Family business management methods
2200 BC, then located Shun Yu, the power passed to his son cane start, replacing the long lineage of abdication, the establishment of China’s first dynasty – Xia. Since then, China has entered the era of the continuation of home world 4,000 years old hereditary monarchy.
Today, the governance structure of the home world of private business in the prevalence of family management is the preferred management style of many private enterprises. Look at those family management, and some sure-footed, and some never led, some hovering in place ……
– US “Fortune” magazine published 50 of the 2008 World’s Most Admired Companies list, the retail giant Wal-Mart family business once again win ……
– According to Thompson Financial Consulting European family businesses a comprehensive survey analysis: in France, Germany, Italy, Spain, Switzerland and England, the stock market, a large family business ranked high ranking ……
– In China, reports on private family business with a heated debate also frequently seen in the rise and steady development of the major media, new hope, Kingdee side too and a number of family businesses, let people see the hope of national enterprises to the world, And there are many family businesses from glory to decline ……
Whether domestic or foreign, successful family businesses have, it also failed. Behind the success of the family business, there are many private enterprises fell down. In the end Who is to blame? Is a family management’s fault? Or wrong management style? This gives China’s private enterprises made a serious topic: As a family business since Wal-Mart, Ford can eternity, why the success of China’s private family business is rare? Whether China’s private enterprises that adhere to the family of the road?
The rise of the family business is in dramatic changes in China’s economic system, the rules of the game and constantly changing background. Family-owned company with its unique advantages in the fierce competition in the progressive development and growth, is also considered to be the most common sense of the type of business. According to some relevant statistics show that in the non-public economy in China, the family-run business at least account for more than 90%. In these companies, both family-owned businesses or sole proprietorship enterprises, but also a partnership that total enterprises, and even appeared in control of the family members to keep critical enterprise groups. So, is there would be a very good development is not China’s family business, family business is not, there is no merit? Is not these companies can only remain forever under a certain size? Is not a business enterprise to have to abandon the family? Let’s look at some of the family business’s success worthy of note: Once upon a time, the family business in the common economic interests of the appeal, relying on strong cohesion arising from kinship, so that enterprises in a very short period of time to grow rapidly.
Smaller family business, it tends to be more unified centripetal force, managers and owners than other modes, so that the family business members more motivated. Due to the flexibility of the family business, they can mobilize manpower and resources beyond the conventional, without having to comply with the rules of big business is likely to remain. For example, the dawn of the printing plant is the largest printing plant in Wenzhou, director Zhu poetic force big business to do the first time, other plants need six months, he took only 13 days, and finally, 13 day and night not slept in his bed, He fell asleep in the order the customer premises. Ruian Tamura Korea specializes in the production of auto parts, 859 enterprises of all is a family business, industrial output value of 800 million, according to the village population, per capita output value of 800,000. They develop new varieties as long as 37 days, and some large state-owned factory but need more than 1 year. Other logos factory 3-5 months to develop a variety, Jinxiang logo plant as long as 12 days.
Family business out of the trust family members, decision-making is very fast, very strong ability to take risks. They do business entirely favorable, do not look at the national plans and programs, so-called “foot peel slip where what count.” Screw king Liu Taiyuan was originally sold kerosene lamp, he found that the rivets from higher profits among kerosene, start a rivet on the special business. Wenzhou Jinxiang do is start school meal ticket printing, and later discovered badge higher profits, a “badge of the township.” Family Business in simple exchange rate, in exchange for the opportunity to trial and error, “They have 10 million, will not be only 50,000, leaving 50,000 emergency preparedness, he not only 10 but also investment into Wanquan borrow on the market in order to trying to gain a competitive advantage. “an economic study to wage earners identity cadres said that many people willing to return to prostitution after failing Dan Mianhua.
From some of the information shows that contemporary Chinese social and economic environment, there are many characteristics suitable for family businesses to survive, so, after all these years of rapid development, 70% -80% of the private enterprises are still using a family management. Sartre’s existentialism said: all existence is reasonable. Apply this theory, China’s private enterprises family management still has some advantages. The key is: with the market economic system gradually developed and increasingly globalized economy, pure family business only in some sectors, within certain limits of survival and growth has limited space, can not be real competition in the market protagonist. Why development scale family business is not always big up? Should we not be achieved from good to great process?
Below to analyze the management of the family business ills:
First, it is difficult to go beyond the emotional management.
With the growth of the family business, which form inside the various kinds of interest groups, due to the inclusion of complex emotional relationship, so that leaders in dealing with stakeholders will be in a more complex, even a dilemma. When business leaders in violation of relatives and family system, managers as difficult as handling ordinary employees alike, leaving it to the internal management problems.
Second, not solve the problem of the distribution of benefits.
Family businesses there is a very common feature is that you can total pain but not with the willing, the early days, all the contradictions are masked by entrepreneurial passion, but after three venture off – gold and silver, on the honor, row seating often to the healthy growth of the organization created obstacles. When treating honor, money and rights views diverge, between brothers, are likely to arise between father and son against each other phenomenon. For example, I wish companies in Zhejiang, one of top ten inventions of entrepreneurs in the heyday of the time, the backyard on fire, former vice president of Qijiu to divestitures grounds taken to court, the strong wish onto the dock.
Third, with regard to the use of human resources.
The competitiveness of enterprises is the talent competition, this view has begun to be more and more business people to accept. However, many family businesses seem foreign resources and energy to produce a repulsion. Especially since the family-owned business, in general, difficult to enjoy the equity of foreign workers, whose mind is always just workers, always difficult to integrate into the organization. In addition, since it is difficult to absorb external talent, companies higher level of development will be limited. As the New Hope Group President Liu Yongxing, he said:. “The biggest drawback is that the social elite family businesses do not come into a few brothers are at the highest position of enterprises outside talented people to enter, and somewhat similar to a person’s way of thinking without a breakthrough. We each have their own ideas, to something very difficult decisions, easy to delay the opportunity. ”
In many family businesses, the role of family members blurred. On the one hand, family members of employees of the enterprise, is the chairman and general manager of subordinates, need to obey the command of their superiors; on the other hand, family members and the chairman and general manager of relatives, brothers, sisters, and even the elders, Such family members inevitably caught in a conflict of roles among the good working relationship can not handle. In the eyes of other employees, family members are privileged, their contribution can not be recognized, thus dispel their enthusiasm for work, that the management and development of enterprises are playing a negative role.
In addition, business development and growth, it is impossible with just one aspect of the efforts of family, but management personnel, technical personnel and workers of the community together to crystallization. Many family business owners can not recognize this, thought he was unique in the world, and therefore can not properly treat their staff appear to labor in the form of enterprise property rights, not only the general staff as wage earners, and the senior manager of the general workers’ way arrange their compensation structure. If senior managers in their own interests are not met, would otherwise meet the requirements, or corruption, or sell business interests, or bring your own recruiting business and a group of men “quit” to the enterprise to create a crisis. Security barrier easiest defeated from within. Family management, for fear that “Xiong Dixi in the wall”, for fear that the interests to bias blood, once the internal opposition of interest groups emerged, the backbone turned on, and then suddenly a solid edifice will crumble.
With the progress of the times, economic development, and further development of the family business has been the reality in front of us. Gradually exposed the shortcomings of the family business, the further development of family-owned enterprises are facing severe challenges. These problems exposed that China’s family businesses face enormous challenges and ideas grow upgrades, problem management change placed in front of family business management decision-makers. Even China, one of the largest family businesses – New Hope Group, is also doing the change attempt.
Development of new hope is obvious, new hope has been that institutional change is people’s concerns. New Hope think: whether it is business or market, for new hope, it becomes just external things, in fact, most needs to be changed or internal institutional group. In recent years, the chairman Liu Yonghao are mentioned in the various meetings, interview family-style management is the biggest drawbacks of family private enterprises, although at this early stage of gas a group management system, trust each other, through thick and thin gave the development of enterprises bring many benefits. But when the company made some progress, made some achievements, the problem has cropped up. Including the allocation and equity investment direction, vested interests, who is the basic core problem plaguing force began developing the private sector. Since there is a more advanced and modern enterprise system, along the trend and go, new hope does not seem to say no.
1992 and 1995 of internal restructuring, new hope in independence from Hope Group. Or secretly delighted the crowd or feel sorry, the Liu brothers “divided house”, when it has been predicted that ” hope ‘will certainly be declining after the separation, “but a few years to prove, adjust or pieces good, in a “Hope” banner, fragmentation is responsible for the exhibition director, out of a path of family management for enterprise development.
In February 1998, part of the New Hope Group’s corporate shareholding system reform, in March, the new hope the stock market. This step is very important for the new hope, the marks of a traditional private enterprise will thus entered the track of normal operation. Liu Yonghao considers it necessary that both rapid development of enterprise, private enterprise is purely family management towards a new starting point for the modern enterprise system. He believes that the new hope of the market, the introduction of capital is small, the more important is the introduction of an advanced form of business organization, advanced management methods. Now, Liu Yonghao has a strategic investor to convert itself from the role of a manager, a subsidiary of General Manager, Finance Manager, Technical Department three lines became his whole company indirectly restrict “weapon.”
For new hope for, out of family business management model is deliberate. They have realized that the family system has to curb private enterprises to take off their wings, new hope after the restructuring of the system means giving up backward, toward a new direction.
“China’s private enterprises are not big, because it is a family business.” Someone commented. In fact, some say this is one-sided. Successful family business does not mean that family management, the success of his wife medicine is precisely to prove this point.
Mrs. medicine has now become a public company. The company at the time of the listing, made a special risk warning in the prospectus: “The company’s ultimate owners and their immediate families of Zhu Baoguo, before the release of the company from the control of the family company analysis system, which will give the company operating and minorities bring certain risks interests of shareholders. “Mrs. medicine, the Zhu Baoguo family holding reached 74.18%. Such a large proportion, no wonder you want to make such a declaration. However, the company also introduced this explanation: the company has set up two independent directors, divorced from the interests of major shareholders outside the company’s major investment decisions must be made before the implementation of the future by independent directors, they can protect medium and small investors interest.
Listing it means for a family business enterprises with the capital market, running on a more standardized platform and management, natural style should abandon the original racking our brains to make decisions. Zhu Baoguo has admitted that he was not comfortable with what should be a meeting, obtained by the board of directors before making a decision. However, it should be recognized that in the management of the company does a lot of effort, unlike the general family business. In addition to the two independent directors, other senior management staff of the company as general manager of Mr. , deputy general manager of Mr. Feng Kaidong, Mr. Qiu Qingfeng Miss Gu Yueyue, Mr. Zhang Xisheng and Secretary of the Board from the prospectus and Chus have not see any kinship.
Although Mrs. medicine is a family business, however, can go beyond the family management, can merit, this is what they different from other family business success. Everything has its different aspects. Family business naturally has its pros and cons, can be the same as his wife medicine beyond the family management, family business never can not achieve the scale of transcendence.
The family business as the main private economy, relatively stable through this family to ensure the integrity of the organization, and gradually expanded from a small family workshop to the scale of production, the Group’s management of large enterprises, has experienced more than 20 years of time-tested, according to the business experience and socio-economic theory, the new century will be a period of adjustment of forming a family business survival and growth. According to a family of American Enterprise Institute shows that about 70 percent of family businesses fail to spread to the next generation, 88% failed to spread to the third generation, only 3% of the family business in the 4th generation and later still in business . McKinsey & Company study concluded that: Only 15% of family businesses can be sustained for more than three generations. From family business to grow and create, expand, from small to big, from weak to strong, the impact of the family business the second venture, the main drag restrict large-scale development of the family business to focus on: access to capital narrow, highly centralized Enterprise Property , messy human resource management, business strategy and ambiguous development model four ice above. Therefore, enterprises need to get rid of the family obstacles for further development, to dispel the ice restrict the business forward, to make their own healthy development track.