Still a Chinese Family Business?

Abstract

Success in Chinese family business (CFB) does not automatically transfer from founder to the next generation. CFB in the first generation is situational and dependent on the previous history of the tacit knowledge required 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, I identified exceptional CFB cases wherein firms successfully codified the tacit knowledge during the “generational change” phase. The findings shed some light on how CFB s in the Malaysian food industry evolved by innovating their products to fit a larger market. My contributions are as follow. First, this 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, this study suggests that CFB s evolved and emerged as globally competitive firms by codifying tacit knowledge. Second, I demonstrate that this process of transformative learning is central to innovation and competition within the context of succession planning for family business in general, not just CFB s.