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?
- How significant is the type as a contributor to the forms of capitalism in the region?
- What are the means of avoiding the weaknesses at the organizational level?
- What are the means of avoiding the weakness at the societal level?
