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.
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Notes
- 1.
They are affiliated with the Department of Sociology, Tung Hai University (Taichung, Taiwan) and their works are mostly written in Chinese.
- 2.
The figure is one out of twenty in 2006 (see Yu et al. 2006).
- 3.
For a detail discussion of factors incubating entrepreneurs in Taiwan, see Chap. 1.
- 4.
Kirzner (1973) equates entrepreneurship with a middleman.
- 5.
As noted by Greenhalgh (1995), in most of the societies that have been studied, family entrepreneurship has declined in importance as industrialization has proceeded. However, this is not the case in Taiwan.
- 6.
In this chapter, the two terms “laoban liang” and “toujia liang” are used interchangeably.
- 7.
For a survey on the jobs involved by a working woman in Taiwan, see Lu (2001, pp. 263–297).
- 8.
In Taiwan, around 75–80% of small business finances are controlled by toujia liang.
- 9.
However a toujia liang seldom involves in business meeting or liaison external activities (Kao 1999, pp. 5, 35, 105). These jobs belong to her husband-laoban.
- 10.
In Taiwan, such activities are important in building up good customer relationship (quanxi).
- 11.
Of course, conflict between Toujia Liang and her staffs is always possible. On the one hand, having worked with laoban for many years, many team members behave like brothers with laoban. On the other hand, males in the Taiwan society regards toujia Liang as “more calculating” and “more picky on little things”. Given such a possible bias, senior workers may not be willing to be directly supervised by toujia liang and hence conflict may occur. In this situation, laoban often acts as an moderator. Alternatively, in some factories, laoban simply instructs his wife not to openly handle workers’ problems in the factory. If anything wrong related to staff members occurs, all she needs to do is to inform her husband-laoban who can tackle the issue or settle the disputes on his own (Kao 1999, pp. 116–117). Hence, laoban too acts as a shock absorber from both sides.
- 12.
The term is not only confined to business fields in Chinese society. It can also be applied to political party. For example, in mainland China, when we talk about Hu Jintao’s bandi, we refer to the team members whom Hu trusts most.
- 13.
Chen (2007) uses the term emotional solidarity.
- 14.
In Chinese culture, a family member is also referred to as “one of us”. See Chen (1993, p. 64) for the Chinese term.
- 15.
In Chinese, this kind of cognitive relationship is termed “mo-chi”. Chen (2007) refers “mo-chi” as tacit consensus. In English, it is similar to “can read each other mind” or “we were on the same wavelength” or “unspoken consensus”. With mo chi, people do not need to speak out, they think the same.
- 16.
In Weber’s (1947/1964) term, it is a process of typification.
- 17.
Schutz (1970, pp. 80–81) argues that the world of knowledge is incoherent, only partially clear and not free from contradiction.
- 18.
This is the concept of organisational culture in management literature.
- 19.
It follows that a family firm exhibits the most common environment because its members have socialised together and shared the same culture (Yu 1999).
- 20.
I thank the anonymous referee of Journal of Small Businesses and Entrepreneurship for raising this important question.
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Yu, FL.T. (2012). Towards a Structural Model of a Small Family Business in Taiwan. In: Entrepreneurship and Taiwan's Economic Dynamics. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-28264-5_2
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