Aokang: Where Do We Go From Here? Harvard Case Solution & Analysis

IMD-3-2073 © 2009
Xin, Katherine; Schwass, Joachim; Teng, Bingsheng; Zhang, Lily

Aokang was one of China’s largest shoe makers. In the early period, it turned out to be a typical family-run business, with lots of the firm’s high level places held by relatives. After two important adjustments, Aokang became a firm primarily run by professionals. But Wang Zhentao, the creator of the business had firm control over the organization and owned 100% of Aokang.

Aokang required a substantial injection of capital for additional increase. Would Wang be willing to take the dilution of shares thus losing some control of the organization? Learning aims: To deliver insights into the privately and family run organizations in China which develop from an entrepreneurial to a more professionally decisive company. The engagement of several family members in the business creates complexities which can be addressed through the sidelining of some family members or the creation of effective multi-level governance structures.

Subjects: Family business; Entrepreneurship; Succession; Partnership; Business strategy; Ownership strategy; Governance; Family relationship
Settings: China; Shoe manufacturing; 2007 sales revenues RMB 4 billion; about 20,000 employees; 30 subsidiaries; 3,000 retail outlets;1997-2008

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