The Authority Construction And StrategicChange In Intergenerational Succession Of Family Business ——Based On The Case Of ’Dayu Irrigation Group’

Family business has long been regarded as the mainstream form of modern enterprise organization.And it always plays a vital role in the global economy.In the course of China’s overall economic and social development,family business is an indispensable economic organization in the development of China’s non-public economy,which greatly promotes the rapid growth of national economic strength,and it is the core force to promote China’s economic take-off.At present,due to the aging of the first generation of family managers and the rising of the new generation of family members,China’s family businesses have entered a peak period of intergenerational succession.As far as the family business itself is concerned,"succession" is not only actually a key "node" in the overall life cycle of the family business,but also an inevitable "doom" in the long-term development of the family business.However,the intergenerational succession of family business is a multidimensional problem in nature,and the successful realization of succession means that most of the existing core elements should be retained and adjusted appropriately.For most family businesses in China,they lack rich succession experience and are deeply affected by the special "family culture" since ancient times,making it more difficult for family businesses to achieve effective succession.Therefore,at the present stage,how to achieve intergenerational succession and the goal of sustainable operation of family businesses more smoothly has become a difficult problem that many family businesses in China must overcome.According to the comprehensive analysis of family business succession cases at home and abroad,it can be found that in addition to the decision of the founder,the willingness and ability of successors,political and business environment and so on,sudden crisis is also one of the important factors affecting the smooth succession of family business,and gradually attracts academic attention.It mainly means that if the founder of a family business has an accident,this will lead to an unprecedented change in the development of the company.Under these circumstances,the intergenerational succession of the company will be very passive.Over the years,many company founders have left their jobs without any preparation due to unexpected accidents and disasters,leading to more pronounced and changeable problems in the succession of family businesses.It should be pointed out that the founders of many family businesses in China have strong working ability,and most of them have too centralized power,which directly results in their relatively lagging selection and cultivation of successors.If the founder meets an emergency and leaves quickly in a short period of time,it will be a disaster for many companies.Authority is a characteristic of family businesses.Authority construction is a key link in intergenerational succession and plays an important role in the long-term development of enterprises.In the process of family business growth,the second generation has the legal status of the heir to the legal property rights,but this does not mean that they have the authority recognized by the organization.On the contrary,the"loss of authority" and the resulting generational differences in the family business may cause the new generation of successors to be questioned about the legitimacy of authority.As an effective way for successors to establish authority,strategic change is conducive to the improvement of their own legitimacy,so that successors can build authority by obtaining legitimacy,which is often the choice made by many family business successors after taking office.The intergenerational succession caused by sudden crisis often poses greater challenges to the establishment of the authority of successors,but it also endows such cases with higher reference significance and research value.This paper takes Dayu Irrigation Group（Stock Code:300021）as the case study object.The company has been listed on GEM.In the evening of February 15,2017,Wang Dong,the chairman of the company,died suddenly due to a heart attack.His son Wang Haoyu took over as chairman of the company successfully with the early cultivation of the visionary founder and the active cooperation of corporate executives.So this case has ample typical value.Based on the existing literature at home and abroad,this paper fully absorbs the experience of existing research,adopts the method of case study,and innovatively combines the authority theory,strategic change theory and imprinting theory to focus on the overall succession event process of Dayu Irrigation Group.At the same time,it also further explores the short-term performance evaluation based on the event study method,and the change of company value under the long-term financial and non-financial performance evaluation.In addition,by collecting and combing the past experience of the two generations,the process of second-generation entrepreneurs gaining family leadership and recognition,the cultivation mode of successor as well as the changes before and after family succession,this paper studies the authority construction and strategic change of Wang Haoyu in the process,and analyzes the reasons for the smooth succession and handover of the case company in the face of emergencies.The main conclusions of this paper are as follows:First,founders’conscious selection,planning and cultivating of successors in advance can reduce the risks and losses brought by sudden crisis to intergenerational succession;Second,the successor of the family business can establish authority through strategic change;Third,the specific "imprinting" will have a specific impact on the successor’s decision.To sum up,this paper draws the following enlightenment:First,for family businesses,it is crucial to make succession plans in advance,and this is helpful for managers to establish authority earlier and faster by cultivating heirs as soon as possible and guiding them into the role of successors;Second,in the process of succession preparation,family businesses should constantly strengthen crisis awareness;Third,in the process of intergenerational succession,the role of strategic change in the authority construction of successors cannot be ignored;Fourth,family business founders should pay full attention to the influence of "imprinting" on heirs’ decisionmaking.It is hoped that the relevant conclusions and enlightenment of this case can provide reference for the intergenerational succession of Chinese family businesses,promote the transformation of the deep cognitive structure of heirs,and the founders’planning and further thinking on the selection and cultivation mode of successors,and enrich the succession case base and academic research achievements of family business.