Scholar's View

  • Over the past four decades, family businesses in China---which had disappeared entirely---have reemerged and thrived with the enormous business opportunities presented by China’s reform and opening-up. Though few great family businesses have appeared, the notion of the family business has become part of the popular consciousness. Now that the founders of many such businesses are approaching retirement age, what problems and challenges will their companies face in the process of intergenerational succession? 

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  • In China, many entrepreneurs take father-to-son business succession for granted, but this is not the only option. Whether the family can continue to own the business often depends on the ability of the enterprise to overcome the obstacles that lay ahead; whether the family should continue to run the business will depend on the ability of the enterprise to maintain and enhance the value of family intangible legacies.

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  • Selling the family home is an emotionally charged process at every stage. Besides concerns about the new owners and any changes they might make to the property, family members may disagree on how to handle the many financial aspects of a sale and these disagreements can have a negative financial impact. Research shows that homes sold by estates tend to sell at a discount to comparable homes on the market, largely because the sellers are making decisions with their hearts instead of their heads.

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  • Many leading companies in East Asia, including Korea, Japan, Taiwan, and China, are family businesses that play a critical role in the rapid development of these economies. With the absence of fair and effective rule of law, it is risky to form new businesses with outsiders beyond the family circle.Instead, family businesses take shape with the father as CEO, mother as chief accountant, and children (who often do not even have formal contracts) in charge of key functional areas. This helps them avoid the risk of dealing with outsiders and reduce transaction costs, which contributed to creating the East Asian miracle.

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  • When we think about business succession, we often see it a bit like succession in a royal family where control of the kingdom passes from king to prince. But while father-to-son business succession may be most common, there are an increasing number of daughters who take the reins to lead the family business. This is especially true in China, where the daughter is the only child in many families because of the country’s One Child Policy.

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  • When Samsung Electronics chairman Lee Kun-hee suffered a heart attack in May, investors began to consider the impact that a sudden, accelerated leadership succession might have on the company. Lee is expected to eventually hand the reins to his son, Lee Jae-yong, 45, who has worked at the company in various capacities for 23 years. Does the younger Lee have what it takes to steer Samsung forward in today’s competitive business environment?

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  • Selling the family home is an emotionally charged process at every stage. Besides concerns about the new owners and any changes they might make to the property, family members may disagree on how to handle the many financial aspects of a sale and these disagreements can have a negative financial impact. Research shows that homes sold by estates tend to sell at a discount to comparable homes on the market, largely because the sellers are making decisions with their hearts instead of their heads.

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  • “Pindie” (meaning to compete through daddy’s power) has become a social tag of the second-generation rich. It destroys social equity and encroaches on the development opportunities of grassroots. To alter this negative public image, some second-generation rich have publicly manifested their determination to become the second generation entrepreneurs without falling back on their family background. According to a joint research conducted by the University of South Australia and the Rensselaer Polytechnic Institute, “Pindie” can be changed into a positive energy.

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  • A dearth of worthy successors has long been a cause of concern for family businesses. This is especially true with family firms on the Chinese Mainland because the one-child policy even rules out the possibility of “picking the best out of a mediocre bunch”. As a result, an entrepreneur’s only son (daughter) is the only possible successor to the family business.

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