Family Business System With The Modern Corporate System Comparison

Family businesses have played a key role in the development of civilian-operated economy. However, family business is regarded as a traditional and slow enterprise system. But it is artificial. The viewpoint that the family business must be replaced by the modern corporate system is also not really. In this paper, through efficiency analysis, We think the two systems have their own advantages and disadvantages. The border between the two systems is decided by many factors, so it is dynamic.It is inevitability for some enterprise locking-in family organization structure. In specific enterprise scale, family business maybe is the best choice. When the enterprise is founded, when the enterprise is in non-perfect market economy, and when the enterprise is in specific culture circumstance, family business maybe is the necessary choice. In China, family business's existence has it's own necessity.Of course, with the rapid growing, the disadvantages of family business appear. That is to say, in compare with modern corporate system, family business system has it's own disadvantage. When enterprise grows to certain scale, it is necessary for family business replaced by modern corporate system.In the last part, we put forward the law of family business to modern corporate system And we analyze the system transition process, discuss the barrier, and put forward the countermeasures.