Chinese Family Business Case Study

As briefly noted in a reference book, Chen, M. (2004) elaborated that the Chinese family business (CFB) became one of the dominant organizational forms of Asian business; and furthermore, the Chinese family business contained two dimensions. The first one included only family members and operated the small business with limited resources. The other dimension referred to employ non-family members which were a sort of clan business. In general, the CFB could provide all jobs and sales over fifty percent in Asia Pacific.

Furthermore, Far East Consortium International Limited (‘Far East’) and New World Development Company Limited (‘New World’) were well-known CFBs in Hong Kong. In fact, these two CFBs were operating in the property industry and

As described by Chen, M. (2004), the organizational structures were influenced by the ownership and control. The close relatives in whom holding the most critical executive position would support the founders; and meanwhile, Robbins, S., & Coulter, M. (2014) explained the organizational structure was a system on how to arrange the jobs within an organization. There was a difference between the Far East and New World. The second generation of Far East would inherit the position of Chairman and Chief Executive Officer who appointed a non-related employee as Managing Director to formulate and implement the strategies for development. Moreover, the non-related employee could make the critical decisions. On the contrary, the second generation as a Chairman and Executive Director in who appointed the close family member as a Non-executive Vice Chairman to formulate strategies. All decision-making was centralized; and furthermore, all employees’ behavior was guided by rules and

As elaborated by Chen, M. (2004), the CFB’s management style was authoritarian. Most of the boss would control the information and transmit the piecemeal to their subordinates because in order to maintain power. In addition, the boss had the power so that the subordinates were unable to outperform him. In reality, different CFBs had different management styles. The Far East should adopt the management style of the contingency approach. Through of this approach, Far East depended on its business situation to make the essential strategies. In contrast, New World should adopt the management style of the classical approach. Based on New World’s milestones, the second generation would also follow his father’s footsteps to run the businesses. Hence, New World was the bureaucratic business. The bureaucratic management was the most efficient form, included a clear division of work, a well-defined hierarchy of authority, and a system of procedures for dealing with the