The Research On Governance Model Transformation Of China's Family-run Enterprises

As we all know, the family-run enterprise has become one of the most prevalent organization forms in modern economy. After more than two decades' vigorous development, China's family-run enterprises have become one of the most important driving forces for China's economic growth and structural adjustment. However, many family-run enterprises, getting into a certain developing stage, due to the drawbacks of their own management model, generally encounter a lot of bottleneck problems, which affect their persistent and healthy development.Family governance model is of great efficiency in some certain aspects, especially during the initial phase of the enterprises' development. To some extent, this ensures the competitiveness of the family-run enterprises. However, with the further development, the drawbacks of the family governance model gradually expose themselves, which requires that we should improve and optimize the model. The background of social transformation and the incomplete law system of trust make it difficult for the most private companies in China changing from the family governance model to the modern corporate governance model.Firstly, by analyzing the basic characteristics of China's family-run enterprises, this thesis clarifies that the adoption of family-style management structure by China's current family-run enterprises in the initial phase of market economy has its historical inevitability, and further points out the problems existing in its commission and agency system.Secondly, this thesis analyses the current situation of the management structure in China's family-run enterprises. Learning from the advanced design of the management structure in the family-run enterprises of the United States, this thesis proposes several methods to improve the management structure of China's family-run enterprises, such as diversifying the main property rights, undertaking the commission and agency system and implementing the form of corporate governance.On the selection of the governance mechanism, this thesis suggests the perfection of both the internal and external governance mechanisms of the family-run enterprises. For the internal governance mechanism, the enterprises should strengthen mutual balance and mutual supervision within the company, and attach great importance to the selection and incentive mechanism of the managers. For the external mechanism, the action of the top management should be supervised and restricted by the competition from the manager market, the product market and the capital market. Specifically, the governance of the creditors, banks, for instance, should be strengthened; an important role should be played by the intermediate organization in the management; meanwhile, the construction of the manager market should be urged in order to promote the management of the manager market to the family-run enterprises.Finally, taking the actual development process of ShanQuan, a beverage company, as an example, this thesis makes a case study on the governance model transformation of China's family-run enterprises.