The Theoretical Analysis of the Allocation of Family Control Rights B Oc10/17 | страница 3

L. Y. Gu
Brothers and Sisters

Caifeng Shou3.57%

Mother and son

Nengen Chen11.2%

Mother and Son

Zhiyu Chen8.04%

Jianjun Wang 10.71%

Jianfei Chen11.85%

Jianxia Wang12.39%

Nengfeng Shou3.24%

Father and Daughter

Ownership Control

Xiaofeng Shou

Father and Daughter

Jianguo Chen11.85%

Helei Shou3.57%

Zhijun Chen8.04%

Mother and Daughter

Jianli Wang4.17%
Shou’s family88.63%
Nengfeng Shou54.74%
couple
Nengen Chen4.32%

Yongjie Wu2%

Smith Barney Knitting4.9%

Busen Group73.4%

Hansikunyuan Ventrue3%

Dasen Investment 9.5%

Control

Jianfei Chen：

Zhijun Chen：

Helei Shou：Board

Director

Director

Director

Managers

Yongjie Wu：

of the board

Board of Directors

Jianjun Wang:Chairman

Control

Busen Garments（002569）

Secretary

Yongjie Wu: General

Jianxia Wang：

Zhijun Chen：Executive

Helei Shou:

manager

Vice-general manager

vice-general manager

Vice-general manager

Figure1. Family guanxi-oriented control structure figure of Busen Garments Data source: The initial public offering
prospectus of Busen Garments (002569).

family members, some scholars start to pay attention to the allocation of the family internal rights which will influence the decision-making behavior of the enterprises.
Even the nuclear member of the family (immediate family) also can’t guarantee the identical interests, let
alone the pan-family [7]. The family members who participate in the production activities of family enterpris e
are agents too. Their goal and preference will not identical. They are altruistic, but self-serving. They chase the
maximal non-economic and economic utility for themselves [8]. Altruism can reduce the agency costs in the
early stages of the family business development, but will increase the agency costs when the family business
becoming large and mature [9].
If the family agents participate in the decision making, it may lead to suboptimal decisions [10]. The conflicts
between the controller and the other family members will be determined by the allocation of the family internal
equity [11]. The generational ownership dispersion will influence the family conflicts directly or indirectly [5].
The interpersonal conflict between the family members will bring negative influences to the corporate governance efficiency. The internal conflicts and the agency problems are discrepant between different combinations
of family members [12].

3.2. The Allocation Mode of the Family Control Rights
Most research about the allocation of control rights start their discussion from the corporate angle. We can seldom find the research about the allocation of the family overall internal control rights. A few papers which concerning the family authority and family agency problem may refer to the allocation of family equity, the managerial position occupied by the family members and so on.
The sustainable growth of the family business needs an authority. Sharing the control rights may lead the
family members to scramble for the limited resources, and result in the demise of the family business [13]. In
order to master the family firms by family members, a number of the family business owners tend to adopt
management mode of family control. They won’t let appointment to non-family members [14].
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