Asia Pacific Journal of Management

, Volume 30, Issue 3, pp 749–767 | Cite as

Incubating the next generation to venture: The case of a family business in Hong Kong

  • Kevin AuEmail author
  • Flora F. T. Chiang
  • Thomas A. Birtch
  • Zhujun Ding


Many Chinese family businesses face the dilemma of building good operating and governance structures and systems while fostering an entrepreneurial spirit across generations. In this study, we explored trans-generational entrepreneurship in Automatic Manufacturing Ltd. (AML), a Hong Kong SME, to shed light on this problem. The first generation founded the company and chose a unique development path that emphasized quality, innovation, and learning before grooming a cadre of professional managers. To continue the family entrepreneurial spirit, AML used the “familiness” resources embodied within the family and its business to incubate the second generation. To test the wings of the second generation as entrepreneurs and then lure them back to AML to take over the responsibilities of the first generation, a unique succession plan nurturing spin-offs by the second generation was developed and implemented. Such a systematic approach, although still under experimentation, has the potential to become best practice for other family businesses. The implications of this approach for research in portfolio entrepreneurship and open innovation are also discussed.


Family business Trans-generational entrepreneurship Angel investment 



This paper is based on a case studied under the Successful Trans-Generational Entrepreneurship Project (STEP) and presented at the Asia Pacific STEP Family Summit in Hong Kong, 2008 (see Au, Craig, & Ramachandran, 2011). It was also presented at the Asia Pacific Journal of Management Special Issue Conference at Renmin University of China, Beijing, 2011. The project was partially supported by a research grant of the Hong Kong UGC awarded to the first author (CUHK 440008). We thank Mike Peng (Consulting Editor) and Yuan Lu (Guest Editor) for helpful comments.


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Copyright information

© Springer Science+Business Media New York 2012

Authors and Affiliations

  • Kevin Au
    • 1
    Email author
  • Flora F. T. Chiang
    • 2
  • Thomas A. Birtch
    • 3
  • Zhujun Ding
    • 4
  1. 1.Department of Management and Centre for EntrepreneurshipThe Chinese University of Hong KongHong KongPeople’s Republic of China
  2. 2.Department of ManagementHong Kong Baptist UniversityHong KongPeople’s Republic of China
  3. 3.Centre for Industry and GovernmentUniversity of CambridgeCambridgeUK
  4. 4.Department of ManagementThe Chinese University of Hong KongHong KongPeople’s Republic of China

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