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The succession process in Chinese family firms: A guanxi perspective

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  • Junsheng Dou
  • Shengxiao Li

Abstract

Intergenerational succession is a principal cause of the high failure rate among first- and second-generation family businesses. The purpose of this paper is to contribute to the understanding of the complexity and dynamics of the succession process by examining the role of guanxi. This paper uses an exploratory case study of six Chinese family firms. The results of this research indicate that (1) the succession process of entrepreneurs’ guanxi networks can be divided into four representative phases, namely, preheating, triggering, readjusting, and reconstructing; and (2) each phase requires performing some characteristic tasks. Such tasks include the cross-generational teaching and learning of guanxi philosophy, the deconstruction of the profile of guanxi networks, the introduction of the next generation to existing guanxi parties, the cross-generational role readjustment in guanxi building and management, the renewal of guanxi parties, and the rebuilding of guanxi net structures. The results of this study also provide an extended theoretical model that helps to explain the relationship between the intergenerational transfer of entrepreneurs’ guanxi networks and the transfer of leadership. Copyright Springer Science+Business Media, LLC 2013

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  • Junsheng Dou & Shengxiao Li, 2013. "The succession process in Chinese family firms: A guanxi perspective," Asia Pacific Journal of Management, Springer, vol. 30(3), pages 893-917, September.
    • Handle: RePEc:kap:asiapa:v:30:y:2013:i:3:p:893-917
    DOI: 10.1007/s10490-012-9287-7
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    6. Shen, Na & Su, Jun, 2017. "Religion and succession intention - Evidence from Chinese family firms," Journal of Corporate Finance, Elsevier, vol. 45(C), pages 150-161.
    7. Ting, Su-Hie, 2020. "Modes of Value Transfer in Chinese Family Business in Malaysia," Asian Business Review, Asian Business Consortium, vol. 10(1), pages 29-36.
    8. Liu, Fangyi, 2021. "Family business succession roadblock model based on fuzzy linguistic preference relations," The North American Journal of Economics and Finance, Elsevier, vol. 55(C).
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    11. Jing Zhao & Michael Carney & Shubo Zhang & Limin Zhu, 2020. "How does an intra-family succession effect strategic change and performance in China’s family firms?," Asia Pacific Journal of Management, Springer, vol. 37(2), pages 363-389, June.
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