Research On The Causes And Economic Consequences Of Internal Strife In Family Firms

In Chinese capital market,family enterprises account for a large proportion,and the private economy with family enterprises as the main body contributes a lot to China's economic development.It is undeniable that there are many advantages that other types of enterprises do not have at the beginning of the establishment of family business,but with the expansion of the enterprise scale,its inherent shortcomings are also exposed.Especially when the enterprise has a certain scale,the problems of family business governance model are increasingly prominent,and family infighting is common.As a husband and wife entrepreneurial family business,Bawang group's infighting occurred after the family holding listed company became bigger and stronger,and suffered heavy losses.It is typical and representative in studying the issue of infighting among the founders of family business governance.Therefore,this paper,taking the overlord group as an example,analyzes the causes of family infighting from the perspective of corporate governance,including the fight for control,the failure of the board of directors,the weakening of family relationship governance and the lack of the exit mechanism of founding shareholders.Then,it analyzes the family infighting of overlord group from three aspects: financial performance,market competitiveness and capital market effect Economic consequences.From the perspective of financial performance,the enterprise's performance has deteriorated,and its profitability,growth and operation ability have been damaged;the shrinking market size,market share and terminal sales channels show that its market competitiveness is declining;in addition,this paper analyzes the market reaction during the internal strife of overlord group by using the event study method,and finds that during the internal strife of the family,the stock price of overlord group is several After volatility,the market reacted violently.Finally,according to the case,this paper draws a conclusion,and puts forward some suggestions on the development of family business from the perspective of corporate governance.This paper believes that the occurrence of family infighting will affect the corporate governance structure and cause management confusion,thereby reducing the decision-making efficiency of the enterprise,damaging the value of the enterprise and seriously hindering the development of the enterprise.Through this case,I hope to bring a warning to private family enterprises in China,and to take reasonable and effective corporate governancemeasures to reduce the impact of family infighting on the enterprise itself and the capital market,and promote the harmonious development of family enterprises.