Strategic Change And Corporate Performance In The Intergenerational Succession Of Family Business

The history of business family can be tracked back to long time ago,and it has always been an important component of the world economy.Family business in China also has a long history,but going through tortuous development,they finally ushered in the peak of development until 1970s,and a large number of family businesses began to appear and grow at this stage.The first generation of entrepreneurs gradually step into the twilight years after several decades,and intergenerational transition becomes the problem they have to face.However,inheritance is not just job handover and property inheritance.It is no easy task to realize the long-term success of family businesses,so it’s normal that enterprises are short-lived more and long life less.Therefore,since ancient times,the inheritance of family businesses has always plagued business owners.At the same time,the high-speed economic stage under the low-cost factor dividend has passed,and the tide of the information age has swept through,and technology has completely subverted people’s production and life style.After experience early rapid development,many traditional enterprises meet with a "mid-life crisis",and it’s urgently for them to inject new energy through reform and innovation.When the intergenerational transition of family business encounters strategic change,the two major problems are intertwined,which brings more challenges to the enterprise and also collides with new sparks.The new generation,who grew up bathed in the sunshine of the new era,received better education,and had more diverse cultures,broader horizons and more cutting-edge perspectives,which provided natural fertile ground for strategic change.Therefore,this paper focuses on such enterprises that implement strategic changes during the intergenerational transition period,trying to explore their strategic changes and the impact on enterprise performance,expecting to give useful advice to the intergenerational transition and strategic changes of family businesses.This paper selects Vatti Co.,Ltd.as the research object,which has already finished the intergenerational transition successfully.This paper divides the intergenerational transition process of Vatti into three stages:first-generation governance,two-generation co-governance and second-generation management,and analyzes the strategies of brand,product,channel,technology and talents in these three stages.It can be found that Vatti’s strategy has changed a lot after the transition from two-generation co-governance to second-generation independent management.Furthermore,from the enterprise’s exterior and interior,this paper try to find out why Vatti implements strategic change.This paper selects the market data during the second generation becomes the chairman of the board and financial data before and after the second generation independently managed the enterprise,analyzing the performance changes caused by strategic changes,and then summarizes the impact path of strategic changes on performance.At the end of the article,conclusions and enlightenment are summarized,which can offer some references for the intergenerational transition and strategic change of family business.Through the study,three conclusions are drawn:first,intergenerational transition can promote the implementation of strategic change in family enterprises,and will affect the amplitude and rhythm of strategic change;Secondly,in the process of intergenerational inheritance,strategic change will be influenced by many factors,and the successor may act as an important part to strategic change;Finally,carrying out strategy during intergenerational transition period can improve operation performance.As far as the research,some enlightenments are put forward:first,a reasonable and detailed inheritance plan that is recognized by both inheritors and successors can help enterprises to go through the inheritance period better;Secondly,the growth experience of successors in this case gives other family enterprises facing intergenerational inheritance a new idea,and the way of training successors can be expanded;In addition,undoubtedly,it’s vital to determine and carry out the strategy,but the evaluation and feedback of strategy are also very important,especially in the current changeable external environment,it is even more necessary to evaluate and adjust the strategy in time.