Research On Successive Problem Of Family Firms

Family firm is a sort of corporate form prevailing in the realities of economy and society,from the very beginning of its research,the controversy continued, divarication between the good or bad of the family firm. This article, based on the perspective that the family firm is not a backward corporate form. That the family firm is the crucial stage in the process of the firms'growth.which is about to evolve into the Modern enterprise system.but need to be provided the soil and space to evolve,it's nothing important more than a good market enviroment and a perfect legal system.This article based on the assumption of such a scenario, the more successful family firm facing the older generation of entrepreneurs was going to step down,the period of the ownership and management transfer. This is unique to family firm, also the key to success moment. The transfer of ownership is no problem because they can only pass on the future generations or family confidant. yet the transfer of the power of management will be very complicated, Because of his own offspring or family confidant are not certainly suitable for the enterprise's management. They are bound to the future of the development of enterprises have an adverse impact, but transfer the power to professional managers, face a principal-agent problem. This paper is about the external market environment and legal system how to affect the decision of the founder. separated the external market environment and legal system into strong, poor and the moderate of the three conditions and discussed how the external environment affect the founder's decision. then the issue will increase the case founder and professional managers can collude and expropriate the resources of the firm. At last, discussing the size of the enterprise how to influence the development of family enterprises.In the final, in a good market environment, the family firm will employ professional managers, as well as a large number of stock issuance, dispersed ownership, turn to the modern enterprise system. And in the moderate market environment, the founder stay as a major shareholder, supervising the managers to reduce the manager expropriate the enterprise resource. And in the poor market environment , the founders have full ownership , it is still unable to prevent manager from expropriating the private benefits. Finally compare the case of no separation with the separation, decide if employ professional managers or not. Thus we get, external market environment (external corporate governance) will have a direct impact on organizational forms and evolution track, no the members's reasonless choice in the family.although the culture of the family and kin will have an impact, But compared with the external environment,it's less important. We also found family firm is a necessary process in the business enterprise development.Therefore, we should not simply deny the rationality of the existence of family firms.Make enterprises more competitive, won't be eliminated in the highly competitive international market. Family firm will turn to the modern enterprise system consequentially, become bigger and stronger. For Accelerating the shift . to create a good market environment is necessary. Lastly, the government should play well in institution supply and the provision of public goods.