Strategic Change And Corporate Performance Research Under The External Inheritance Of Midea Group

Since the reform and opening up,family businesses have continued to grow and have become an indispensable part of the national economy.Nowadays,the founders of family businesses are gradually entering the age of "retirement",whether to choose internal family inheritance,"children inherit the father’s business",or choose to select suitable professional managers for training is a major problem faced by family enterprises.Only by successfully surviving the difficulties of inheritance can the family business continue to grow.At present,the research on the external inheritance of professional managers introduced by family enterprises focuses on comparing and analyzing the performance changes of enterprises before and after external inheritance,but the inheritance of family enterprises is a slow process,with a large time span,and simply comparing the performance before and after inheritance lacks credibility.Therefore,this paper focuses on the changes in the strategic behavior and corporate performance of family enterprises in the long-term dynamic process of inheritance,and will deepen the research into multiple stages of inheritance.In order to solve all aspects of the multi-stage succession problem,family businesses will inevitably need to make corresponding strategic changes to ensure the smooth progress of succession.This paper analyzes the multi-stage strategic change and related performance of the external inheritance of Midea Group through the event research method,entropy value method and mutation progression method,and divides the inheritance process of Midea Group into three stages,namely "participation management","joint management" and "formal succession",showing the implementation process of strategic change in multiple stages of Midea Group inheritance,and dividing a series of strategic changes into four aspects: marketing system change,technological change,product and service change and equity structure change.Study the content and extent of multi-stage specific strategic changes.From the perspective of market performance,analyze the market response of strategic changes at each stage,so as to determine the attitude of external investors towards each stage of Midea Group’s succession;From the perspective of financial performance,analyze the changes in financial indicators of Midea Group at each stage of inheritance,and show the implementation effect of strategic changes at each stage;Finally,from the perspective of innovation performance,this paper focuses on analyzing the effect of professional managers leading Midea Group to seize market opportunities and actively innovate and reform after they officially take over.This paper finds that: first,Midea Group will implement various types of strategic changes in multiple stages of inheritance,and both inheritors and heirs may be the leaders of the strategy;Second,external inheritance promotes Midea Group’s strategic change,which leads to changes in Midea’s marketing philosophy,technology,personnel,products,equity structure,etc.,thereby affecting corporate performance,and Midea Group’s strategic change in the "formal succession" stage is more significant.Third,the strategic changes inherited by Midea Group have achieved better performance in the "formal succession" stage,which is closely related to the strategic changes led by professional manager Fang Hongbo;Fourth,effective incentive mechanisms can better motivate professional managers and promote the long-term success of external inheritance.This paper selects the case of external inheritance for research,which enriches the macro research of inheritance to a certain extent,and at the same time,this paper supplements the relevant content of strategic change theory in family business inheritance by describing the process and degree of strategic change in multiple stages of external inheritance of specific cases,and provides reference for other family enterprises facing inheritance problems,which also has certain practical significance.Finally,through the study of Midea’s external inheritance,this paper obtains the following enlightenment: first,the inheritors are well prepared to cultivate professional managers and slowly delegate power;Second,family businesses take the initiative to make strategic changes to maintain their competitive position;Third,the overall listing of family enterprises and the multi-level equity incentive plan realize the incentive and supervision of professional managers.