Research On Protection Mechanism Of Founder Control Within Private High-tech Enterprises

Allocation of corporate controlling rights is the core of corporate governance mechanism.Many scholars are committed to the study of the allocation mechanism of corporate control,however,from the practical point of view,the problem of the reasonable control allocation between the main actors has not been effectively resolved.In many high-tech companies,control allocation problem becomes more complex.It is worthy of our study that how the founder,an important owner of human capital,maintains the controlling rights while private high-tech enterprises introduce external capital,which is the core issue of this paper to discuss.We summarized of the existing research results and the characteristics of Chinese private high-tech enterprises' control allocation,and then put forward control maintain mechanism for founders of the private high-tech enterprise through the exploratory case study,which describes how to use their own resources to maintain the company's control in the current system and external environment.The external environment condition has an important influence on resources allocation and actors' behavior within organizations.It is an effective tool for the subjects to make use of the articles of association to game with each other.Key resource allocation determines the allocation structure of control rights.In order to prevent the control sidelined,founders maintain their dominant positions with property resources,relationship resources and knowledge resources.In this study,we used empirical research method and selected the private high-tech companies in China during the period of 2007-2012 as the research sample to test the above maintenance mechanism of founder's control rights.The empirical study shows that:(1)In private high-tech enterprises,the higher proportion of shares the founder holds,the easier for them to protect their control rights;(2)The more founding members account for the proportion of board seats(relationship resource),the more likely founder remains key positions;(3)Higher education(knowledge resources)would help founder maintain corporate control;(4)The cumulative voting system and vast majority of clauses in articles of association play positive moderating effect in the relationship between founder's resources and control.This paper proposed a protection mechanism of founder control within private high-tech enterprises,which has enriched the research of the control theory,corporate governance theory and allocation mode of control rights.From the perspective of resource view,we put the three major capitals(i.e.physical capital,social capital and human capital),which have an important influence on enterprise production,together into the research of corporate control allocation.On this basis,we divided founder's critical resources into property resources,relationship resources and knowledge resources,and then discussed the founder maintain control path deeply.This study makes up for the shortcomings of traditional contract theory.At the same time,it has provided a reference of control allocation for private high-tech enterprises' founders in china.