Scale and Efficiency Research on Organizational Structure of Large Iron and Steel Enterprises in China

the paper analyzed the environment and running features of iron and steel industry in China.Problems found in industry include imperfect variety of production,low degree of concentration and small scale of production where the small scale is the root cause.The view of global trend identified that iron and steel industry are going into the scope where large enterprise controlling.So,it’s critical for Chinese enterprise to enlarge their production scale to get competence so as to participate the international competition.Furthermore,economic model has been built to analyze the production of large scale enterprise.Theory analysis describe the forming of scale advantage as that high competence and low running cost of iron and steel enterprise can be obtained through perfect resource allocation along the industry stream which can optimize the degree of work specialization and coordination among the partners in large scale enterprise.Additionally,in- vestigation on organizational structure of iron and steel enterprises indicated that superiority of functional organization structure lies in the high efficiency that resulted from work specialization.While,it can’t work well in large organization because of the high degree of centralization.Divisional structure is the decentralization organization which is the trend of structure for the large scale enterprise.But efficiency obstacles in practice is that the opportunistic behavior of subunits in enterprise is inevitable because the absence of a powerful department in higher level.So,the traditional proposition of large scale should be companied with high degree of decentralization must be reconsidered seriously.Based on former analysis,some restructure elements that should be thought seriously when iron and steel enterprises enlarge their scale have been proposed which include the characteristics of task,way of information management and balance between the centralization and decentralization so as to build the perfect controlling system to ensure that advantage of scale can be realized.