Sun Yat-Sen Management Review  1994/12
Vol. 2, No.4 p.55-68
Department of Business Administration Chung Yuan Christian University
This study tries to explore the nature and managerial style of the “traditional” family businesses in Taiwan from the viewpoint of socio-cultural aspect. The nature of entrepreneurship and strong cohesiveness are the major contributing factors to family business’ success and organizational growth. The managerial style derived from the familism mentality, however, plays on obstructive role on organizations’ further growth. For the managerial style of the family businesses tend to be authoritarian-leading, personal-oriented(kuan-hsi), and impression-managing in nature. Authoritarian leadership excludes the power-balancing mechanism in the organization. And the concept of kuan-hsi leads to distribute different levels of inducements to organizational members not only by their achieved performance but also by their ascribed statuese. Yet there is no balancing mechanism in the “traditional” family businesses to redesign this improper distribution of incentives. When non-family/professional members are needed to preform decisive tasks in the growth stage of the organization, top management(the family members) of the family businesses distribute insufficient incentives to these professional “outsiders.” Hence these middle-level professionals will leave gradually and hollow the organization. Besides, high-level family members of the organization stay in a “stagnant equilibrium(no outflow)” status and low-level employees stay in a “dynamic equilibrium(inflow as well as outflow)” status. Middle-level professionals in this system, however, stay in an “outflow inequilibrium” status. This system phenomenon of “bipolar-coexistence” will obstruct further growth of the organization. Moreover, the familism mentality of the first-generation entrepreneurs will divide up family properties when bequeathing their businesses to the second- generations. This division of family properties is a tacit but rigid rule in Chinese culture and it represents an inner reason for family business’ diversification. In other words, a family business will be disintegrated between generations autonomously. Although this disintegration has proliferous implication in nature, it obstructs the original organizations’ growth. The phenomena of “bipolar- coexistence” and “between-generations’ disintegration” family businesses in Taiwan reveal specific socio-cultural meanings when obstructing organizational growth in size. The familism mentality of local entrepreneurs is one of the most important dynamics to establish their businesses. One the other hand, however, it plays an obstructive role on organizations’ further growth. This paradoxical nature of familism mentality needs careful assessment and adjustment by entrepreneurs when facing business success and growth in size.(633621972393281250.pdf 58KB)
Family Business；Organizational Growth；Autonomous Obstruction to Size；“Bipolar-coexistence” Phenomenon；“Between-generations’ disintegration” Phenomenon.