The Succession of Love: The Special Challenges of One Child Policy on Chinese Family Business Succession
In a feature article published in Forbes China, Prof. Kevin Au indicates that successful family business succession in China requires extra efforts in creating a sophisticated plan.
It has long been a tradition in China for family businesses to choose a successor within the family. However, the One Child Policy inherently limits the choice of successors and the lack of suitable successors is gradually becoming the norm in many Chinese family firms.
In a feature article published in Forbes China’s September 2014 issue on the special challenges that One Child Policy has brought on to Chinese family business succession, Kevin Au, Associate Professor of Department of Management and Director of Centre for Family Business at The Chinese University of Hong Kong Business School, points out that in China, most of the first-generation entrepreneurs have prioritized their careers above their families, which has led to limited communication with the second generation. At the same time, as the younger generation has been increasingly exposed to the Western culture and values, the gap between the two generations is becoming wider and wider. As such, it is difficult for the second generation to share the same values with their parents and to recognize their achievements, and even more difficult for them to consider taking over the business.
Prof. Au adds that it takes time for the second generation to learn about their parents’ business, and only when they share the same feelings as the first generation toward the family business will they be willing to take up the helm and lead the companies. He concludes that successful family business succession in China requires extra efforts in creating a sophisticated plan. The process of coming up with such a plan will force family business owners to identify and resolve many issues within the family, which may eventually have a positive impact on the future of family business… Read More (PDF)
This article is available in Chinese only, and please click the image below to read the story published in the magazine’s print edition.