An Analysis Of The Influence Of Family Business Internal Control Environment On Business Performance

In China,family business,as the main force of economic development,plays a positive role in improving the living standard of the country and the national economy,and is an indispensable central force to promote the steady growth of the national economy.Family business has its own advantages in some aspects,such as convenient communication and so on,but in many aspects there are also deficiencies and defects.Among them,internal control has always been a prominent defect in Family Business Governance,internal control environment is the most basic for effective operation of internal control system.The internal control environment will directly affect the implementation of other control effect.If the quality of internal control environment is poor,no matter how perfect the internal control system design,it will be difficult to achieve the control objectives because of the weak foundation,and then have a great impact on the enterprise.Therefore,the internal control environment has the extremely vital role to the family business enterprise internal control.Since the control environment has such a great impact on the family business,and the business performance is the best embodiment of the development of the family business,this paper mainly studies and analyzes the impact of the internal control environment on the business performance.This paper selects two family-owned enterprises in the same industry ——BYD and Zhongtai Automobile,whose main development direction is the hot "new energy automobile" in recent years,with BYD as the industry leader and Zhongtai facing delisting risks.This paper compares and analyzes the five elements of its internal control environment —— Organization structure,development strategy,human resources,corporate culture and social responsibility.Then,the performance of an enterprise is graded mainly from four aspects:profitability,asset quality,debt risk and business growth,and is compared with the internal control environment,look for connections to the internal control environment.Finally,it is found that the internal control environment of the family business has a positive impact on the profitability and business growth of the business.Finally,in view of the problems existing in the internal control environment of the family business,this paper puts forward the corresponding countermeasures,in order to bring help to the development of the family business.In the past,most of the studies were empirical studies,and most of them were independent studies of family business or internal control.There are few researches on the internal control environment of family firms and the combination of them with business performance.Therefore,this paper adopts the method of case study to study the effect of Internal Control Environment of family business on business performance,and adopts the method of double cases,two companies with good internal control environment and bad internal control environment were selected for comparative analysis,so as to show their different effects on business performance more obviously.It is hoped that the research of this paper can be used for reference and improve the performance of family business from the perspective of internal control environment.