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The Study of Family Firm’s Governance Structure in China

Author: LiuZuo
Tutor: LuoMeiJuan
School: Yunnan University
Course: Economic History
Keywords: Family firm Corporate Governance Structure Questionnaire survey
CLC: F276.5
Type: Master's thesis
Year: 2010
Downloads: 270
Quote: 0
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Abstract


Along with our country private sector’s development, the family firm is playing more and more vital role in our economic development. The family firm’s healthy development has an effect on our country’s comprehensive strength to a certain extent. If the family firm wants to obtain a long-term sustainable development, it must have the corporate governance structure which adapts. This article launches the research in the view of corporate governance structure, then further discuss the family firm governance structure’s management action, the organization pattern, the understanding of development environment change relations. Through the suggestions provided, the family firm’s intrinsic control system can be solved to some extent. At the same time, it can improve entrepreneur’s quality, solve the sustainable development contradiction and standard enterprise system theory and management theory.This article first elaborated family firm’s correlation theories, then it further elaborated the concept of corporate governance structure as well as the family firm governance structure and theory bases. The article pointed out the relationship between property right, the family, the management aspect and corporate governance structure, then it elaborated Chinese family firm corporate governance structure’s chief features. Afterward, through the questionnaire survey of private enterprises in one province in China, it analyzed Chinese family firm governance structure current situation and induced the questions which exist in the corporate governance structure. Finally, based on these questions, this article proposed the suggestions for improving Chinese family firm governance structure which lead to sustainable development of the enterprise.This paper draws the following main features exists in current Chinese family firm governance structure. Firstly, the property right integrates with administration authority tightly. Secondly, decision-making authority and administration authority are highly centralized. Thirdly, most of agent relations is the personal relations. Finally, take shareholder as leading unilateral management structure. Through the analysis for small Private enterprise’s questionnaire, it can be found the following system defects exist in family firm corporate governance structure.1. Management decision-making mechanism are not reasonable.2. The corporate governance structure is not perfect.3. The board of directors, the board of supervisors or the general meeting of shareholders are not played the proper role.4. The company selects personnel by favorite.5. The company is lack of encourage mechanism.6. The family firm doesn’t establish modern enterprise culture. Based on the questions exist in family firm corporate governance structure, the paper suggest that the family firm should set up modern corporate governance structure. In the purpose of realize modern corporate governance structure, family firm must establish incentive-restraint mechanism, and improve enterprise management structure control system as well as Family firm culture system.

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CLC: > Economic > Economic planning and management > Enterprise economy > A variety of enterprise and economic > The private sector
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