Institutional Innovations Are Called For In Chinese Family Enterprises

As a popular institution of Chinese private enterprises, thesystem of family enterprise has great influences upon the developmentof Chinese private economy. It makes up for the deficiency of the formalsystem to a great extent. However, with the gradual perfection of thesocialist market economy, the increasing globalization of worldeconomy and culture and the development of Chinese private enterprisesthemselves, traditional family enterprises show their inevitabledisadvantages: isolated circulation of necessary funds, appointing peopleby favoritisim, centralization of power by family leader and backwardenterprise culture and so on. All these hinder greatly furtherdevelopment. To adapt to the market economy and the evolutional lawsof enterprises development, family enterprises need innovations inproperty right system, management, use of personal and enterpriseculture. Impersonal management and trading should take place ofmanagement and trading based on blood relation, and modernenterprises management of unstandard management. Besides, a goodsocial environment should be provided. Improvement on all these willbe sure to lead to a more effective family enterprise system.This paper consists of five parts:Part 1: Rationality of family enterprise system in ChinaPart 2: Disadvantages of family enterprisesPart 3: Obstacles to innovations in family enterprisesPart 4: Ideas on making innovations in family enterprisesPart 5: Construction of a good external environment for the innovationof family enterprises...