development, minimize thei isks and enhance the ability to pevent isks and to contol the systematic isk tansmission in entepise value chain. 4.2 Eection and pesistence of the ideas of making oveall plans and taking all factos into consideation as well as sustainable development In ode to ealize the fast and good development taget, entepises should econcile with supplies and customes coectly about the elationships between cuent inteests and long-tem inteests, patial inteests and the whole inteests of value chain, as well as the competition and hamonious development. Besides, ntepises should take the esouce-effective and envionment-fiendly style and pay moe attention to cedit and hamony among entepise value chain, supplie value chain, custome value chain, maket value chain and competitos chain so as to contol the systematic isk tansmission in entepise value chain. 905

5 4.3 doption the coe idea of people oiented and people foemost People is the numbe one facto in ealizing the fast and good development taget as well as sustainable development. So entepises should maintain the basic inteests of shaeholdes and employees, espect thei contibution to entepises, keep thei inteests safe, and stimulate them wok had and pesent thei ceativity,ability and wisdom compehensively. Consequently, the systematic isk tansmission in entepise value chain can be pevented, contolled and eliminated efficiently and then entepises can keep themselves healthy and maintain sustainable development. 5 Conclusions This pape sets foth the connotation of entepise value chain and constucts the system map of entepise value chain. Then it defines the systematic isk of entepise value chain and its tansmission and pesents the oientation theoy, intensity theoy and time theoy of systematic isk tansmission in entepise value chain. Eventually, it puts fowad the viewpoint of contolling systematic isk tansmission in entepise value chain by means of the scientific concept of development which has the guiding significance in the pevention and contol of systematic isk and its tansmission in entepise value chain. Refeences [1] Ye Jianmu, Deng Mingan, Wang Hongyun. Reseach on the Tansmission Mechanism of Entepise Risk. Theoetical Monthly, 2005(3): (in Chinese) [2] Xie Zhe, Deng Mingan. Reseach on the Tansmission Regulaity of Entepise Risk. Finance and ccounting Monthly,2006(11):13-14(in Chinese) [3] Deng Mingan, Dai Shengli. Study on the Fomation and Tansmission Mechanism of Infomation Risk in Entepise ing. Commecial Modenization, 2007(8):3-11(in Chinese) [4] Hu Jintao. The Repot to the Seventeenth National Congess of the Communist Paty of China (in Chinese) 906