The Art of Family Business Succession
Communication between the older and younger generations is vital in the succession of Chinese family businesses. Find out more in a feature article by Prof. Kevin Au and Dr. Wong Kam Shing published in WEALTH magazine.
Family business founders pour their heart and soul into building their companies. Every family business is the result of painstaking efforts that combine its founder’s life experiences and knowledge in building and operating his/her business. When family business founders get old, they are very much concerned about how to pass the business to their heirs.
Nowadays, the new generation of a family business may have their own aspirations and may not be enthusiastic about inheriting their family business after having graduated from university. This may lead to potential family succession problems. In Chinese family businesses with well-managed and successfully succession, the new generation has usually been nurtured and taught in an environment where the family members stick together to inherit their family business when they were still very young, with careful guidance by their predecessors.
However, the first and the succeeding generations of a family business may face communication challenges during the succession process. To show their dignity, the founder of a family business generally would be very tough to the new generation when they have made mistakes or failures. On the other hand, members of the succeeding generation generally have attained good academic qualifications and professional knowledge, which in turn would contribute to their perception that their predecessors are conservative and averse to changes and innovation.
For Chinese family businesses, the communication between the older and younger generations are vital. Family business succession must involve holistic planning, so that the successors can understand how the succession plan can be implemented at least in the future five years.
Find out more in a feature article published in WEALTH magazine《財富管理》‘s November 2014 edition. The article is co-authoured by Kevin Au, Associate Professor of Department of Management and Director of Centre for Family Business; and Dr. Wong Kam Shing, a Family Entrepreneur-in-Residence of Centre for Family Business at CUHK Business School. Click on the images below for further reading.
This article is available in Chinese only.
This article has also been reprinted by eight online media outlets in mainland China so far, including Hexun.com《和訊網》, Eastmoney.com《東方財富網》, National Business Daily《每日經濟新聞》and more.
Source: WEALTH magazine《財富管理》
Date published: November 2014
