The Study On The Kinship In The Family Business

Family business is an important type of enterprise organization. It consists of family system and corperation system. Both family system and corperation system have different expectation and request to the business respectively, which makes the problems about family business more complicated. The study focuses on the family system and researches how the kinship performs and what strategies should be applied for dealing with the potential problems, thus how to mix culture with economics will be further refleted.This study describes the case of H in detail and divides the kinship into three parts: the core of kinship, the outer layer of kinship and the imitated kinship. Firstly, the core of kinship in the case is conjugal relation. Husband and wife expand their social capital, start their own business and also increase the social capital of firm. They coordinate the development of business. And the family play the different roles: Husband plays the role of authority, while wife regulates the emotion of family members, causing the harmonious relationship between the development of enterprises and family members. Secondly, the outer layer of kinship in the case refers the relatives of the couple, who usually occupy the significant positions in the firm. The relationship in the firm extends from the family system and embeds in the net of kinship. The members deal with things in the same principle as in the family. As an informal institution, this principle is against the formal institution. Every decision turns into the result of the game between two institutions. Entrepreneur adopts some strategies to solve the problems, e.g. to classify the type of staff, strengthen supervision, or change the mechanisms of trust and so on. Finally, the imitated kinship in this case means non-family members, who have different values towards the firm. They are not as loyal as family members to the firm, which sometimes causes troubles. Therefore to treat them like family members can make them stand on the family's own side and the family's principle can be used to control them. This process of imitating can reinforce trust, supplement the formal institution and increase individual feelings of acceptance. However, the three parts of kinship have their own principle of performing which decides the order of a family business.