The Transformation Of Management Control System Of Family Enterprises Under The Background Of Intergenerational Inheritance

Management control system is the organizational foundation for enterprises to create value and prevent risks,as well as an important guarantee for the inheritance of family business.Its structure and operation is influenced by internal and external environment.While,with the evolution of the development cycle,family enterprises in China have entered the peak period of inheritance.Intergenerational succession changes the operating environment and strategic objectives,which promotes the transformation of management control system.Based on the existing theories,this paper constructs the five-element analysis framework of management control system,which is the basis for the following analysis.In addition,taking New Hope Liuhe as the research object,the intergenerational inheritance process is divided into four stages,including preparation for succession,successor entering the board of directors,establishment of the joint chairman and successor charging alone.Then we study the changes of management control system after the inheritance,including changes in management control environment,such as the strategy,the governance structure,the human resources status,the decision-making mode,as well as changes in comprehensive budget management system,changes in performance evaluation system,changes in incentive and constraint measures and changes in communication and management platform.Besides,the influence of intergenerational inheritance in the process of transformation is refined.Finally,aiming at the deficiencies of management control system,some suggestions for improvement are put forward.Based on the above analysis,the conclusions are drawn as follows.Firstly,intergenerational inheritance improves the management control environment of New Hope Liuhe by transformation and upgrading,equity balance,defamilization,optimization of human resources and democratic decision-making;improves the budget control system by refining comprehensive budget management system;improves the performance evaluation control system by clearing the subject,content and basis of assessment;improves the incentive and restraint control system by increasing motivation and supervision and improves the information and communication control system by innovative communication and management means.Secondly,there are still deficiencies of management control system after the transformation,including high proportion of real family holding,low balance of non-family shareholders,low degree of managers' externality and lack of innovation of incentive means and so on.Thirdly,measures can be taken to make up for the shortages,including reducing the shareholding ratio of the first and second major shareholders,reducing the number of family shareholders,enriching the types of non-family shareholders,introducing external managers as well as implementing equity and option incentives and so on.There are some innovations of this paper.For one thing,this paper combines intergenerational inheritance with management control system and studies the role of intergenerational inheritance in the transformation,enriching the related research.For another,on the basis of previous research,the five-element framework containing control environment,budget,performance evaluation,incentive and restraint as well as information and communication is proposed,which can provide basis for the analysis of management control system of family enterprises.