Centripetal Authority, Differentiated Networks: The Social Organization of Chinese Firms in Singapore

Abstract

This chapter examines Chinese family firms’ internal dynamics; organizational structure, particularly ownership patterns; authority structures; division of labour; and the principles of inheritance. Using case studies of large-scale Chinese firms such as the Hong Leong Group of Companies, it argues that Chinese businesses retain a highly centralized authority structure despite firm size. The paper also explores the definition of a family firm and suggests that a combination of effective control and ownership and the interplay of the two are a defining feature. The paper also deals with the problematic overlap between the family as a household unit and the firm as a business enterprise. Thus, a firm is governed both by formal structures as a business and the informal structures under a household patriarch. Finally, the paper details the “centripetal tendencies” of Chinese family firms, with strong desires to retain control and ownership even as a family business grows and diversifies.