Research On China's Family Business & Its Family Administration

Since the reforming-opening policy of China which began in 1978, the family-owned business of mainland China has experienced a process of emerging , growth and expansion. The fast booming tendency seems to continue in the foreseeable future. But with the development, scale effectiveness and specialize management are needed. So whether family-owned business should also be administrated by the family becomes an argument. How to deal with it?The paper following the steps listed below:First, what is family-owned business; Why it could exist in China. Second, the advantage and disadvantage of a family-owned business administrated by the family. Then draw the conclusion that it is beneficial for the family to run the business when it is created, but when it has grew up, the way should be reversed because family administration will cause many problems on human resource, capital structure, culture, administrator's capability and things like that. The last, the methods subjecting to the problems are offered, such as MBO, ESOPs, listing in the stock exchange, capital structure diversified, specialization and the relative strategy for the family members phasing out of the business.