A Study On The Transition Of Functions Of Kinship Network In Family Enterprises

China is family oriented country. Kinship networks are dominant in the socialnetworks of the Chinese people. But the family culture is changing, as more and moreindividuals walked out of the traditional families in the changing process of themodern society. It aroused widespread concerns of the scholars that the concept offamily is changing; the traditional family institution is changing into modern familyinstitution. Kinship network that is closely related with family are often considered the“by-product” of a family. The role of blood kinship network in the modern society isgradually declining as it is a traditional one. Meanwhile, the amount of studies onkinship networks is also declining. In this study, the author claims that kinship networkstill has its function as an economic community, because kinship networks build innateties of trusts. Therefore, kinship network is still playing an essential role in the modernChinese society where family members establish a wide range of economic activitiescooperatively.This study is to focus on the transition of functions of the theethics-based kinship networks embedded into economic system under the backgroundof the reform of the Chinese market. The aim of this paper is to explore the roleadjustment and adaptation of kinship networks on the platform of small andmedium-sized family enterprises (SMFEs)to deduce the transition of functions of thekinship networks embedded in the rational and interest-oriented family and economyfield in the context of market-oriented reform.This paper takes social networks as the theoretical perspective and studies thekinship networks. The relationship theory derived from China and social network theory of the western countries have some common points.China is arelationship-oriented society.“Relationship” is a key to understand the core conceptsof Chinese social structure and its human psychology and behavior. Chinese peoplepay attention to the construction and maintenance of relationships. The kinshipnetwork is a major Chinese social relations among relatives with a wide range of socialinteraction space. It is a major social resource. Because of these features, the theory ofsocial networks could find its root and practical support in the Chinese society easily.The definition of Kinship network refers to both consanguinity network andaffinity network, which means besides networks of nuclear families, the concept alsocovers the networks of blood-linked kinship and the marriage-linked kinship. Thedefinition of the SMFEs in this paper is consistent with the national introduction of the"Draw-Type Standards for the Small and Medium-Sized Enterprises”. Moreover, theownership and the right of operational control of the family-owned enterprises areowned by one or more family members in the medium-sized family enterprises, smallfamily businesses and micro family businesses.This paper uses qualitative research methods to investigate the kinship networks.It uses snowballing investigation method to extract10SMFEs in C city of thenortheastern China. The major research object of this study is the business owners.This paper explores the obligations, employment and cooperation of the kinshipnetworks during different developing stages of small and medium-sized familybusinesses, which include the stages of start-up, expansion and maturity. By making anin-depth study of the function, interaction and value orientation of the kinshipnetworks of the SMFEs, this study explores the transition of functions of the kinshipnetworks in the background of the national market-oriented reform.This paper uses literature, semi-structured interviews to gather information andmake observation. The author gets information from the interviews of family businessowners, relatives and non-relative employees conducted from the extracted SMFEs.The information covers the development process of the family business,entrepreneurial experience, family support for business owners, family responsibilities based on hiring and cooperation relations among relatives in the enterprises. Theauthors observed Enterprise W by entering into the study site to investigate theinteractions, emotions and attitudes of the relatives without interfering therespondents.Whats more, this paper collects data by studying signed contracts of thecompanies, national laws and regulations in order to make a supplement ofobservations and interviews.The research shows that tradition of family culture does not disappear, butappeared in a new look on the basis of critical inheritance. In the SMFEs, people stillpay attention to family values and the overall interests of the family. Blood kinship isan important indicator of the family business employment. The traditional "patriarchal"paternalism is still prevalent in the family business. At the same time as theidentification, structure and scale of the kinship networks have been changing becauseof the changes in the family institution and family structure. In the context of thenational macro-market changes, kinship relations are undergoing changes. particularlyfrom the perspective of diachronism, kinship networks is becoming equally treated asordinary employees, the function of the kinship has weakened and blurred; Theintimacy degree and economic interests between relatives are the important indicatorsof modern society to determine the strength of family ties. The law of humanrelationships among relatives is the main principle of social exchange. As theimprovement of woman’s status, the role of marriage-related networks is prominent.The author argues that the core of the transition of kinship networks is: the transitionfrom the value of the collective-family interest-orientation to the value of core-familyinterest-orientation. With the transition of modernization the traditional family systemis gradually demised. The primary unit of the society is core family composed withhusband and wife and their unmarried children, other than the extended family whichconsists of all descendants of a common ancestor of the family Therefore, the familysystem is not based on an economic community of the family in the modern sense, isactually a family link between kinship networks, composed of a plurality of individualfamilies. This network is flexibly changed according to the closeness and the actual needs of the family. Economic interests become an important link between the relativesof the family ties.The major innovations in this research are as follows:First, the theoretical response. In the past, it is widely agreed that economy is partof the society. Economic behavior is embedded in social networks, and the emergenceof economic activities depend on establishing trusting relationships, such asGranovetter’s "mosaic theory." The innovation of this paper is to reverse this logicalthought, which embedded networks in economic behaviors to investigate how therelationships affects economic behavior, and changes in the relationship itself. Mosaictheory is based on the theory of Western society’s economic and social development,which is not entirely applicable in the Chinese society where family culture is deeplyrooted. Because most of Chinese private enterprises are founded on the basis of specialtrust among relatives. Therefore, this paper stresses on the kinship networks embeddedin the economic behaviors, to explore the functional transition in blood kinship ties inthe home and economic field.Second, the response to the reality of the society. With the development ofmodernization and urbanization, individuals walked out of collective families, andbecome independent individuals to participate in social lives. The work-related andstudy-related networks are becoming major interpersonal relationships. Therefore, thetransition from consanguinity and geographical relations to work and study-relatednetworks is the one of the majors features in the transition from traditional society tomodern society. The study of the inherent kinship and geopolitical networks is seen asa traditional research community, while the study of the attainable geopolitical andstudy related networks are considered modern in nature. It is learned from this research,along with the development of modern society, kinship has always played an importantrole in China’s social development. The function of the Chinese kinship are in people’slives mutual cooperation and assistance in the people’s daily and economic lives. Theyperform strong emotional and obligatory appeal. Therefore, kinship networks are thefirst choice of people to form an economic community as well as promoting the economic development and social stability. Therefore, the study of kinship networksstill has theoretical significance in the modern world.Third, the characteristics of the research methods. This study explores thefunctional transition of kinship networks which are embedded in the SMFEs. Thetraditional Chinese family culture has a profound impact on modern people’s valuesand ideology. The research method and findings could be used to investigate thefamilial features in different organizations and institutions, e.g., Chinese townshipenterprises, family businesses and state-owned enterprises, etc. A general conclusioncould be made by embedding kinship networks in different economic fields.