ABSTRACT
The last three decades have witnessed a significant development of China’s private sector. The sector, which was banned as the ‘tails of capitalism’ (Zibenzhuyi weiba) in the 1950s (Young 1989), has become not only a lawful new business component since 1978 but also an irreplaceable sector, contributing approximately 65 per cent of national GDP (Huang 2008; Zhang 2007: 69). Nevertheless, Chinese private enterprises have faced several institutional challenges, including unfavourable institutional treatment in the form of resource allocation and hypercompetition (Redding and Witt 2009). Family businesses, defined as ‘owner-managed enterprises with family members exercising considerable financial and managerial controls’ (Ward and Aronoff 1990: 63), are a particularly important but still under-researched contributor to this private sector growth. Family businesses in China, accounting for approximately 90 per cent of the country’s private sector by the number of firms (Ma et al. 2002), arguably present the most typically Chinese form of China’s workplace. Central to this tradition is Confucianism, which espouses conformity, submission and respect for parents and elders, obedience to supervisors, and duties to family, loyalty, humility and diligence (Kahal 2001). That has obvious implications for human resource management.
