Functional Positioning of Headquarters and the Intra-Group Employee Compensation
The internal labor income distribution of a corporate group is essential for ensuring the effectiveness and equity of the group's income distribution policies and plays a significant role in the Chinese government's initiatives to improve the income distribution system.Based on the theory of divisional income distribution,this paper pioneers an exploration into how the functional positioning of headquarters influences a group's internal labor income distribution,aiming to establish a foundation for a scientific understanding and assessment of these policies.This study reveals the following insights.The labor income distribution within a group correlates with the functional positioning of its headquarters.A production-oriented functional positioning at the headquarters is detrimental to the labor income distribution advantage of the headquarters over its subsidiaries.In contrast,a non-production-oriented functional positioning,including management-oriented and investment-oriented functions,is beneficial to the headquarters'advantage in labor income distribution.The intra-group value creation mechanism indicates that the functional positioning of the headquarters impacts the internal labor income distribution by altering the headquarters'value creation capabilities.The production-oriented function of the headquarters diminishes its relative advantage in intra-group value creation,thereby reducing its relative advantage in labor income distribution.In contrast,non-production-oriented functions,particularly management-oriented ones,bolster the headquarters'relative advantage in value creation,thereby enhancing its relative advantage in labor income distribution.The intra-group functional compensation mechanism shows that the functional positioning of the headquarters mitigates the trend of internal labor compensation distribution changing in proportion with the distribution of internal business income.This reduces the concentration of labor compensation with business income towards headquarters with production-oriented functional positioning or diminishes the transfer of labor compensation with business income from headquarters with non-production-oriented functional positioning,ultimately altering the internal labor income distribution pattern.The external labor market competition mechanism reveals that headquarters with different functional positioning types face distinct external labor market reference points.Due to the club reference effect based on different functional positioning types,the functional positioning of the headquarters ultimately modifies the internal labor income distribution pattern of a group.Further analysis indicates that the policy burden diminishes the impact of the headquarters'functional positioning on the internal labor income distribution pattern.An internal labor income distribution pattern aligned with the headquarters'functions is more conducive to enhancing the enterprise total factor productivity(TFP).The insights from this study suggest that in the process of implementing the Chinese government's plans to improve the income distribution system,it is essential to place great emphasis on the importance of functional division and construct an income distribution system that aligns with the realities of Chinese corporate groups.This study further extends the micro-level study of labor income distribution and opens the"black box"of the internal labor income distribution structure of corporate groups.
employee compensationcorporate groupsfunctional positioning of headquarters
NETL
NSTL
万方数据
