Research On Corporate Governance Of Family Business Based On Social Capital Perspective

Family Business is a well developed and well formalized form of enterprise in current business world. Ever since Berle and Means'ideas on the theory of "the separation of ownership and control on enterprise governance" and Chandler's "manageable capitalism" theory, the governance structure inside the academic research of family business field has become the core issue among all related debates. Some researches focus on the condition upon main segregation by ownerships and manageable rights in side enterprise governance structure, and through the assumption of build up system on mutual benefit factors to decrease the conflicts in between the roles of principal and agent. However, depends on its complicacy and uniqueness, the practical governance issue still has certain differences from the traditional principle-agent theory among family business format. In addition, the relationships in between all the jointed members of the family business and their social dynamic convergences such as mutual trust, social networking, and individual connectivity are basic reasons that bring influence to the governance of family business. And through these details they thus constructed the main elements of family business structure.As trying to define a new paradigm in the research of social science field, the theory of social capital emphasizes trust, regulation, and social networks in which bring the unofficial systematic influence toward economic activities. These influential facts provide a possible analytical perspective on family business'governance structure. Within the social capital resources among family business, both material capital and human capital are co-existing production resources which bring strong impact on the governance structure of family business through unofficial systematic methods. Although, many researches have done effort from social capital influences toward the analytic research of organization character and managing style, still there are some deepen theoretic analyses need to work in. And, the research on relations of social capital and the governance style of family business is worth for academic attention. This paper is fallowing on the research structure based on "Institution-Behavior-Performance" method. The main theme is around the subject of "social capital and the governance style of family business". The entire research is defining the following questions:First, the discussion on theory and issues are of social capital relations within family business and its basic issues of enterprise ownership. Second, the analysis of functionality when social capital influences the governance structure based on family business system. Third, what is the relation and effectiveness when social capital applies its impacts on the performance issue within the system of family business?Fundamentally, this paper first analyzes the basic theory on social capital of family business in order to define the concept on social capital of family business, and named it "three layers of double sides" structure. In addition, the research focuses on the dual property attribute characters in the social capital of family business. It also pay attentions on property rights and property structure issues on family business based on the theory of property rights; simultaneously, the main research concept and theory on social capital of family business and its governance structure are based upon it. Within the basic research concept, this paper also focuses on the inner social capital, inter-organizational social capital, and the entrepreneurial social capital to research the relational governance, network governance and entrepreneur political participation of family business. The research results are:(1) when family business faces two different agents and "two sides of principal-agents problem", the relational governance based social capital will be selected as the main governance principle. (2) The basic formations of networking system among family business organizations are material capital, human capital, and social capital. They are in the term of economic definition of contract relation, and among the family business organizations, social network managing structure is toward the preference of increasing social capital resource. (3) In the current economic transformation trend, political participation has become Chinese family business entrepreneurs'major method to increase their social capital and thus through the increased outer mutual benefit managing, it is the major long turn investment for achieving certain profit principles in Chinese family business development research.The main innovative points in this research are:First, introducing the idea of social capital theory into the family business research field. It systematically analyses the social capital basic theory issues inside family business field. By applying the definitions of social capital, business structure elements, and its analytic material attributes among family business system, it brings the foundations of theoretic development for the related researches. Especially, when the research focuses on the issue of property right within the social capital of family business, it provides wide perspective to understand the co-relations between social capital, material resource, and human capital. Second, from the social capital influential perspective to analyze family business inner relation management, enterprise networking management, and entrepreneur political participations, these three managing developments, enriched the researches of governance structure on family business field. In this research, it emphasis the social capital as the essential productivity of family business, and thus through the understanding of its governance effectiveness and performance, it enforces the other possible ideas for the research on family business governance structure. This will help others to further understand the unique governance pattern among Chinese family business. Third, from the idea of entrepreneurship on participating of social political influence to increase its social capita resource, it testifies the practical result. And it gives many paradigms'research data for related academic considerations. Through toward these well do family business enterprise analysis and researches, the research explains the popular phenomenon that why in current condition, "family business entrepreneurs are willing to participant major political activies" and this certainly comes with meaningful and practical reasons.