Research On The Internal Control Mode Of Family Firms

In the impression of modern people, family firms represent behindhand firms. Using the family mode of management is also a behindhand management method. But, no matter family firms are in the developed countries or developing countries, most of the family firms are striking for survival and growth. Recently, many scholars have carried out researches on the family firms. In reading these researches, they encouraged me to think deeply about my previous working family firm which experienced the rising and declining phases in its lifecycle.This paper will base on the lifecycle theory of family firms. It adopts comparing and step by step research method to study the mode of internal control for the China family firms. Firstly, the spontaneous internal control of the growing family firms for its existing reasonability are analyzed. It points out that this mode will prevent the family firms from further development. Then, the paper aims at the method of improvements for these obstacles. The next mode of internal control suitable for the family firms are concluded from these fundamental analysis. This mode will be better for the family firms during the matured phase to improve its performance and maintain its continuous growth. Then, this paper summaries the background of the case study of the XX family firm. By analyzing the reasons of the closed down of this XX family firm, it is concluded that its rigid mode of internal control in different phases of development is the key reason. Moreover, this paper also recommends some suggestions on the rule control to the China family firms. Finally, the paper expatiates the limitations of this study.