Ethical Governance, Governance And Standards

Family Business is the most common form of economic organizations in the world. China's Family Business is developing rapidly, and has played an important role in creating social wealth, increasing government revenue, offering jobs and promoting social stability, and has become an increasingly important component of China's socialist market economy. So, the research of how to choose and optimize the internal governance mechanism to improve the governance efficiency of Family Business has great practical significance.Because of Family Business is a combination of contracts about property rights of enterprise being dominated by the kin, agent problem that caused by incomplete contracts is why the internal governance mechanisms we have to bring in. As the implementation device of these incomplete contracts, the internal governance mechanisms of Family Business are "dual three-area", which can be defined as "ethical governance mechanism" that based on family rules and "standard governance mechanisms" that found on market rules, and with incentive mechanism, constraints order and decision-making as the three areas.The thesis as a whole is composed of 6 parts. Chapter 1 is introduction, including the main topics of the background and the research purpose. Chapter 2 constructed a general analysis framework of the internal governance mechanisms of the Family Business. Chapter 3 analyzed the content and characteristics of the "dual three-area" internal governance mechanisms. Chapter 4 discussed the performance and balanced condition of the internal governance mechanisms. Chapter 5 used mathematical models to research the relationship between the dual internal governance mechanism and the growth of family business. In chapter 6, we conclude that for the purpose of raising the efficiency of Family Business, the key point is to choose the internal governance mechanisms flexibly and make them optimized. Chapter 7 is conclusion of the paper.