Abstract

The external environment condition of enterprise is uncertain, which demands that the promotion of enterprise's financial performance must depend on a steady procedure structure instead of the standard which just relies on the result. Such procedure structure implies the demand of procedure rationality. It emphasizes the behavioral mechanism rationality of the procedure rather than only paying attention to result.

In chapter 1, I shall discuss the influences of enterprise's financial performance from aspects of procedure and result to analyze the fundamental supporting function of procedure rationality to improve the enterprises' financial performance. The procedure rationality improving enterprise's financial performance includes three respects: Firstly, who make the decision of enterprises. secondly, how the managers make their decisions and through what kind of procedure to support the decision objective. finally, how the specific decisions are carried out effectively. So the corresponding procedure rationality can be divided into three respects: structural rationality, process rationality and behavioral rationality. In order to guarantee enterprise's financial performance has an continuously improved mechanism, we need improve the procedure rationality on the management from three aspects as structural rationality, process rationality and behavioral rationality.

In chapter 2, I shall discuss how the structural rationality influ ences the final result of enterprise's financial performance. Structural rationality refers to the procedure rationality on the contractual arrangement of rights o f corporate decision. It requires the stakeholders have equal participated opportunities to the decision-making and managerial procedures in enterprise. And at the same time, it also requires the enterprise's residual control rights and residual claim rights to match each other as much as possible. Under such views of structure rationality, the inside structure of company's relevant financial reports need to be reconstructed in performance to reflect the dynamic structure and the cooperative surpluses according to the“specialized resources”invested by the stakeholders.

In chapter 3, I shall discuss how the process rationality influences the final result of enterprise's financial performance. Process rationality refers to the procedure rationality in the enterprise's decision making and supporting process. There are two aspects in this concept:on one hand, it is necessary to have the structural procedure as the logic foundation, if we want to get the expectative financial performance. On the other hand, whether the continuous value creation can be supported by the structured procedure, it still needs an effective enforcement process as guarantee. In the process of procedure' implement, it needs to follow the rule of participation, which emphasizes the cooperation between the stakeholders. However, the interest conflicts arising from such cooperation is unavoidable. The process rationality of enterprise is the extension of structural rationality, and both of them influence the result of enterprise's financial performance.

In chapter 4, I shall discuss how the behavioral rationality influences the final result of enterprise's financial performance. Behavioral rationality refers to the procedure rationality of decision executor's in dividual actions according to the enterprise's rules and relevant commands. Getting through the structural rationality of the decision-making rights and the procedure rationality of decision-making and managerial process, it need rely on the behavioral rationality of decision executor to reach a good financial performance finally. All internal procedures in company need executors to fulfill its relevant steps and functions, which requires a good encouragement frame in company to let enterprise's every member's own interests according with the promotion of enterprise's integral financial performance. And then, all this will make the enterprise's contract be implemented automatically by a kind of spontaneous forces. In the views of this, if we want to ensure the decision executors' behavioral rationality, it should enable the decision executor's behavioral externality internalized as much as possible, and at the same time, it also should offer a kind of alternative encouragement in accordance with such behavioral economic consequence. On the foundation listed above, once the actions of the decision executors deviate from the bound of the behavior rationality, its expectable loss will exceed the anticipated income.

At last, I shall summarize the theoretical innovation and the remained problem which need further research in this paper.

Key words: Financial performance, Procedure rationality