Study On The Governance Model Selection And Application Of Family Enterprises In China

Since the policy of reform and opening-up in China, Chinese family business has emerged in large numbers. With decades of hard endeavor, they have now played an important part in national economy. However, with the pace of development in new century, family business is more and more experiencing a vague period, a period of transformation. That’s because, many family business units are still using the old management mode they adopted at the start, which family members take all the ownership and control power of the enterprise. This mode will not fit when the business unit grows mature and bigger, some wise entrepreneurs have perceived this obstacle, thus tried to adopt professional managers. But it’s not easy. That placed a hard question to family business: in what condition what management mode on earth can achieve the maximum value of an enterprise and can promote the business to the next level? What factors will infect family business and what are chooses infect family business? Those questions are crucial to the next step of family business.This paper consists of introduction and seven parts, First, this paper states the background and purpose of the research subject, then quotes some authoritative theories for the following introduction in main part. Next Part elaborates the two management modes, giving the definition of the two management modes, and explains the two modes’ characteristics. It also researches the factors which give the impact on the family business management mode choices. How they turn up and what impacts will they bring to the business performance and value? According to second part, in third part, it is about how to choose between them? Next part, this paper analyses some collected data and proof the purpose. And then, this paper analyses different family business modes and their advantages in Korea, Japan and America. And, according to the different management modes in different countries’ family business, this paper gives some advices to the Chinese family business. In the end, this paper also offers some improvement advices on some representative management problems.This paper results in 4 conclusions according to the research: Firstly, the family business’ s performance and value which chooses the old family business management mode is negative correlation to the business growing. Next, the family business’ s performance and value which uses professional manager management mode is positive correlation to the business growing. The third one is the family business which using the old management mode is better at the start. The last one is the family business which using the professional management mode is better with its development.In addition, the family business using the professional management mode is better with its development. However, the family businesses using this mode are not too much.This paper employs diversified research methods like Case Analysis, Quantitative Analysis, Documentation Method. However due to the limitation of information availability and time arrangement, the demonstration process may not be so adequate or convincing, which should be well improved in the next research.