Intergenerational Succession, Transformation And Firm Performance

In the past30years of Chinese Reform and Opening-up,family firms as the mainforce in theprivate firms,promote the sustained and stable developmentof Chinese economy. The academic circles and practice circles are very interested infirm culture, organizational structure,corporate governance and intergenerationalsuccession of family firms. At present, most of the family firms are experiencingor willbe faced with an important stage of intergenerationalsuccession. The intergenerationalsuccession of Chinese family firms is still in "Father toSon" mode. The2nd generationslike to open up new business or enter a new industry, and do more strategictransformation. Therefore, the study of intergenerational succession, strategictransformation and firm performance is of great theoretical and practicalsignificance.The main content of this paper includes the following parts.The first chapter isintroduction, including the research background, significance,ideas, content and frameof the thesis,and the innovation point of this paper. The second chapter is the definitionand the literature review, clarifies the conceptsand literatures of family firms,intergenerational succession and strategic transformation. This chapter gives theintergenerational succession model includingInvolvement, Co-management andTakeover. This chapter also establishes the strategic transformation theory offamily firm, and givesan analysis of the mechanism ofintergenerational inheritanceand transformation strategy. The third chapter is the theoretical analysis and hypothesisproposed, summarizes the recent research results between theintergenerationalsuccession, strategic transformation and firm performance, then puts forward theresearch hypothesis through theoretical analysis. The fourth chapter is the empiricalresearch design,including sample selection and data sources, variable definition andmodel construction. The fifth chapter is the analysis of empirical testsand results, includingdescriptive statistics, correlation analysis, multiple regressionanalysis and stability test. This paper tests the empirical study on two aspects: one is thecorrelation between intergenerational succession and firm performance; two isthe strategic transformation effect on the correlation of intergenerational successionandfirm performance. The sixth chapter is the conclusion and suggestions,includingconclusions, policy recommendations, limitations and prospects of research. This paper does an empirical study in A-share main market listedfamily firmof2010-2012yearsand draws the following conclusion. The family firmswith the2nd generation involvement and co-management have a better performance.Strategic transformation driven by the2nd generationwill also have a significant impacton firm performance.The strategic transformation has a reverse effect on therelationship between the co-management and firmperformance. Therefore, the strategictransformationwill reduce the original real performance in the co-managementphase.Theoretical analysis that2nd generation takeover has a poor performance, but theempirical results failed to prove this point. Because offewer samples, although there isno proof of relationshipbetween takeover and firm performance, but this paper providesa research paradigm, can be sustained attention and research.The main contribution of this paper concludes: firstly, this paper suggests theintergenerational succession model including Involvement, Co-management, andTakeover. Secondly, the paper attempts to improve a family firm strategictransformation theory, including cross-industry transformation and diversification. Atthe same time, considering themechanism of intergenerational succession andthestrategic transformation, this paper study thestrategic transformation driven by2ndgeneration. Thirdly, there is a discovery of a new path of influence on intergenerationalsuccession andfirm performance by strategic transformation.The research results of this paper have guiding significancefor Chinese familyfirm. Intergenerational succession theory and strategic transformation theoryprovidetheoretical basis and practical experience for the transition of family firms. Theempirical results provide data reference and lessons for theintergenerational successionand strategic transformation. The results help2nd generation to make decision on thetype, degree, and timing of strategic transformation forthe continuousgrowth performance.