Entrepreneur Social Network, Control Disposition And Family Business Growth

Family business growth is a hot topic in family business research study. Current achievements in the research show that social network of entrepreneurs plays an important role on the growth of of the family business. The function of social networks must base on the company’s control structure, and allocation of control is the key of corporate governance structure. When analyzing the effect of control rights to the business growth,traditional theory of corporate governance has some defect, especially not apply to Chinese enterprise under eastern management culture. In recent years, scholars have already concerned about the social network perspective to study corporate control allocation issues.This article will focus the research on the influence relationship among entrepreneurs’ social network, control rights allocation and the growth of family business, try to explore the internal mechanism of influence of them, improve the current family enterprise growth theory, corporate governance theory, and provide appropriate managerial suggestion to family business development.For the research objectives, this article has built a triangle theory framework as "social network for entrepreneurs-control rights allocation- family business growth",mainly discuss following four questions: First, What is the characteristic of entrepreneurs social network in perspective of social network? Second, whether the social network of entrepreneurs could play a significant influence on family business growth? Third, will control right allocation play an important role in the growth of family business? Fourth,does control allocation play an intermediary role between the social network of entrepreneurs and family business growth? To answer above questions, this article continue the study with following methods:(1) Literatures review and commentary. According to the objective of this artical,review and comment on classical literature of social network theory, control right theory,the theory of enterprise development, learn the latest progress in the study subjects, current major controversial research, and limitations. Focusing on three variables: Relationship between entrepreneurs’ social network and the growth of family business, control right allocation and family business growth, entrepreneurs’ social network and control allocation.Provide theoretical basics for building theoretical model and submitting the assumptions.(2) Exploratory case study. Based on the study of typical family business-NVC case:Fighting for control. Deeply analyze the influence of social network for entrepreneurs tofamily business growing and how control right allocation affects. This case study confirm a preliminary relationship among the variables of the threes propositions of this article,including: First, the entrepreneurs social networks have an important positive impact on the growth of family business. Second, control right allocation of the family business can affect the growth of family business; third, in case of equity restriction, entrepreneurs’ social network will affect the control right allocation of enterprise.(3) Theoretical deduction and model construction. Based on literature review and comment, combined with the related research conclusion exploratory case, theoretical deduction of the relationship among the three variables, on the basis of the analysis of the model configuration and the growth of family business control theory of entrepreneur’s social network, emphasizes the possibility of allocation of control rights intermediary role in the relationship between the two. On this basis, this study proposes twenty hypotheses for the empirical test.(4) Empirical test. Carry out empirical test by survey method. Firstly, questionnaire design on the subject of involved variables- social network for entrepreneurs, control right allocation and family business growth; then design the questionnaire and research the questionnaire results from 165 collected valid questionnaires; finally, using statistical methods for recovering data questionnaires statistical analysis, get the empirical results,and verify the research hypotheses.Through the research on the relationship among the social network of entrepreneurs,control right allocation and family business growth, get following important conclusions:Firstly, the entrepreneurs social network includes network size, network strength and network heterogeneous structure of the three dimensions. Secondly, examine the relationship that the social networks of entrepreneurs affect the growth of the family business. The empirical results show that the network for entrepreneurs is an important factor in family business growing. Network size, strength and heterogeneous could significantly affect the growth of family business. Again, test how control allocation affects the growth of family business. The empirical results prove that the control rights are important factors which influence the growth of family business. Control form shareholders’ meeting, board and managers could significantly affect the growing family business. Finally, test the control right allocation playing an intermediary role between social networks and family business growth. The empirical results show that the control can be configured an intermediary role on the relationship between entrepreneurs’ social network and family business growth. Control of general meeting of shareholders plays anintermediary role between the social network for entrepreneurs and family business growth;Control of the board of directors plays an intermediary role between social network for entrepreneurs’ intensity, the relationship network heterogeneity and family business growth;Control of managers also play an intermediary role between social network of entrepreneurs’ intensity, the relationship network heterogeneity and family business growth.