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| The Specific Mechanism, Driving Logic and Suitable Environment of Contractual Governance and Relational Governance——A Case Study of Inter-Generational Change of Governance Models in Family Enterprise |
| WU Jiong，HU Yuheng |
| Donghua University, Shanghai, China |
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Abstract Based on the governance practices of two-family enterprises that underwent sudden inter-generational succession, this study adopts a cross-case study approach to explore the governance model ’s specific mechanism, driving logic, and suitable environment. The study shows that, contractual governance includes supervision mechanism, incentive mechanism, and balance mechanism; trust mechanism, authority mechanism, and mental model mechanism constitute relational governance. The driving logic of contractual governance and relational governance are studied at the levels of systemic order and goal criteria, respectively. Specifically, contractual governance is driven by individual orientation and conflict resolution, while relational governance is nurtured by collective orientation and conflict avoidance. Besides, individual motivation, legitimacy environment, and family concept jointly affect the choice of family business governance model.
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Received: 24 January 2022
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