The study of family business growth—Base on the viewpoint of trust game between family business and professional managers

Abstract

Particularism-based clan trust restricts family business growth in China. The result of trust game is that as long as the additional revenue x obtained by disloyal professional manager is less than 1/i of revenue b by loyal, cooperation between the family business and professional manager can be achieved, and trust can be established. By extension, if a society has perfect legal system, code of ethics and value system, universalism-based society trust can be built step by step. The society trust creates out society capital which is one kind of dynamic and self-growing capital. Society capital can become the permanent motive power of family business growth.