China shifts from investment driven and state sponsored growth to sustainable growth from business enterprise
China now faces a major challenge to shift from investment driven and state sponsored growth to sustainable growth from business enterprise. How well it manages this shift is tied up with how well its burgeoning family businesses evolve and mature.
Peking University, Guanghua School of Management, Saïd Business School, Oxford University and Harvard Business School have teamed up to help Chinese family firms manage this evolution and drive the transformative changes they need to expand and prosper in a competitive global business environment.
Leading & Transforming Family Businesses, the new program from this triad of prestigious business schools, aims to develop organizational leadership skills to steer family businesses effectively and to foster an understanding of innovation and the need to innovate to create customer value in modern often knowledge based markets.
“Chinese family businesses are at a historic turning point,’ said Eric Thun, Peter Moores Associate Professor in Chinese Business Studies at Oxford Saïd. “At the same time as confronting the challenges in the domestic market that are common to all Chinese firms, many are making leadership transitions from the first to the second generation.”
It is less than 40 years since Deng Xiaoping’s reforms ushered in the era of private enterprise in China. It is estimated now that the private sector accounts for over two thirds of GDP, a figure that is set to rise as the new government continues its plan to cut back on state-owned enterprises. It is then further estimated that 85% of Chinese private sector companies are family owned.
A major concern now is that, as the pioneering entrepreneurs who built this phenomenal expansion retire and pass control to offspring, who may not share the entrepreneurial instinct of their parents, these family businesses risk inertia or decline; a danger often exacerbated by a reluctance to employ professional managers from outside the family. These problems are of course common to family businesses everywhere, but in China the generational change is happening across the whole sector around the same time.
On the positive side, many of the future leaders of China’s family businesses are highly sophisticated, well educated - often to MBA and Executive MBA level - and many are more than capable of meeting the challenges they face.
The key areas where the Leading & Transforming Family Businesses program will provide support are in strengthening corporate governance, increasing the capacity to innovate, and designing sound growth strategies that take advantage of local and global opportunities. The program lists as its objectives:
“Chinese family businesses have been and will increasingly be an engine of the Chinese economy. During the programme, we will look at the distinguishing traits and opportunities of family businesses from China, Hong Kong, Taiwan and beyond,” says William C. Kirby, T. M. Chang Professor of China Studies at Harvard University and Spangler Family Professor of Business Administration at the Harvard Business School. “Using case studies of real-world scenarios, world-renowned faculty will sharpen the participants’ skills in analysing issues, exercising judgment and making difficult decisions, equipping them to shape a sustainable future for their family business and a strategic transition to the next generation of leaders.”
The Saïd Business School is Europe’s fastest growing business school. An integral part of the University of Oxford, it embodies the academic rigour and forward thinking that has made Oxford a world leader in education.