The Family Business Governance Model And Its Optimization

As a kind of enterprise organization, crossing over time and space, that is to say, crossing over developing stage of society and nations, family firm widely exists not only in low developed nations but also in much developed countries. Over 20 years' vigorous development, our country's family firm, making use of family's control mode has become the important pillar in national economy. However, lots of family firms, getting into a certain developing stage, universally encountered bottleneck problems, which affected family firms' persistent and rapid development.The contemporary Chinese family firm is in the background that the society makes the transition. In turmoil and repeated criticizing of more than one century, family culture was destroyed seriously. And especially Pan-family trust that connects human relationships is damaged severely, making its tie function of merging the social capital into family firm was weakened greatly. In the state that the society makes the transition, legal credit system is not perfect, because of which family firm is not easy to obtain strong support of traditional ethical credit resources like Jin Dynasty trader, Hui trader and modern national entrepreneur. On the other hand, owing to the incomplete legal credit system, most private enterprises have to choose family's control mode and face difficulties to change into enterprise's control mode.Family's control mode is of efficiency in certain stage, especially during the original course of enterprises. But with the further development, the drawback reveals out gradually. Only through innovation and reform, family firm can develop healthily.Contemporary family firm in our country existed only twenty years. Our nation is a country with most largest and strongest family culture tradition, thus the family culture and Pan-family culture, developing from that tradition through long time, have deeply influenced the management of family firm. Therefore, we cannot sedulously imitate and blindly copy modern enterprise system of western countries when choosing enterprise's control mode. Only this kind of enterprise control mode, well meeting such environmental factions as the politics, the law, economy, historyand culture of our country, can bring the best control efficiency.This paper discusses that the following methods are useful way to optimize family's control mode: First, perfect social trust, advocate credibility concept, and build trustful external environment. Second, optimize stock right structure and capital structure, realize the stock right pluralism and create new channels of financing. Third, optimize control mechanism both internally and externally, achieve that entrepreneurs surmount themselves, strengthen the mechanism construction of talents choosing, training and encouraging, promote the control of the creditor, the inter mediate organization and external market over enterprises.