Family Business Succession in Asia
(8 pages of text)
The Wang Group was created by Alfred Wang in Hong Kong after fleeing China during the turbulence at the beginning of the Communist regime. After successfully building up a diversified trading business and expanding to various other Asian countries, the business was taken over in 1995 by his second son, Charles Wang, a charismatic leader. Charles wished to create a more sustainable family business, attuned to global trends and run by non-family members. To this end, Charles hired an outside CEO to carry out his vision after implementing a far-reaching corporate change program. The global economic crisis that started in 2008, however, affected the company halfway through this reorganization, and brought losses and the departure of the newly hired CEO. Charles Wang had no other option than to again take up the top job himself, and he had to reconsider the path towards a sustainable future for the family firm.
The objective of the case is to understand issues related to the transition of a family firm towards a professionally managed entity. The case can be used to discuss this from the following angles:
- Succession and leadership of family firms: As the Wang Group developed into a billion-dollar group, the firm’s owner attempted, on one hand, to influence the organization and, on the other hand, to step back and allow a hired CEO to implement his vision. The unsuccessful first attempt towards family firm professionalization allows students to understand the mutual responsibilities of family owners and non-family managers, and to appreciate the difficulties families face when transforming a firm from family-run to family-owned and professionally run. This case is particularly useful to highlight the characteristics of Asian family firms.
- Change management: The Wang Group was experiencing a profound strategic change process as the second-generation leader took over. Charles Wang tried to instill family values and prepare the firm for a sustainable future. The case allows students to see how business development and family leadership are intertwined, and subsequently assess what type of leadership is necessary to take over after the change process.
Asia, Large, 2011
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