Abstract:

Encouragement and restraint are two main aspects in a modern company. In the theoretical research of organization of a present enterprise, however, encouragement is usually paid much attention, while restraint is taken little notice.In fact, the substitutional restraint as the basis and destination of all restraints is not only the foundation of market economy but also enables an encouraging policy more perfect. The reliable substitutional restraint is also an encouragement. The personification of property rights can make substitutional restraint more reliable. This not only enables a manager to study on his job so as to obtain an entrepreneur s qualities, but also enables a qualified entrepreneur to take the place of a person who has a right of decision - making but lacks abilities, thus making a encouraging policy more effective.

Key words: encouragement, substitutional restraint, property right