Operational barriers

Researchers have found that many retired entrepreneurs are reluctant to give up control of the family business even after they have handed over the reins of the business to their children.

"Many second generation entrepreneurs feel they are being manipulated by their parents and are simply the figurehead of the enterprise," said Chen Ling, a Zhejiang University researcher.

"Parents' interference in the business may frustrate the heirs and discourage them," Chen added.

Key to business success is often the relationships between relatives, since many entrepreneurial family enterprises are run by family members.

"At the time of succession, rivalry and jealousy can trigger a scramble for power and lead to conflict among the relatives," Chen Ling said.

"The young entrepreneurs may find it hard to deal with the relatives, especially the elder ones."

To help family enterprises overcome succession crises, many institutes have been established in China. They offer training courses to groom second-generation entrepreneurs and help with succession planning.

Some scholars say the government should invest in cultivating professional managers to take over enterprises in place of the incapable or unwilling children of the entrepreneurs.

Mao Lixiang, head of Ningbo FOTILE Kitchen Ware Co., Ltd., said, "Even if the children lack ability, the bosses will only feel at ease if their offspring take over their company."

Chen Ling said, compared with their parents, many second generation entrepreneurs received a good education, have broader horizons and are more innovative and open-minded.

"If the family enterprise can survive the problems arising from the succession, it has a bright future."

(Xinhua News Agency October 18, 2010)