Analysis on the Current Scenario of Succession in Small-to-Medium-Sized Enterprises in Mainland China: Observations from 2016 China Family Business Health Report

Since China’s reform and opening up, the private economy in Mainland ChinaChina has made great progress and has become an important growth engine of the national economy, employment, and social progress. China’s private enterprises have shown distinct family characteristics. After more than 30 years of development, most private enterprises have entered a critical period of the first trans-generational successionTrans-generational succession. A large number of first-generation entrepreneurs are about to retire. Although the younger generation generally has higher education, these potential successors often lack practical management experience, which makes the process of family business successionFamily business succession painful. Given this background, analyzing the components of “health power,” investigating the health status of Chinese family firms, and exploring a successful trans-generational successionTrans-generational succession path of family firms are of great significance for theoretical research and socioeconomic development. This chapter attempts to shed light on the healthy development of Chinese family firms and provide a mirror for the future development and succession of family firms. The health of family firms in this study is a fusion of the two concepts: both family and firm health. The framework of the external environment, entrepreneurs, entrepreneurial families, and enterprises interacts to form an ecosystem that affects the health of the family firm.