Research On The Family Business And Family Executives Controlling Shareholder Cooperation Path

Berle and Means proposed the issue about the separation of two rights in1932.Rosssummarized it as principal-agent theory in1973.Many scholars are affected by Berle andMeans.They believe that the principal-agent is arised by the separation of ownership andcontrol.But in fact,the specialization of labor is one reason.Jean-Jacues Laffont&DavidMartimort（2002）,He Daan&Su Zhi huang have the same viewpoint.With the enterprisedeveloping,the founding controlling shareholders of family firms has no enough capacityor energy to realize the ideal control effect.They must hire some managers to help theirmanagement.In China family ethics culture,relationship is the structure of grade and thecenter ourselves.So the founding controlling shareholders is to hire the closestrelationship’s people and then developing as the structure of grsde.The family firm willhire many family managers.So the relationship between controlling shareholders andfamily managers is very important.It different the general agency relationship.The controlling shareholder of familyfirms is the same family with the family managers.So they will have more opportunities torealize the cooperation by the special link.Some scholars believe family shareholders andfamily managers should be cooperation.Because they have the same target andinterese,unity is inevitable.This view is obviously simplistic and a large gap with theactual.He Xiao Gang,Li Xin Chun and Lian Yan Ling(2010)believe that family membersalso have individual concept.The relationship and emotion is different.They may beenemies and uncooperation because of economic interests and control. So it’s veryvaluable to study the cooperation of controlling shareholder and family managers in familyfirms.There is few scholars pay attention to the problem.This paper absorb and draw on theprevious research achievements.It combined with social capital theory,routine evolutiontheory and ethical culture theory to research the cooperation of controlling shareholdersand family managers in family firms.The paper builds the dual path of cooperation theoryis to help to explain the cooperation of controlling shareholders and family managers infamily firms.The paper analysis the type and reason of uncooperation between shareholders andoccupation managers,family shareholders and family managers,family shareholders andfamily mangers in chinese family firms by a large number of case studies.It is thefoundation of the following research.The paper draw on the multi-disciplinaryapproach.The paper compare the evolution of competition and cooperation with principal-agent theory to get the essence of the incentive theory and summarize theimplementation mechanism of cooperation path.Then the paper study the cooperation ofcontrolling shareholders family managers in family firms by social capital theory andChina family ethics culture.The paper explains the mechanism of social capital cooperationpath and then sums up the dual cooperation paths.And then the paper explains that the dualcooperation paths is influced by routine.At last,the paper prove the conclusion by threelarge cases.The research ideas of the paper develop along the propose problem,analysisproblem and solve problem.Specifically,the main contents of this paper are as follows.1.Definition of literature review and related concepts.The paper define the keyconcepts of family firms,social capital and China family ethics culture and analysis thereason and insufficiency of principal-agent theory.2.The classification and reason analysis about the uncooperation between controllingshareholders with family mangers in Chinese family firms.The paper analysis thecomplexity of principal-agent in Chinese family firms.And the the paper analysis theclassification and reason of uncooperation in many cases by many cases.3.To investigate the nature of incentive and constraint theory,and then analysis thenature,insufficiency and mechanism of the existing path.4.To propose social capital cooperation path and build a dual cooperation pathframe.The paper analysis the special cooperation between family shareholders with familymanagers by social capital and China ethic culture,and then explains the mechanism ofsocial capital cooperation path.5.To analysis the dual cooperation paths of controlling shareholders and familymanagers in Chinese family firms by evolution of routine.And then the paper explains theinfluence from routine.6.Case Study.To prove the result by study Li&Fung company,Fotile KitchenwareCo.Ltd company and Hope Group company.The important conclusion：(1) Incentive is the important path to realize cooperationbetween shareholders with managers.It improves the forecast accuracy and increase theopportunity cost to guide cooperation.(2)The personal characteristics of social capital fit todeal with the complex interpersonal relationship between controlling shareholders andfamily managers in Chines family firms.(3)Routine can influence the conformation of dualcooperation paths.The influence can be positive or negative.