Towards a Structural Model of a Small Family Business in Taiwan

Abstract

The importance of small and medium size enterprises (SMEs) in Taiwan’s economic development is well documented [for example, in a recent article, Wu et al. (2006) examine the contributions of SMEs to Taiwan’s exports]. However, most studies on SMEs have not systematically examined the structure, people and entrepreneurial process of a typical small family business in Taiwan. More specifically, it would be fruitful to understand Taiwan’s family business in terms of economic sociology. Such approach on Taiwan’s SMEs has been conducted by Hamilton and Kao (1990), Kao (1999) and Chen (1994, 2001, 2007) in the tradition of Max Weber. This chapter attempts to formulate a structural model of Taiwan’s small businesses using theories of human agency given by Max Weber (1921/1968) and Alfred Schutz (1962, 1967, 1970). This chapter argues that a typical family business in Taiwan consists of three major components: entrepreneur or boss (laoban) (Sect. 2.2), boss’s wife (laoban liang) (Sect. 2.3) and core team (bandi) (Sect. 2.4). The trinity of these components typifies a small business in Taiwan. Moreover, underlying small businesses in Taiwan is the Chinese family style of management which enhances competitiveness and flexibility in global markets.