A Theoretical Analysis On Family Business System In China

In the introduction of this paper, the basic structural instructions of the paper aredivided into four aspects including the instructions of research background andsignificance, the summaries of research, research methods and research ideas as wellas the instructions of innovations and deficiencies of the paper.In Part One, the general category and laws of institutional changes of familybusiness system are divided into four sections, firstly, the definition of family business;secondly, the reasonability and life cycle of family business; thirdly, the basics ofinnovation and changes of the system, fourthly, the holistic problem of familybusiness system in China.In the definition of family business in Section One, the extension andconnotation of the topic of this thesis are defined through the analysis of the conceptof family business by scholars at home and abroad. Then the characteristics of familybusiness are analyzed, which include its economic basis of system, foreshadowing forthe categories study in the following part. And the advantages and disadvantages offamily business are discussed, which relate to the necessity of family business and it isa response to the establishment and abolition of the organizational form of familybusiness in academic circles.In Section Two, the reasonability of family business is firstly discussed from theperspectives of economy and culture. Later, the life cycle theory of family business isillustrated, which discusses various life cycle theories and summarizes the life cycletheory of family business emphasized in this thesis, analyzing the various meanings indifferent life circles of Chinese family business such as newly establishing stage,growth stage, mature stage and etc..In the basics of innovation and changes of the system in Section Three, firstly, the theory of the innovation of enterprise system is illustrated, then from theunderstanding and awareness of the system as well as the knowledge andunderstanding of the enterprise system, instructs the enterprise system innovationtheory and then the meaning of enterprise system innovation. Then analyzes thetheory of institutional change, including the awareness of institutional change, themotivation of institutional change, the way of institutional change and so on. And thefocus is the analysis of institutional change motivation, which is from the aspects ofMarx’s theory of institutional change of unitary motive power of productivity and themotive power of institutional change of the western system school of economics.In the fourth section of the holistic problem of family business system in China,first, the internal problems of family business system in China are analyzed includingthe incomplete property rights system, the management mode barrier, employing rulesand constraints. Second, from the constraints of systematic supply of family businesssystem in China, analyzes the insufficient supply of formal system and thecontradiction between the formal and informal institutions.In Part Two, the analysis of institutional change of Chinese family businesssystem can be divided into four sections, they are: the evolving process and stages ofChinese family business system, the driver analysis of institutional change of Chinesefamily business system, the principal characteristics of Chinese family businesssystem at the present stage and the problem and counter plan of Chinese familybusiness system.In the evolving process and stages of Chinese family business system of SectionOne, the current stage and specific performance of Chinese family business systemare analyzed from three perspectives: from the perspective of institution evolutionleaded by the external system environment of family business, the analysis begins atthe confusion of the lack in institution supply stage, the speculation in chaotic stageand the choice in clear stage; from the perspective of the institution evolution thatreflects evolution of family ethical relationship, it is analyzed from four stages, theyare the starting point of family-based closure, the transition of semi-open system of enlarged familism, the dealing stage of the public system of form and the leadingstage of the public system of essence; from the perspective of the institution evolutionof enterprise life cycle, the changes and current situation of Chinese family businessin the institutions of property right, management and finance during the stages ofnewly establishing, growth and mature are studied. In the analysis of the aboveproblems, the discussion of the property rights system, management system andfinancial system are introduced, based on the decomposition of the property rightsconnotations of the family business, gradually introduces the pros and cons problemsof property rights theory of family business and discuss the basic systematic issues.Comb the application of the meaning of family business management system,centralization and decentralization----the dilemma of family business managementsystem as well as transaction costs, the choice of family business management systemand institutional innovation and other the basic theories on institutional economics inthis area. Discusses the relevant issues of the financial system of family business,analyzes the relevant impactive factors, at the same time learns the institutionalexperience from overseas family business financial system, explores financingproblems of internal and external sources, as well as the public companies transformof family business, capital markets and other issues and makes a certain research oninternal financial management of family business.In the driver analysis of the institutional change of Chinese family businesssystem, from the analysis of internal and external reasons for impacting the changesof family business system in China, discusses the problems of family business systemin China changes that should be solved. Analyzes the changes brought by theownership and management mode in internal reasons. On the other hand, in externalreasons, analyzes the impacts of the four aspects: the impact of economicglobalization, the impetus of technological innovation and the Internet age, thechanges brought by introduction of modern corporate organizational form and thepopulation policy.In the principal characteristics of Chinese family business system at the present stage in Section Three, the principal characteristics are analyzed in the following fouraspects: carrying forward institutional change with the property right system as core,the coexistence of informal and formal institutional change, in the process of theimitation of initiative and inductive institution change and the strong dependency ofinstitutional change to methods.Section Four focuses on the problem and counter plan of Chinese familybusiness system. Firstly, the problems of Chinese family business system at thepresent stage are illustrated from three aspects: the rapid, unordered short-termchanges due to policy change, formal institutional factors are shielded by informalones, the direction and efficiency of changes are influenced by the subject ofinstitutional change; meanwhile, some solutions are put forward with pertinence;stabilizes policy expectation, leads institutional change, attaches importance to theinfluence to institutional change by informal system and increases the capacitybuilding of the main system of family business.。In Part Three, organization systematic innovation of family business in China isincluded by four aspects, following the theoretical import, the analysis of the existingproblems of the current organizational system of family business in China, thedevelopment and experience of institutional change of the overseas family businessorganizations, the conceived ideas of organization changes of family business inChina are discussed.Section One is the formation mechanism and the history of the family businessorganizations. Through the introduction of the enterprise organizational theory andorganizational system of family business, the basic issues of organization systematicinnovation of family business are analyzed from three perspectives (structure, process,culture).The second section is about the analysis of development course and the existingproblems of organization system of family business in China. Through thestep-by-step and in-depth analysis of the development course of the organizationalform family business in China, combs the formation mechanism of organization system of family business in China then discusses the problems of organizationsystem of family business in China.The third one is about the experience from overseas organization systemdevelopment of family business. Through combing the historical evolution onoverseas organization institution of family business, comes to the experience andenlightenment of institutional changes of the overseas family business organization.Section Four discusses the problem of innovative ways and means toorganizational system of the family business in China. Exploring the more agreeableinnovation direction in the currant academic world as a target----corporate system orother choice of systems, analyzes the opposition and unity of the family business andcorporate system, the modern direction of the family business and modern enterprisesystematic transformation problems of family business in China.Part Four is about the analysis of institutional change of intergenerationalinheritance in the family business in China. There are four sections in this part, theyare: the dialectical understanding between intergenerational inheritance and thedevelopment of family business, the influencing factors of family business, the modeof intergenerational inheritance of family business and the institutional change ofintergenerational inheritance in the family business in China.The first section is about the dialectical understanding between intergenerationalinheritance and the development of family business, through the analysis of it, themeaning and several theoretical models that are famous in the currentintergenerational inheritance are illustrated, and the successful evaluation criterion ofintergenerational inheritance of family business is analyzed.Section Two is about the influencing factors of family business, and this includesinternal and external factors. Internal factors are the influence of family business inthe stage of development cycle, the influence of family business in the choices ofinternal governance structure, the influence of the litigant and the litigant’s successorof family business and the influence of family business culture; external factorsinclude complex impacts of external resources and influence of local culture. Section Three is about the mode of intergenerational inheritance of familybusiness. Through the comparison and evaluation of the model of overseasintergenerational inheritance of the family business, analyzes a variety of modes ofcurrent intergenerational inheritance of family business, which carried out acomparative analysis, including a domestic and international comparison, comparisonof urban and rural family business and the comparison of the many children and theone-child family business.Section Four is about the institutional change of intergenerational inheritance inthe family business in China. This section proposes the ideas of institutionalinnovation of intergenerational inheritance of family business under the urban-ruraldivision and the urban-rural integration and finally makes a preliminary study on thepossibility of intergenerational inheritance of family business introduced by the trustsystem.The concluding sector proposes the system construction of the innovation offamily business system in China. From analyzing unified and combined problemsbetween endogenous and exogenous system impacting system innovation of familybusiness, thinks of the balance issues of the current family business system innovationin China on independent innovation and comparative experience and discusses thepower problems of efficiency evaluation and continuous innovation of familybusiness system innovation in China.