Succession Models and Third-Party Facilitation in Family Firms: A Case Study of Guangdong, China
Journal: Modern Economics & Management Forum DOI: 10.32629/memf.v5i3.2271
Abstract
Family firms hold a significant position in China's private sector, especially in Guangdong, where Lingnan culture profoundly influences their operations. This study investigates succession practices in four publicly listed family firms in Guangdong — Vanward, Zhongyeda, Nan, and Country Garden — by analyzing their financial indicators and conducting a textual emotion analysis. The results indicate that third-party facilitation during succession is a common and effective practice, ensuring smoother transitions. Four distinct succession models were identified: tutorial-based, team-oriented, sibling-collaborative, and spousal-inclusive. The study underscores the importance of implementing exit mechanisms to mitigate the risks associated with third-party involvement. These insights contribute to the broader discourse on family business management in China, offering theoretical and practical implications for effective leadership succession in a rapidly evolving business landscape.
Keywords
family firms, primogeniture succession, third-party facilitation, succession models
Funding
Guangdong Province Philosophy and Social Science Planning Project, Grant Number (GD23XGL062)
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[3] Grote, J. (2003). Conflicting generations: A new theory of family business rivalry. Family business review, 16(2), 113-124.
[4] Handler, W. C. (1994). Succession in family business: A review of the research. Family business review, 7(2), 133-157.
[5] Hauck, J., & Prügl, R. (2015). Innovation activities during intra-family leadership succession in family firms: An empirical study from a socioemotional wealth perspective. Journal of Family Business Strategy, 6(2), 104-118.
[6] He Xiaogang & Lian Yanling. (2009). Family Authority and Family-Owned Firm Value: an empirical Study in China. Economic Forum,44(04):90-102.
[7] Li Xinchun, Tan Hongbin, Zheng Danhui, & Zhang Jinhua. (2013). Study on the Entrepreneurship of Cantonese Merchants: The Power of Family Ties. Beijing: Social Sciences Academic Press, 42-49.
[8] Luo Hui. (2016). On the Tutors in Family Firm’s Succession. Beijing L People’s Daily Press, 19-23+123-130+188-197.
[9] Osnes, G. (2011). Succession and authority: A case study of an African family business and a clan chief. International Journal of Cross Cultural Management, 11(2), 185-201.
[10] Sharma, P. (2004). An overview of the field of family business studies: Current status and directions for the future. Family business review, 17(1), 1-36.
[11] Shen Yongjian, Liu Wenjia, Sun Maopan, & Zhang Jinhua. (2016). The Harmony of Labor Relations and Firm Value: A case Study of Wanchunhua. Journal of Accounting and Economics, 3, 99-112.
[12] Wang Minglin, Xu Mengna, & Wang Hesen. (2014). Does Altruistic Behavior Reduce the Agency Cost? An Empirical Study Based on Kin Altruistic Behavior in Family Business. Economic Research Journal,49(03), 144-157.
[13] Zhang Jianhua, Jing Yi & Xue Mei. (2017). Family Succession. Beijing: China Machine Press, 90-110.
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