THE PROFESSIONALIZATION OF CHINESE FAMILY BUSINESSES IN SINGAPORE

Abstract

It has become common advice furnished to family businesses that in order for them grow and further develop, they need to professionalise their management. The literature suggests that firms that follow this advice will perform better and show higher survival and growth. This paper presents the findings of a study on the professionalisation of family businesses in Singapore. It examined whether family businesses that have professionalised their management differ from these that have not. It is anticipated that the professionalised Chinese family businesses would benefit from the introduction of professional managers. It was anticipated that they would be older in age (since succesion is not confined to family member), report better business performance, and adopt aggressive growth strategies. Firm differences were studies using three dimensions: firm characteristics like age and size when professionalised; performance differences using growth and business volume measures developed by Chandler and Hanks (1993) and growth strategies using the Miles and Stones typology (1978) of growth oriented firms. The study found that the professionalised family businesses did not differ in age but showed significant difference in size, better performance and aggressive growth strategies from those that were not.