Chinese Family Business Succession Issues Research

In the modern economy, the family business holds the important status. The discussion of family business is continuous, a quite part of scholars hold the opinion that the family business is bad. According to the research, 80 percent of the family business can't be inherited to the second generation successfully, and only 13 percent can be inherited to the third generation. The lack of lasting vitality provides evidence to the people opposing to the family business. And the successful succession is crucial for the development of family business. In our country, most family businesses face the problem of succession, so how to prepare for the succession, avoiding the bewildering circle of "the first generation to start a firm, the second generation to keep the firm, the third to destroy it", is a realistic question which they must take into account.There are mainly two reasons for the problem of the succession: The first is that the life cycle of the individual and the family has great impact on the power transfer, and the succession is every family business sooner or later has to face. The second is that the succession is to meet the demand of the family business development, as the patriarch has the ability deficiency because of the growing of the firm and the changing of external environment, which forces them to consider the power transfer, so the next generation who has the ability could manage the enterprise. And the second one is more important to Chinese family business between the two reasons above.There are about four patterns for the succession: son-father's trade, the new successor produced by the market competition, the children creating new enterprise, the introduction of professional manager. And son-father's trade is appropriate for the Chinese family business. It mainly has the following characteristics: Interior, The succession take place inside the family; Validity, it costs lowest and is most effective, and can also reduce the contradiction and shakes in the process of the power transfer; Uncertainty. Too much things are unexpected, and the successor should be highly competent. The Chinese family business chooses this pattern is also the result of the external environment. The traditional culture of Chinese ancestor and relative is one of the reasons making the family business owner naturally choose the son-father's trade pattern. The market situation and the system environment is not proper for the cooperation between the family firm and exterior person, and in order to dodge the exterior person's moral risk it is better to choose the successor within the family. Moreover, in our country the professional manager market is still not mature, "lacking the appropriate exterior person" also make the family business mainly choose the internal person. Besides the succession pattern, there is other questions: Lacking the plan of succession, the family interior dispute, the interpersonal relationship succession is difficult as well as the dictatorship of householder.How to solve the problems above? This paper proposed four Countermeasures: First, carrying on the system innovation to establish the advantageous environment system for the succession; Second, establishing the advantageous family business culture for the succession ; Third, training the successor properly; Fourth, consummating the process of the management transition.