In the next 10 year, the management of private enterprises will enter the "handover" peak period. Whether the "rich second generation" born with the golden key can be successful or not determines the sustainable development of China's private economy and the transformation of economic development mode to a certain extent. To this end, this newspaper invited two scholars to conduct in-depth discussions. It is the fifteenth issue of the column "Fighting for the Front" jointly opened by Shanghai Oriental Youth Club and this newspaper. The "second generation of private enterprises" has the foundation for successful succession. He Xiaogang ● With the improvement of China's legal system, the business environment of enterprises is becoming more and more fair and effective ● The nuclear family structure enables family conflicts to be resolved at low cost with the intervention of parents ● The comprehensive management ability of the second generation of private enterprises may be stronger than that of their parents. From the perspective of property rights system and social support, we think that the second generation of private enterprises in China has the foundation for successful succession, and they are still in a better position than their parents and other managers of the same generation. First of all, as far as the property right system is concerned, the second generation of private enterprises no longer have to worry about property safety like their parents. In the early days of China's reform and opening up, because private property rights were not protected by law at that time, the entrepreneurial process of private entrepreneurs was in a highly uncertain environment, and its difficulty can be imagined! Unclear property rights greatly reduce the exclusive investment of parents and entrepreneurs and reduce production efficiency. In 2004, China's constitutional amendment clearly stipulated that citizens' legitimate private property was inviolable, and the state protected citizens' private property rights and inheritance rights according to law. Where there is constant production, there is perseverance. Now the ownership of property rights is very clear, which has laid a good institutional foundation for the success of the second generation of private enterprises. And with the improvement of China's legal system, the operating environment of private enterprises will become more and more fair and effective. Secondly, family support laid an emotional foundation for the success of the second generation of private enterprises in China. The traditional cultural system emphasizes many children and grandchildren. Under the highly uncertain institutional environment, this kind of productive organization established by huge clans is helpful to reduce all kinds of political risks and commercial risks, but its disadvantages are also obvious. First, family conflicts and contradictions are one of the main reasons that restrict the growth of enterprises, especially after losing the core authority of ancestors and fathers, the family agency behavior for personal gain is even worse; The infighting in the succession process further weakened the advantages of the whole family, and the damage to the enterprise organization was enormous, even destructive. Many entrepreneurial family businesses closed down at this time. At present, this problem does not exist in entrepreneurial family businesses in China, because the family structure in China is becoming more and more core, and the descendants of business owners are mostly only children. Even if there are several children, there won't be a room full of children and grandchildren. The process of baton is much simplified, and the contradiction between family members does not exist at all or can be solved relatively easily at low cost with the intervention of parents. Therefore, the so-called "rich but not three generations" iron law may need to be revised. Family training has a good social foundation, and the strategic planning and rationality of the baton improve the possibility of its success. The concept of family control enables entrepreneurs to make a successful plan at an early stage. China entrepreneurs are not as far-sighted as we thought. In fact, most of them have begun to cultivate their offspring, such as arranging their children to go to better schools and even studying abroad. Provide them with good practical learning opportunities, and even children can enter the enterprise for exercise as teenagers. In order to sharpen their will, their children are often asked to start at the grassroots level. For example, according to a survey, 83% of Zhejiang businessmen said that their children should start at the grassroots level before being arranged to participate in high-level management activities. This rational training mode is efficient, because it can not only ensure that the second generation of private enterprises have a deeper understanding of the whole enterprise and gradually establish feelings with the enterprise, but also help them understand the hardships of starting a business, thus strengthening their belief in family fortune's value-added. Finally, the example of learning laid a good social foundation for the second generation succession of private enterprises. Many private enterprises in China have successfully completed the baton task, such as Tai Fang Group, Country Garden Holdings, Hodo Group Co.,Ltd. Co., Ltd. and so on. These successful cases have a good demonstration effect, which can not only be used as spiritual pillars, but also have good reference value. For example, Tai Fang Company's nine-year shift mode of "taking three years, helping three years and watching three years" is very successful and has become a successful experience mode. In addition, there are more and more ways to spread knowledge about the baton of private enterprises in China, which also lays the foundation for the success of the baton. For example, in some developed areas of private enterprises, government departments have incorporated the training of "the second generation of private enterprises" into the whole training plan of small and medium-sized enterprises. The successful succession mode and the dissemination of experience have played an indispensable role in improving the quality and ability of the second generation of private enterprises. It should be emphasized that the second generation of private enterprises does not mean that they must inherit their fathers' career, but should make good use of their fathers' property and other resources, make the best use of them, and invest their property in the fields that are most likely to create value. Nowadays, private enterprises should not only participate in domestic competition, but also participate in international competition. In this context, we can even boldly think that the second generation of private enterprises can not only complete the task of baton, but also its comprehensive management ability may be stronger than that of their parents and contemporary enterprise managers. Shine on you more than blue. First of all, the vast majority of the second generation of private enterprises were born in China. In their childhood or adolescence, they have personally felt the operating rules of China's culture and system, and know what is necessary to do business in China, such as not losing friends and maintaining government relations. At the same time, compared with the first generation, the second generation of private enterprises has a broader strategic vision, especially an international vision. A survey shows that 70% of Zhejiang businessmen's private entrepreneurs have arranged or intend to arrange for their children to study abroad. Secondly, the second generation of private enterprises has a better material capital and social capital foundation. "Rich second generation" is both a derogatory term and a commendatory term. "Wealth" is the material basis for the growth of enterprises. Without wealth in the trading market with asymmetric information, who will believe your strength? The material wealth accumulated by parents not only helps the second generation of private enterprises to reduce communication costs in the transaction process, but also helps them attract excellent management talents. The personal relationship accumulated by parents can be inherited to some extent, or can be maintained at low cost. These material capital and social capital are the innate superior resources of the second generation of private enterprises. Thirdly, the second generation of private enterprises basically received a good education, and because of their contact from childhood, the second generation of private enterprises with a sense of mission has a very clear learning goal and can truly integrate theory with practice. Their professional knowledge level may be far above that of their parents, and their comprehensive management ability may be even more remarkable, so they know how to manage enterprises scientifically and standardly. Finally, the second generation of private enterprises also better understood the relationship between family and enterprise. The second generation of well-educated private enterprises may know better how to clarify the relationship between enterprises and families by reforming the corporate governance mechanism, such as how to cultivate the harmonious culture of the company and enhance the cohesion of the team in the process of de-familization. Of course, the second generation of private enterprises is not without challenges, and the shadow of their parents is likely to accelerate them to become "black sheep." If they can't be as hard-working, diligent, persistent, tolerant and patient as their parents, fulfill more social responsibilities to change their views on the "rich second generation" and gain more social tolerance and recognition, they may fail even more. (The writer is a professor at the School of International Business Administration, Shanghai University of Finance and Economics. ) This "rich second generation" has followed in his father's footsteps and passed the customs in Mishima Yang Rong. ● Whether you can successfully take over the baton is the result of three factors: individual, organization and environment. ● Overall, the proportion of "rich second generation" who successfully took over the baton may decrease. ● Private enterprises can solve the succession problem by introducing professional managers. Most of the private enterprises in China are family businesses, and many of them are over 50 years old. In the next 10 year, the inheritance of wealth and the success of the "rich second generation" have become an unavoidable proposition. There are both successful cases and failed lessons when the "rich second generation" replaces "creating a generation", which shows that the succession problem is complex and cannot be simply summarized by yes orno. The author believes that the success of the "rich second generation" is the result of the comprehensive effects of individual factors, organizational factors and environmental factors. Handing over the baton is not a personal factor, including the incumbent and the successor, but every aspect involves many subtle factors, such as personal accomplishment, psychology, experience, education and ability. Judging from the individual factors of the incumbent, the most important question is whether Chuangyi is willing to leave and whether it can leave smoothly. Canadian scholar Sharma asserted that "the incumbent is unwilling to let go" has the highest frequency in the study of family business inheritance obstacles. Enterprise is another "biological son" in the founder's mind. Many entrepreneurs who are over 60 years old are still active in the front line of business wars and are unwilling to give in. As one manager said, "giving up this business is equivalent to signing your own death certificate." In addition, the trust and knowledge inclination of the incumbent are very important for the successful departure of Chuangyi. Some scholars pointed out that in order to ensure the successful inheritance of enterprises, incumbents should have the characteristics of being willing to guide, actively cooperate and be willing to create new ideas. Judging from the personal factors of successors, the most important thing is whether the "rich second generation" is willing to take over and whether they have the ability to take over. The first question is the decisive factor. A survey of businessmen in Zhejiang shows that 37% of the "rich second generation" want to start their own businesses. First, the family business is not attractive enough. The "rich second generation" will lack confidence and be unwilling to take over because of the lack of development prospects and narrow business scope in the industries operated by their parents. Second, the "rich second generation" are more inclined to pursue individuality and engage in their favorite jobs when their parents can give them enough financial support. Third, many "rich second generation" who have received higher education or returned from studying abroad have their own unique views on the development of the industry and are unwilling to be labeled as dependent on their parents and getting something for nothing. In all these cases, many people choose to leave the family business and start their own businesses. Sometimes the second question is also very important. In a study of American family businesses that failed in succession, researcher Lebreton Miller found that 45% of the failures in succession were due to the incompetence of the heirs in the leadership role. The lack of well-thought-out succession planning in enterprises involves many factors. Besides the attraction of enterprise development and organizational culture to successors, the author thinks that the most important thing is long-term successor planning and its implementation. Zhang Yin, chairman of nine dragons paper, said, "I am very satisfied with my two sons. They work hard and keep a low profile, but they don't have the ability to take over. They still need to exercise. I have to be responsible for the employees of the company. " The intergenerational inheritance process of family business is complex and risky, so it is very important for the successful continuation and development of family business to carry out planned management in advance. But in fact, succession planning and its management are often ignored by most enterprises, so it is often ordered at critical moments. In 2004, Li Haicang died unexpectedly. At the age of 23, Li Zhaohui had to finish his studies and come back early to take over as the chairman of Shanxi Haixin Group. Although there is the support of the "old minister", it is difficult for the immature shoulders to shoulder the heavy responsibility for a while. Without a careful successor plan, when an enterprise encounters an emergency, it may collapse because of the drastic changes in the power structure and ownership distribution of the enterprise. The external environment of modern enterprises is changeable and diverse. From the social and cultural environment, on the one hand, traditional social culture emphasizes "inheriting the father's business" and does not trust people who are not related by blood; On the other hand, modern social culture emphasizes the corporate governance structure in which values and ideas are consistent, ownership and management rights are separated, and shareholders' meeting, board of directors, board of supervisors and professional managers perform their respective duties, restrict each other and make effective decisions. From the economic environment, on the one hand, traditional industries are constantly grafting new ideas, new concepts and new technologies; On the other hand, economic globalization, information explosion, emerging industries emerge one after another, and the effect of making money is prominent. The multiple influences and changes of this environment not only require the "rich second generation" to inherit his father's business, but also attract the "rich second generation" to look elsewhere. Generally speaking, the "rich second generation" is well educated, sensitive to new things, easily stimulated by the environment, and has a strong desire to "look at the problem from another angle". Only 30% of family businesses can succeed in the second generation of private enterprises, which is a systematic project, and various factors are always interrelated, influencing each other, playing a game with each other and playing a role as a whole. Among them, the individual factor of the successor is the internal factor, and the successor's willingness to take over is the decisive factor; Organizational and environmental factors are external factors and play a role through internal factors. The author believes that the basic characteristics of future environmental factors are change and innovation. The change of environment and the appearance of new things will constantly impact the traditional concept of "inheriting father's business". More and more "rich second generation" who are extremely sensitive to new things will be eager to develop new industries independently with the help of capital advantages. The lack of the organization's "succession plan" and the reluctance of the "first generation" to completely give up power have strengthened the expectation that the "second generation" is unwilling or unable to take over. Although there will be successful cases of "rich second generation" taking over in the future, on the whole, the proportion of "rich second generation" successfully taking over the baton may decline. According to the Report on the Development of Private Enterprises in China issued by the All-China Federation of Industry and Commerce, only 30% of China family enterprises can continue to the second generation, and only 10%- 15% can successfully connect to the third generation. American scholars davidow and Narwa also pointed out that in the United States, only about 30% of family businesses can successfully transition to the second generation, only 12% can successfully transition to the third generation, and the probability of successfully inheriting to the fourth generation is only 3%. These data also confirm the author's point of view to some extent. To sum up, the author thinks: First, the problem of the baton of private enterprises in China is a long-standing common problem, which will attract more and more attention with the passage of time. Second, the traditional practice of "inheriting the father's business" is fading. If the "rich second generation" cannot take over, it does not mean that the original private enterprises cannot survive and develop. Private enterprises can solve the problem of head succession by improving corporate governance structure and introducing professional managers. In countries all over the world, there are countless successful examples of this succession model. Finally, the fact that the "rich second generation" does not take over does not mean that the "rich second generation" is a playboy, and each generation is not as good as the next. In fact, the "rich second generation" are generally well educated, have ideals and knowledge, have heard and witnessed the wisdom and courage of their parents in business, and have accumulated funds from the previous generation. They also have the blood of Chinese businessmen, and public opinion should encourage them to independently develop new industries or fields and create new business models. Conversely, their independent development may have a beneficial impact on the private enterprises founded by their parents. (The author is the vice president and professor of the Business School of East China Normal University)