Incomplete contract theory and social contract theory, what is the expansion in the study of family business?

Modern enterprise theory has achieved great results by focusing on the internal structure of the enterprise, but in the analysis of the object of the continuation of the style of neoclassical economics, emphasizing the general sense of the "elemental analysis", which formed the assumption of homogeneity of the enterprise of the neoclassical economics. In fact, the traditional enterprise theory only answered the question of the nature of the enterprise, did not examine the internal organization of the enterprise and its activities. Theories of industrial organization developed on the basis of the analysis of the nature of the enterprise (such as the Harvard School's SCP analytical structure and Porter's theory of competition) continue this homogenization assumption. Against this background, traditional theories of the firm remain, in effect, appendages of price theory or market theory.?

In fact, the theory of the firm needs to explain not only why firms exist, but also why different intra-organizational specializations lead to different outputs. Compared with the mainstream economic theory with neoclassical economics as the core content, management research has a clear difference in the research perspective and analysis object. Modern business theory has inherited the theory of contract, but has analyzed the diversity and incompleteness of the contract more, especially in addition to the "owner" to emphasize the role of human capital. Specific control of the enterprise is defined as the control of property explicitly designated in the contract, and it is stated that the "authority" of the enterprise is physical capital, since human capital is destroyed when it leaves the enterprise and is thus dependent on physical capital.

So, although the mainstream theory has realized the incompleteness of capital ownership, its theoretical basis is still the logic of capital ownership. As a complement to the mainstream theory, a number of theories advocating a greater emphasis on non-capital factors have developed along with criticisms of the logic of capital ownership.

Summarizing the representative theories among them, they include: (1) theories of ****similar control, such as the human capital theory and the ****similar decision-making theory; (2) state dependence theories, such as the core competence theory and the key resource theory; (3) alternative theories, such as the stakeholder theory and the right of entry theory. The analysis of these theories involves multiple subjects inside and outside the organization of the enterprise, thus better promoting the empirical analysis of control and resource allocation in modern enterprises.?

For family business research, the process of critique-development that has taken place with mainstream theories is a task yet to be accomplished. The insufficient critique of the natural authority of capital (the entrepreneur and the family in a controlling position) in family business research, and the continuous exploration of it mainly at its periphery (e.g., the issue of institution-building and professional managers of the firm), is very similar to what has happened in the past in mainstream theory: both place their hopes of solving the problem of efficiency of firms on the complete contract at the firm level, ignoring the incompleteness of the contract caused by personality and socialization factors.

Some of the more recent literature based on reviews of economic theory has begun to take note of this problem and to pay attention to contractual incompleteness and relational governance in family firms, but such research is still very much lacking. Theories of the firm dominated by neoclassical contract theory have premised on the exclusion of family personification and socialized relationships from the contract of the firm, thereby ignoring the essential character of the family firm.