A Study On Management Modes Of Chinese Family Business

Family business is primitive organizational form of enterprises, which is most popular in the world with the largest number compared with other form of enterprises. After the opening policy, family business has been developing very rapidly and has become a major driving force for China's economic development. The study on family business started early in western countries and a well-developed theoretical system has been formed. However, it is much later that Chinese academic community began to study on that, and therefore, the theoretical system about that is not well developed.In China, family business is often regarded as"old-fashioned"enterprise system, which is opposed to modern enterprise system. In fact, the management mode in family businesses is deeply impacted by many factors, such as political system, economic system and the level of economic development, traditional culture and etc... That's why management modes of family businesses vary in different countries. In America, management in family business is highly standardized while management mode of Japanese family business is pluralistic in system and property right. In European countries, most small family businesses form clusters and Chinese family businesses mainly adopt paternalistic, family-style management modes.The management mode is deeply influenced by the traditional Chinese culture, in which family culture and clan system are two distinctive features which are clearly existing in Chinese family businesses. Compared with the western family firms,"rule of man"is dominant and management style is more flexible in Chinese family businesses. Ownership is not clearly established and decision-making process is not scientific. In human resource management, favoritism is popular. All those above are main obstacles for further development of Chinese family businesses. However, the family business management mode also has some advantages, such as high efficiency of decision making, strong executive power, low agency cost and etc... After the comparative analysis between foreign and Chinese family businesses in process of evolution and management modes, management modes in different phrases of development are analyzed to compare each to a specific organizational group of animals. In this dissertation, the concept of"concerning resources"is brought forward after the comparative analysis to both Chinese and foreign family businesses.With scanning the societal environment, I pointed out that Chinese management mode of family firms is deeply impacted by the unique existing political system in China. Finally, with all-sided scanning China's current societal environment and comparative analysis on Chinese and foreign family firms, a conclusion has been drawn that it is not a panacea that proprietary rights are separated from management rights and professional managers are not adaptive to most of Chinese family firms because of the lack of effective social credibility system and legal system. For some large family businesses, professional managers can be employed, but not completely abandoning the management mode with family members at important positions. The family-style management should be well integrated with modern management system.In addition, the government should do something to promote family businesses to develop with support in financing, technology and policy. In China, only a few family firms can be developed into strong and large ones and most of them are small and medium enterprises. The example of industry cluster composed of small firms in Europe gives us significant gives us lessons.