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Research on the Power Transition of China’s Family Firms

Author: WangBo
Tutor: WuDongMei
School: Capital University of Economics
Course: Business management
Keywords: family firm power transition
CLC: F276.5
Type: Master's thesis
Year: 2008
Downloads: 203
Quote: 0
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Abstract


This paper systematically focuses on the handover of power of China’s family firms, especially on those who rose after China’s reform and opening to the world. China’s private businesses have been playing the essential role in national economy, of which family firms account for 90%.Moreover, family ownership or family-related management exist in other entities, for instance, town-owned and collective-owned enterprises. Therefore, family firm is major way out for many enterprises and has great influence on the development of economy, wherever in western countries or in mainland China’s prosperous private businesses. To some extent, focusing on China’s family firm would lead to the standardisation of handover, the breakthrough in rise, and the avoidance of fall in three generations with the aspect of China’s rise in economy in future.In-depth researches in the field of the handover of China’s family firms are rare so for, but the less systematic and partial analyses of that are common. However, in fact, some characteristics nowadays make family firms critically stumbling in modern managerial system, especially those grew up in China’s prolonged historic fetters. Therefore, the research in the field of the handover of power of family firms concerning Chinese characters will show the way out to the growth, the competences and the managerial system of family firms both theoretically and practically.The first point of view in this research covers tactic of the problems caused by the handover of power of China’s family firms. Referring to literature on domestic and overseas family firms, this paper explains not only the reasons and relative factors resulting in the above problems, also the definitions and relative achievements, which forms the foundation of explicating the problems caused by the handover of power of family firms.The paper combining theoretical methods and case studies analyses the current situation of the handover of the power as well as the problems from versatile aspect, compares with typical cases of the industrial countries, highlights the solutions to the handover of power of family firm, meanwhile the process of finding problem-referencing experiences-analysing drawbacks-solving problems benefits the logic and comprehension of this paper. Finally, methodologies and real cases are adopted—Fotile, a typical Chinese family firm, has been detailed in terms of the handover of power, which contributes to the operationalisation of the conclusion as well as acting as guidance for similar family firms.It can be seen from the researches of global family firms that the western theories were established in the US, from 60s 20th Century, this type of research started drawing attentions, and varied in different eras; thanks to the in-depth and practical analysis of inheritance in this paper compared with most of incomprehensive articles, this paper embeds the following merits:①Extensive studies in inheritance of China’s family firms;②Make way to the probe into inheritance of family firm under Chinese characteristics;③According to the above studies, analysis of inheritance at Fotile is the flagship for family firms.The following conclusions can be drawn: family ownership is a type of excellent principle globally. Most of China’s private businesses started with family ownership, blood, partnership. Son in the name of father is still the major form in China’s family firms; consequently the key point is the change in thinking, which also has the essential influence to their founders, so it’s quite necessary to plan the inheritance in advance, develop prominent inheritors, and devolve powers downwards. However, family firm should also trivialise the ownership, attract the talented under the condition of being in control of ownership at certain stage in order to generate a methodology and a managerial philosophy in power inheritance which feature Chinese characteristics.

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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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