A Model Constructed to Evaluate Sustainable Operation and Development of State-Owned Enterprises after Restructuring

Li-Hsing Ho,Chen-Cheng Tsai

doi:10.3390/su10072354

Abstract

A state-owned enterprise (SOE) is a mechanism by which market stability is achieved through government intervention. As economic freedom intensifies, most SOEs still have a rigid personnel system, unsound financial structure, and high product costs, along with poor management and operating losses, making them financial burdens. This study uses grey relational analysis and a Boston Consulting Group matrix to develop a sustainable management and development model for enterprises. The 13 business units of the Taiwan Sugar Corporation (Tainan, Taiwan) created through diversification were evaluated to determine if they have led to new competitiveness. The findings reveal that only two of the business units—land development and property management—have justified their operations, while the other 11 business units have brought no benefits to the country. Overall, diversification has created a greater burden for the country.

Highlights

The Taiwan Sugar Corporation (TSC) is a state-owned business unit under the Ministry of Economic Affairs of the Republic of China (Taipei, Taiwan)
The share of the sugar industry gradually declined during this period of industrialization
The TSC set up 13 business units based on several product attributes: biotechnology, hypermarket, petroleum, marketing, sugar, livestock and breeding, fine agriculture, leisure and recreation, environmental protection, land development, property management, organic and safe agriculture, and general management

Summary

Introduction

The Taiwan Sugar Corporation (TSC) is a state-owned business unit under the Ministry of Economic Affairs of the Republic of China (Taipei, Taiwan). Growing along with Taiwan’s economy, the TSC has undergone three important transformational and development stages: exports, industrialization, and diversification. During this stage, Taiwan began to transform from an agricultural society to an industrial one. The TSC set up 13 business units based on several product attributes: biotechnology, hypermarket, petroleum, marketing, sugar, livestock and breeding, fine agriculture, leisure and recreation, environmental protection, land development, property management, organic and safe agriculture, and general management. Set up as a market stabilization mechanism, the TSC, a state-owned enterprise (SOE), created a huge financial burden on the country. It received negative evaluations on both management and operations, and its losses constituted a persistent weakness that never improved. The evaluation results could serve as a reference for Taiwan, and help it ensure the sustainability of its SOEs

Literature Review

Grey Relational Evaluation Model

Case Analysis

Question

Conclusions