Research On Family Business Governance Everlasting

Family businesses are prevalent worldwide,which play significant role in economic development.In a family business,often the business is passed from the older generation of the family to the younger generation.In a nation like China,where the value of “family” is greatly cherished,such generation inheritance in family businesses has found its solid cultural basis.As the development and expanding of an enterprise,the initial governance model may be no longer suitable for its continuous development.At this point,it becomes particularly important for family businesses to reform their corporate governance models.This is also the issue currently faced by many family businesses in China.In this article,the author follows the storyline of the internal fight for the control in “Z Kung Fu”and analyzes its shareholding structure,corporate governance as well as commentaries from different sources for the purpose of analyzing the internal control status of “Z Kung Fu” and difficulties in the family businesses in China.The author also provides analysis regarding the causes for the internal fight for the control in “Z Kung Fu”.Furthermore,the author also raises several suggestions regarding optimizing corporate internal control and generation inheritance in family businesses and hopes to be helpful for Chinese family businesses' reform.In the theory aspect,the author first provides an overall statement regarding the concept and definition of family business and further provides details regarding the forms,characteristics,advantages and disadvantages of family businesses;in addition,the author compares the several governance models of family businesses with several commonly applied models in foreign states and hopes to provide theory basis for case analysis.In the case analysis aspect,the author gives detailed analysis of the case of “Z Kung Fu”.“Z Kung Fu”was established in 1994,believing in the faith of “hard work pays off” and through its global chain stores,it presents the 5000 years of Dim Sum culture as well as the nutrition essence of Chinese cuisine to the world.However,there are several issues regarding its corporate governance,for example: theownership structure is not suitable to its business development,“family”is mixed up with “enterprise”,high risk due to its centralized decision-making process,fails to take advantage of external managers,lack of comprehensive incentive mechanism to non-family members of the enterprise,etc.The authors fully researched the causes for such issues and provides several suggestions regarding the reform of corporate governance of “Z Kung Fu”,i.e,establishing comprehensive internal control procedures and requesting the managers to set good examples for employees;with respect to the profit allocation,the author recommends “Z Kung Fu” to follow the good examples of foreign family businesses and establish family foundation to ensure the inheritance of family fortune.