The Secretary-General of the HEAD Foundation and co-Editor of the Oxford Business Handbook of Asian Business Systems, Professor Gordon Redding, looks at what research has to say about the common Chinese saying that a family’s wealth does not last beyond three generations. A study of leadership transitions in public-listed family businesses in the region between 1996 and 2005 indicates that over the five years in which each transition took place, the overall average loss of market-adjusted stock return was 56%. Professor Redding addressed four key questions in his lecture:
- What are the causes of such long-term fragility in this organizational type?
2. How significant is the type as a contributor to the forms of capitalism in the region?
3. What are the means of avoiding the weaknesses at the organizational level?
4. What are the means of avoiding the weakness at the societal level?