Still a Chinese Family Business?

What is it about?

Successful Chinese family business (CFB) from founder to the next generation does not automatically transfer. CFB in the first generation is situational and dependent on the previous history of tacit knowledge to sustain the business. CFB is known for its association with family alliances, habitual ownership practices, and embedded networks. Consequently, a firm that has enjoyed success under its founder may not survive into the next generation. In this study, we identified exceptional CFB cases wherein firms successfully codified the tacit knowledge during the “generational change” phase. Our findings shed some light on how CFBs in the Malaysian food industry evolve by innovating their products to fit a larger market. Our contributions are as follows. First, our study qualitatively demonstrates an “edge” case not seen in the family business literature by leveraging on a uniquely diverse institutional environment (i.e. Malaysia). Specifically, our study suggests that CFBs evolve and emerge as globally competitive firms by codifying tacit knowledge. Second, we demonstrate that this process of transformative learning is central to innovation and competition within the context of succession planning for family businesses in general, not just CFBs.

Featured Image

Photo by Frame Harirak on Unsplash

Photo by Frame Harirak on Unsplash