Research On The Risks Faced By Family Businesses In De-familiarization And Its Governance

Since a century ago,family business has developed into a more mature enterprise form in the world economy.The origin of family business is a little later than that of foreign countries,but after more than 50 years of development,it has formed a large scale.Family business can adapt to the modern enterprise changes and grow up in such fierce competition,which fully reflects its superiority.However,the family business,like other forms of business,also has natural shortcomings,such as limitations of human resources,obstacles in organizational mechanism and unscientific decision-making procedures.In the development process of family enterprises,many family enterprises began to seriously examine the disadvantages of family governance due to the limited development in the future,and began to plan to realize the upgrading of family business through the implementation of "de-family governance".However,there are a lot of uncertain factors in the process of family removal,some enterprises were faced with many difficulties in the process of de-familiarization,and eventually leaded to the failure of de-familiarization and even serious management crisis.Therefore,how to resist risks and successfully transform in this process has become a difficult problem for many enterprises to solve.Based on the internal and external environment of Country Garden,this paper makes a comprehensive analysis of its process of de-familiarization,and verifies that there is some resistance to de-familiarization of family enterprises.Combined with the principal-agent theory,altruism theory and psychological ownership theory,the risks faced by Country Garden in the process of de-familiarization and the corresponding governance measures are discussed.It is concluded that Country Garden was faced with agency cost risk,non-delegation risk and emotional crisis risk in the process of de-familiarization.At the same time,the governance methods of corresponding risks are explored.It is found that Country Garden has adopted some key measures in risk management,such as introducing professional managers,developing talent training plans,implementing equity incentives and adjusting equity structure,and finally successfully realized the transformation and upgrading of family enterprises.Based on the observation of the financial and non-financial impact of Country Garden,it is found that de-familiarization has brought positive significance to the enterprise on the whole.After sufficient analysis,the conclusion of this article is drawn: 1.Family business may face risks in the process of de-familiarization governance,such as agency cost risk,non-delegation risk and emotional crisis risk;2.Family enterprises should introduce professional managers,develop internal talent training plans,equity incentive,adjust equity structure and other measures to deal with the risk of de-family;3.On the premise of effectively controlling the risk of family removal,family removal has a positive effect on enterprise performance.Based on the case,this paper draws several enlightenments: 1.we should optimize the professional managers market as soon as possible and form a legal system for professional managers;2.It is a long-term strategic process for enterprises to de-family,which should be carried out in a planned way;3.Corporate decision makers should have an overall view and constantly adjust their future development strategies in combination with market environment changes.