Wealth Doesn't Last 3 Generations: How Family Businesses Can Maintain Prosperity »

With 175 family businesses on the Fortune 500 list, from DuPont and Motorola to IBM, there is no doubt that family-run enterprises play an important role in global economic development. Their role is no less significant in China where, in keeping with the country's rapid economic growth, family businesses are emerging in increasing numbers.

Unique characteristics, such as succession, management, staffing, family affairs, strategy planning and governance structure, set family businesses apart from other business types. As a result, they face particular challenges in survival and sustainability.

In this book, three modern Chinese family businesses, including food and beverage company Yeo Hiap Seng, are studied to analyze the problems that family enterprises face. Other case studies include long-standing family businesses in Europe, America and Asia, such as Ford, Kikkoman and Samsung. This book also discusses the changing characteristics of Chinese family businesses, the pitfalls that such enterprises are likely to face, and how they can overcome these pitfalls and achieve sustainable development.

Preface v

About the Authors vii

Introduction: A Curse Upon Family Enterprises? xiii

Section I Interpreting Family Enterprises 1

Chapter 1 Yeo Hiap Seng: A Typical Case Study of a Family Enterprise 3

Interpreting the Fate of Chinese Family Enterprises Through YHS 3

Family-Oriented Management: Reasons for Both Success and Failure 8

Power Transfer: To Be or Not to Be 12

Internal Conflicts in Family Enterprises: Emotional or Rational 15

Case 1 Yeo Hiap Seng: The Collapse of a Family Enterprise over Three Generations 19

Chapter 2 Family Enterprises in China: The Struggles of the First Generation 41

Governance Structure in Family Business 41

Case 2 Delong: Corporate Governance 49

The Dilemma of Management System for Family Business 66

Case 3 Huanghe: Familial Management Versus Professional Management 72

Section II Family Enterprises Around The World 83

Chapter 3 Development of Family Enterprises in Europe and the US 85

Characteristics of American Family Enterprises 86

Case 4 Ford Motor Company-Wealth Beyond Fifth Generation 93

Characteristics of European Family Enterprises 111

Case 5 Porsche Company - The Outstanding Second Generation 123

Chapter 4 Characteristics of Asian Family Enterprises 137

Family Enterprises of Japan 138

Family Enterprises of South Korea 145

Family Enterprises of Hong Kong 149

Family Enterprises of Taiwan 153

Family Enterprises of Southeast Asia 158

Case 6 Case of Kikkoman: A Combination of Tradition and Modernity 165

Case 7 Samsung Group: From Family Enterprise to Global Brand 177

Case 8 Lee Kum Kee: A Family Enterprise Whose Wealth Lasts over Five Generations198

Section III Development Of Family Enterprises In China 211

Chapter 5 Merchants from Huizhou and Shanxi during the Ming and Qing Dynasties 213

Merchants from Huizhou, Anhui Province 213

Merchants from Shanxi Province 217

Chapter 6 Family Enterprises in Modern China 229

Proliferation of Family Enterprises in China 230

Three-Dimensional Development of Family Enterprises 237

The Characteristics of China's Family Enterprises Bigger and Stronger 240

Case 9 Hope Group: Making Family Enterprises Bigger and Stronger 249

Case 10 Wanxiang Group - Three Axes of Family Enterprise: Family, Enterprise and Ownership 272

Chapter 7 Breakthrough of Chinese Family Enterprises 287

The Axis of Family 288

The Axis of Ownership 297

The Axis of Enterprise 301

Section IV Conclusion 307

Chapter 8 Sustainable Development of Family Enterprises 309

Going Public: A Breakthrough in Capital and Governance 309

Family Committee: Sharing Expereinces 314

Shaping "Enterprise Family Culture": Separation of Ownership and Management 320

Innovation: Source of Longevity 333

Epilogue 345

References 347

Index 351