The past 30 years have seen a remarkable change in the economic and social structure of the Republic of China on Taiwan. Fueled by a combination of factors, the nation has rapidly evolved from an agricultural society into a thriving, cosmopolitan commercial-industrial society. During this period several important businesses have developed. Founded by diligent, determined men, these business enterprises have grown into prominent national corporations.

An ancient Chinese proverb says, "A tiger never has a dog for a cub." This is a metaphor for the idea that talent begets talent. Traditional business practice holds that a father should pass his work on to his sons, especially the eldest. Despite modern business modes, some traditions die hard. Presently there are several successful examples of father-son business enterprises.

Examination of the current business arena on Taiwan reveals family businesses can be divided into the following groups: 1. sons who inherit and continue the family business, 2. sons who build the business in new areas of development, and 3. sons who use the father's investment to build their own thriving businesses.

Currently the Republic of China's number one company in terms of export sales, Far Eastern Textiles represents a company where the son has assumed the father's role of running the business. Despite the past few years of international economic recession, Far Eastern Textiles has continued to prosper, with annual sales figures constantly increasing. Projections for this fiscal year indicate export earnings could top US$25 million.

Hsu Hsu-tung, current president and son of the founder and current chairman, Hsu Yu-hsiang offers some insight into running a family business. Acknowledging the many accomplishments of the company, he also adds he is personally not 100% satisfied. The company was founded and prospered before him and as it grows, new management problems arise. There are differences in the generations, in their concepts of managing the company's affairs. The senior generation tend to be more emotional, while the second generation have been educated in business policies and as such tend to be more system oriented. His father however was the original founder and he remembers the hard work and loyalty of the first generation of company employees.

I Mei Foods Company, Limited, is the Republic of China's largest food products company. A 50 year tradition of quality has earned I Mei the confidence of the buying public. Kao T'ung-chiao, chairman of the company started the business with the production of milk candy. His initial philosophy was, always use the finest of ingredients. "A customer will know after the first bite if he will buy the product again," he says. Early marketing strategy was to keep goods priced low and base profit on large-volume sales.

This conservative philosophy guided the company on a steady course until 1971. At that time increased prosperity had helped launch a number of competing food products companies. Consumers, attracted by competitors advertising campaigns and willing to try new products began buying these products. Coincidently, Kao Chih-sheng took over in the role of acting company president from his father. Full of fresh ideas, the junior Kao stressed that the company, while always hard working, had to lift its head and look around. New strategies had to be adopted. Switching the focus to sales, Kao increased advertising, and expanded the distribution of products. I Mei expanded its four store outlets to 17 and also began to market products through wholesalers. Improvement in packaging, research and production of new products like chocolate are just some of the steps taken by the younger Kao. Realizing the limitations of the domestic market, I Mei has embarked on a campaign to secure a foothold on the export market.

While Kao and his father sometimes disagree on certain policies, like the younger wishing to raise the price of products, they have a harmonious working relationship.

Hei Sung Corporation, the soft drink manufacturing company has a long tradition of excellence in the Republic of China. Under the guidance of the Chang brothers the company has in its 60 years of history grown to the point where it now accounts for 50% of sales on the soft drink market.

Vice-president, Chang T'ao-chu, whose father is the chairman, reveals that Hei Sung relies on its reputation as the established leader in soft drinks to advance new marketing strategies. Since the brand name, Hei Sung is associated with its two leading products, Hei Sung, a 7-Up like drink and Sha Shih, a root beer type, new innovations are marketed under different brand names. Two successful examples are Cherico and Oasis fruit juices. Cherico is Hei Sung's entry in the youth-oriented fruit-flavored soda pop market, while Oasis has become successful on the fruit juice market. Advertising aimed at the youth market is also another marketing strategy.

During this year's Golden Bell Awards for Radio Broadcasting, the award for outstanding radio play went to the Taiwan Broadcasting Company, Limited. This was the first time a privately owned broadcasting company had earned such a distinction. The company also collected five other nominations, another first for a private company. Ma Chang-sheng, president of the company his father founded has adhered to a policy of upgrading the quality of radio programming.

After receiving an MA degree in agricultural journalism from the University of Wisconsin in 1979, Ma returned to Taiwan to assume a post in his father's corporation. Responsible for programming on the company's five stations, he has pursued a policy of airing programs with more intellectual content. While audience response has been slow to come around, Ma is not worried. Fortunately his father's sound management policies have given him the freedom to experiment and air these quality programs.

Li Chih-jen, whose father opened the Sheng Ta Chuang writing brush and ink factory, is an excellent case of a son who expanded his father's business into other areas. Today the family business has a factory and store, a writing brush and ink export business, an art gallery and classes in calligraphy and painting.

Exposed to calligraphy as a child, Li studied with a famous teacher while in university. He learned a great deal about writing brushes and the difference the hairs made. Realizing that an individual writing brush could have a remarkable difference on the different individual using it, he began an intensive program of analyzing brush structure. Hair types were studied for their flexibility, softness and absorption properties. Formulating definite ideas about different brushes, Li also studied the calligraphy of different artists, to determine the brush type they used. Li also came to the realization that Taiwan did not really manufacture any writing brushes for experts.

To help launch this new move into the expert brush market, his company employed some clever marketing strategies. Classes were held to demonstrate the brush and artists were given brushes to use and hopefully comment on. The strategy worked and today the company is one of the established leaders in this field of manufacturing.

The Kao Sha Textile company has also made a significant contribution to the expansion and development of the arts on Taiwan. Last year the company opened the Chin Shih Bookstore which proved so successful that an island-wide network of stores is planned.

Chou Cheng-kang, son of the founder combines a keen business acumen with an interest in the arts. After graduation from university he went to work for Taiwan Plastics Corporation for three years. Learning a great deal about the internal organization of a business, he then went to work for his father. The company, which produces denim, velveteen, corduroy and other materials has grown considerably under his able leadership.

Bringing his eye for efficiency into the bookstore business, he asked the advice of experts to help in the final design. Laid out like a department store, the brightly lit, spacious and convenient store earned back its initial investment costs in its first year. Innovations like an in-store computer to help trace and order books has helped to win the store an outstanding reputation. This past May branch stores were opened and plans call for an island wide network, with the first store in Kaohsiung.

Fifty-three year old Huang Shih-hui is a special case among the select group of father-son businesses. A graduate of the University of Washington Medical school, Huang spent over 20 years abroad teaching in Japan and the United States. His father, founder and chairman of Sanyang died suddenly, bequeathing the family business to his eldest son, Dr. Huang.

The problems of adjusting to his new role have been great indeed. Huang having been educated in Japanese and English could not speak Mandarin Chinese. After two years of study, he was able to comprehend enough to begin making business decisions.

Despite his relative inexperience, Huang has shown some flair for management decision making. He has led the company into the field of high technology with the establishment of an investment corporation, Ch'ing Feng. This consortium has made recent purchases of American technology firms as well as establishing some of their own.

The James Enterprise Company, under the leadership of Huang Wei-chu is an example of a son using his father's financial backing to build a company of his own. During the building boom of the late 1960's, the young Huang, a former employee at China Airlines, invested in the development of a kiln-fired floor tile business. To ensure that he learned the business thoroughly, he went to Italy to study the latest techniques and seek the advice of experts. Under his able leadership, this company is now exporting tile.

Cal-Comp Electronics Incorporated was founded in 1973. Six years later it was the world's third largest manufacturer of calculators. Last year this young company began a joint venture with Qume of the United States in the manufacture of computer terminals. The company now ranks second domestically in terminal manufacturing.

In his five years as director of the company, Hsu Sheng-hsiung, a graduate of the National Normal University has stressed a policy of using technology to lead the way. His father, Hsu Ch'ao-ying provides the backing and serves as company chairman. He also has the technical expertise of six friends with engineering and science backgrounds. Hsu feels a growing company needs to hold on to its talent and so he has thought of stepping down from his post to give some of the company's talent a chance to show their abilities.

These nine examples of family businesses display a successful union of traditional Chinese custom with the latest in the world of corporate business practice. A tribute to the men who founded them and the sons who now guide them, these companies represent the new commercial age in the Republic of China.

(Gerald Hatherly)

[Picture Caption]

1. President of Far Eastern Textiles, Hsu Hsu-tung feels that in inheriting the reins of control it is difficult to get a complete sense of accomplishment like that of the founding generation. 2. Kao Chih-shang, president of I Mei Foods has directed marketing of products from the company's outlet stores to wholesalers. 3. Chang Tao-chu represents the spirit of the second generation at Hei Sung Corporation, Taiwan's leading soft drink manufacturer.

1. Ma Chang-sheng, president of Taiwan Broadcasting Company, Limited discusses program production with a company employee. 2. Li Chih-jen, president of Sheng Ta Chuang, not only understands the finer points of calligraphy, he is also skilled at the making of writing brushes. 3. A sample selection of Sheng Ta Chuang's prized product, the Chinese writing brush.

1. Realizing the future potential of cultural products, Chou Cheng-kang, president of the Kao Sha Textile Company invested in the construction of the Chin Shih Bookstore. 2. The Chin Shih Bookstore offers an extensive selection of books in a spacious, well-lit store environment.

1. Dr. Huang Shih-hui, president of Sanyang is one of the first island businessmen to invest in high technology industries in the United States. 2. Huang Wei-chu, president of the James Enterprise Company stresses that the president should act as a role model for all company employees. 3. Hsu Sheng-hsiung, president of Cal-Comp Electronics Incorporated discusses business with a company employee.

3. Chang Tao-chu represents the spirit of the second generation at Hei Sung Corporation, Taiwan's leading soft drink manufacturer.

1. Ma Chang-sheng, president of Taiwan Broadcasting Company, Limited discusses program production with a company employee.

2. Li Chih-jen, president of Sheng Ta Chuang, not only understands the finer points of calligraphy, he is also skilled at the making of writing brushes.

3. A sample selection of Sheng Ta Chuang's prized product, the Chinese writing brush.

1. Realizing the future potential of cultural products, Chou Cheng-kang, president of the Kao Sha Textile Company invested in the construction of the Chin Shih Bookstore.

2. The Chin Shih Bookstore offers an extensive selection of books in a spacious, well-lit store environment.

1. Dr. Huang Shih-hui, president of Sanyang is one of the first island businessmen to invest in high technology industries in the United States.

2. Huang Wei-chu, president of the James Enterprise Company stresses that the president should act as a role model for all company employees.

3. Hsu Sheng-hsiung, president of Cal-Comp Electronics Incorporated discusses business with a company employee.