Family Business Strategic Choice And Control Over The Changes

Family business is an economic organization in which all or parts of its ownership and control rights are held by one family. For family business, especially small and medium family business, the way it grows depends on its strategic alternative. Because there is too much uncertainty to family business, so strategy is more made according to its own resources and competency to support its development. There is an interrelationship between structure and strategy of family firms. When different strategies are introduced, structures need to be adapted to them. When different structures are designed, strategies have to be adjusted to them. During this process, family business represents high flexibility in organizational structure. The decisive factor by which organizational structure influences strategy is the control allocation of family business. While organizational structure is adjusted by control rights through internal governance. This article combine the two logistic relations from strategic motive to structure adjustment and from structure adjustment to the change of control, then show how strategy influence control rights. In this article, development difficulties and outside environment are analyzed to give the reason of strategic alternative. In order to make sure that the strategy can be implemented effectively, its governance should be changed besides its structure. For businesses in different stages, the key factor of realize strategy is reallocate its control. So, this article reviews three main strategies and its relative change of control rights.