Research On Corporation Management Case Of Family Firm

As a form of firm, the private company running by the family is occupied 2/3 to 3/4 in the domestic and international economic areas. The majority of our family firms have been greatly developed in recent years, but there were also many companies short-lived and unable to stay relevant.In this paper, I will analyze A Company which is a regional family firm in YingKou to discuss how the family firm to build a reasonable, appropriate internal governance mechanisms for maintaining the company's long-term and healthy development.A Company is a large pipe manufacture family firm, established in September 1994. Its current monthly output is 500 million and has more than 80 stable clients. Although the enterprises develop rapidly, some challenges still need to be faced. Through analyzing of A Company, we have sorted out mechanisms problem of family firm, such as:patriarchal authoritarian and the tendency of centralization; poor control of the inheritance; frequently "quit" of high-level personnel; slow development of reform of share holding system, etc.,The thesis will use the agent theory, stakeholder theory, the incentive mechanism theory to deeply analyze the problems and find the solution accordingly. The causes are including a strong belief in family ethics; high transaction costs between family members and non-family members; the incentive mechanism for non-family executives is not sound.According to the A Company's current management situation, the paper presents a series of solutions, such as put to use scientific norms and internal governance. Meanwhile, family firm must consider the actual situation and improve the governance of family relationships, then form an effective principal-agent relationship and scientific motivation restraint mechanism. In the process of family firm move to the modern enterprises, family firm should follow the general law of development of enterprises and then find a combination to integrate the establishment and improvement of the modern enterprise system and family firm's governance reform so that achieve the ultimate purposes of form the modern enterprise system. Meanwhile, family firm should setup the enterprises culture, vision and positioning to enhance the loyalty of the staff and boost the further development of the company.