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Competing for leadership and ownership: the Li & Fung Group’s legendary and strategy

Victor Zheng (Hong Kong Institute of Asia-Pacific Studies, The Chinese University of Hong Kong, Shatin, Hong Kong)
Siu-Lun Wong (University of Hong Kong, Hong Kong, Hong Kong)

Journal of Entrepreneurship in Emerging Economies

ISSN: 2053-4604

Article publication date: 5 September 2016

509

Abstract

Purpose

The Li & Fung Group, a century-old, family-controlled multinational group of companies based in Hong Kong, seems to be an exception to the traditional perception of Chinese family business. The aim of this paper is to explore why this company can overcome the fatalism that “family business could not pass on over three generations”.

Design/methodology/approach

This paper will use in-depth case study as key methodology for exploring key research question of family business sustainability. Archival data, including company registration records, newspaper reports, biographical materials and company annual reports, etc., are major secondary data that will be used for qualitative analysis.

Findings

The important findings in this paper is that the authors can identify key ways for solving family conflict and business continuity. Through in-depth study, the authors argue that because Li & Fung can effectively adopt the “pruning the family tree” mechanism and “listing and de-listing” mechanism during critical stages of succession and development, it has flourished for over a century and is therefore a model for other Chinese family businesses to follow.

Research limitations/implications

Because the authors did not conduct personal interviews with the family members of the company, the authors do not have “insiders’ view” on the company development. Also, it is a century-old company, and many historical data cannot be obtained, so some of the developments would not be fully explained and understood.

Practical implications

It can let family business owners, staffs working in family business and professionals serving family business know better that although there are negative sides of family business, their positive sides should not be underestimated. If a proper mechanism can be rightly executed, its negative side could be large reduced, whereas its positive side could be better enhanced.

Social implications

This paper can offer insightful implication to the society that family business, in fact, is highly dynamic. It not only creates jobs by offering services and producing goods but stimulates economic development as family the fertile ground for breeding entrepreneurship.

Originality/value

There is no analysis in the academia in exploring the Li & Fung Group’s development from the perspective of leadership and ownership competition. So, the originality of this paper is very high.

Keywords

Acknowledgements

This work is part of the Chinese Family Business and Stock Market project and A Quest for Business Continuity and Sustainability project. The former is funded by the Chiang Ching-kuo Foundation (Project Ref. No. RG012-P-10), whereas the latter is supported by the Vincent and Lily Woo Foundation.

The authors are most grateful to their assistants – Miss Akira Zhang, Miss Viola Cheung, Miss Joan Chong and Mr Ha Yu-fung – for their great help in gathering research data, as well as preparing all the diagrams/figures.

Citation

Zheng, V. and Wong, S.-L. (2016), "Competing for leadership and ownership: the Li & Fung Group’s legendary and strategy", Journal of Entrepreneurship in Emerging Economies, Vol. 8 No. 3, pp. 304-320. https://doi.org/10.1108/JEEE-06-2015-0034

Publisher

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Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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