Research Of Manager-trust Mechanism In Chinese Family Business

This paper mainly discusses the question how to build the manager-trust mechanism to harmonize the contradiction between the owner and the manager in Chinese family business. Because the family business can't grow rapidly without the participation of the manager employed outside, alleviating the trust contradiction between the owner and the manager becomes the important task that must be overcome in many family businesses. The paper intends to set up the manager-trust mechanism to enhance the effective trust, balance the trust relation and relax the trust contradiction between the owner and the manager.The paper starts from the current status of manager-trust in the family business and the underlying reason, and discusses the limitation of Familism Trust (F T) and the necessity of building the manager-trust for the development of Chinese Family Business. Then the Game Theory is exploited to demonstrate the possible ways to build trust, such as cooperating anticipation, the constraint of morality, the mental incentives and the relationship between the players. And with that,the factors influencing the establishment of manager-trust are studied. The factors of manager self are classified into three aspects, i.e.character&morality, competence and Guanxi, then the model of Character & morality-Competence-Guanxi (Cm-C-G) is presented which helps assessing the creditability of manager, and the dynamic changing process of manager-trust and its characters are discussed subsequently. Based on the discussion above, the paper continues with research on the manager-trust mechanism. The trust mechanism consists of four parts, including the trust-gestating mechanism, the trust-entry mechanism, the trust-evolvement mechanism and the trust-exit-mechanism. The favorable organization environment, the entry into owner's trust circle, the evolvement of manager-trust and the exit from the trust circle are involved in the mechanism respectively. The manager-trust mechanism is designed to provide the favorable organization environment fostering manager-trust, set up the entry barrier, promote the well-ordered development of manager-trust, and increase the cost of perfidy to prevent the manager's opportunism behavors. In the paper, the trust evolvement mechanism is studied in detail, including trustworthiness-assessment, categorizing-management, attribution-analysis, and the adjustment of trust degree. Conflict disposal and information communication are advanced also. The success ofGalanz Group and the failure of Lanzhou Huanghe Group are compared in the following case study.Finally, the paper presents five pieces of advice on how to improve the condition of manager-trust in family business, such as mending its pace to build institutions, fostering the organizational culture of sincerity, changing the owner's concept, setting the consciousness of the Human Capital, assessing the owner's trustworthiness dynamicly, and strengthenning the cooperation in many ways.