External Inheritance Mechanism And Effect Analysis Of Family Business

Family business is the backbone of my country’s private economy.How to complete the external inheritance of family business and evaluate it is a concern of many entrepreneurs.This paper adopts the method of combining theory and case to carry out the research.Reconstructing and solidifying the successor-specific assets is the key to external inheritance.Specialized assets can be divided at the individual level and the organizational level.Based on this,this paper builds a corresponding cultivation mechanism.In terms of solidifying special-purpose assets,this paper analyzes from two aspects of supervision mechanism and incentive mechanism,and subdivides it into internal supervision and external supervision,short-term incentives and long-term incentives.Aiming at the external inheritance effect of family business,this paper establishes an analysis framework based on the time dimension.The short-term effect is measured by the cumulative excess rate of return,and the medium-term performance is analyzed from profitability,operation,debt repayment,and growth ability.In addition to family reputation,a principal-agent effect analysis was added to the long-term effect.This article selects Midea Group as a case study.The results show that He Xiangjian cultivated Fang Hongbo’s ability by means of business unit restructuring and gradual departure,and formulated the "Decentralization Manual" to enhance the culture of professional managers.In terms of supervision mechanism,He Xiangjian has appointed confidants to the board of directors internally,increased independent directors,and introduced institutional investors externally.In terms of incentive mechanism,He Xiangjian gave Fang Hongbo the highest salary in the industry,and launched a series of stock option incentives.In response to this incident,in the short term,the cumulative excess rate of return reached 13.47%,indicating that the market is optimistic about this inheritance.In the medium term,Midea’s profitability,debt repayment,and growth capabilities have all improved after inheritance.In terms of operating capabilities,inventory and accounts receivable turnover ratios have improved.In the long run,the family reputation has improved,and the principal-agent problem is not significant.