A Study On The Machanism How Tranditional Culture Affects The Control Rights Allocation Of Family Business

The family business is not only a social and economic phenomenon, but also a cultural one. The culture can affect the allocation of control rights in all aspects of business, and have a fundamental influence on the reallocation of control rights as the business develops and upgrades. In this article, the factors which affect the allocation of control rights have been divided into three kinds:the ownership, decision-making and trust and were elaborated from culture to demonstrate how the traditional culture influences the allocation of control rights.First, we discuss the mechanism of the culture on the control rights of family business from the points of the ownership structure, external acquisition and transfer of the ownership. The ideology of "Family Thriving"’, the characteristic of the relationship cultural and the emphasis on family interests have led the ownership of the family business prefer to control the business by themselves; the emphasis on family interests and the relationship culture impede the feasibility of the external acquisitions:The kinship especially the parent-son relationship make the the external delivery of ownership unfeasible, preferring moral to law increases the risks of the external delivery, all of these characteristics restrain the allocation of control rights.Secondly, we analyze the role of traditional culture in the enterprise system, management structures and decision-making mechanism, in order to explain how the traditional culture affects the allocation of control rights. The characteristics of preferring moral to law and the emphasis on family interests have an fundamental effect on the business system selection, the characteristic of ethics and leading desire have an fundamental effect on the business system reselection, The ranking characteristics intrust culture,emphasis on family interest and leading desire impede the recruitment of pro fessional managers, ranking concept, official standard thinking, "the rule of man" concept and moderation can all promote or maintain their preferences on control rights.Finally, we analyze the mechanism of traditional culture on the allocation of control rights in family business from the perspective of trust. The nature of Chinese traditional culture and family culture. and the resulting differentiated trust lead our family business trust to be generally limited within the family, so the allocation of control rights is of family internalization. Cultural rules lead to widen family trust, and then widen family internalization of the allocation of control rights to a certain extent. Soft constraints of the culture led to a lack of social trust, and increase risks of the externalization of the control rights in family business, all of these promote the allocation of control rights of family business to be more internal.