Studies On Succession In Family Firm

In contrast with non-family business, the succession of leader has always been seen as an important issue in the development of family firms. With the Ownership- Family- and Business Three Dimensional Framework we try to analyze succession problem of Chinese family firms in the new century. Influenced by such factors like social circumstance, firm growth stage, scale and industrial characteristics, the family firms deal with the succession problem in different ways, we can observe that the most family firm owners prefer to hand over its business to their offspring. After try to explain this phenomenon from the view of Chinese social structure and organizational learning, this article emphasizes the importance of good solutions of such problems:1. Power transformation. We suppose the family firm should be institutionalized in the management. Meanwhile, the incumbent should train the successor, and foster successor's prestige willfully.2. Firm culture. How to face cultural change in the progress of succession? Harmonious cooperation and respectful and clear communication between incumbent and successor are key of successful successions.3. Family separation ("fenjia"). "fenjia" is not a major trigger event that the family firm will go out existence after three generations in China. In contrast, "fenjia" sometimes is helpful which will cut down the cost of management when family firm enter the second generation.