Study On Intergenerational Succession And Influencing Factors In Family Business

Family business is considered as a kind of ancient social organizations, which are excisting and developing heavily, contributing to national economy in a profound way. In pace with a large number of founders fell into old age, family enterprises have to face a serious issue about inheritance. Brooklyn Family Enterprise Research Institute shows that about 70% of total family firms cannot be able to be taken over by the next generations of the original founders. Besides, only 12% of family firms can be managed by the third generations while the percentage of successful management of the fourth generations decreases into 3%. According to the National Federation of the survey, it reveals that the average life expectancy of China’s private enterprises is only 2.9 years, where 60% of private enterprises will go bankrupt within five years and 85% of these enterprises will die out in 10 years. How to promote successful family business heritage frequently and then guarantee the everlasting of family business has become a hot topic during the domestic scholars. Intergenerational family business is a long and multi-stage process. A variety of factors, such as the entrepreneurs’ willingness of outgoing, the preparation of successors, family relations are all generating the outcome of intergenerational transmission. Scientific analysis is quite significant to explore the factors which influence the family business by the inheritance process, which help family businesses break their own limitations, and achieve a smooth and stable transition heritage.Basing on the review of the previous literature, this paper summarizes the theoretical framework of family business intergenerational transmission factors, which shows as founders, successors, business enterprises and external environment. Questionnaire is applied as method to investigate the status of family business in Wuxi City. Moreover, Data processing and empirical analysis are implemented by operating SPSS 18.0(software).Empirical studies have shown that founders, successors,business enterprises and external environment generate practical impact on family Business intergenerational transmission. As the different sizes of enterprises, these influences bring significant differences. Simultaneously, the strong willingness of incumbents of turnover intention, better family relationships, better ability of resolving conflicts within the family and superior ability of successors have positive impact on the high level of satisfaction of heritage, showing the tendency of impact of traditional values on family business. In the end, the paper puts forward suggestions on the successful succession of family business in the empirical research.