Abstract

Beginning in the late 1970s, China’s economic reforms created conditions for the emergence of a generation of entrepreneurial, founder-managed family firms. These firms were not universally welcomed by the transitional regime, but they were tolerated, and many went on to play a significant role in China’s ascendance as a global economic power. Some four decades later, many of those founder entrepreneurs are considering retirement and planning for the future leadership of the firms they established. China’s society and its economy have changed dramatically since the reform period. Socioeconomic changes are reflected in China’s rising generation that has little experience of the hardship experienced by the prior generation. The rising generation is much wealthier and better educated than their parents. China confronts continuing economic challenges in migrating from reliance on agriculture and commodity manufacturing towards a higher value-added services and technology centered economy. Fortunately, its rising generation is eager to acquire new skills and is already highly proficient with leading-edge information and communication technologies. Many Chinese family firms (CFFs) have adapted well to the ongoing socioeconomic changes, but many traditional Chinese family values have been retained (Egri & Ralston, 2004; Ralston, Egri, Stewart, Terpstra, & Yu, 1999). In particular, the expectation that a family member should succeed to the leadership of the family firm remains strong.