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Drawing from research conducted in Taiwan, Huang (1999) links the culture in Chinese business organisations to traditional Chinese cultural practices. Huang writes that Chinese organisations are noted for their informal organisational structures, strong top-down decision making processes and a high level of emphasis on personal ties and relationships. Huang notes that Chinese companies in Taiwan have, however, been slow in adopting business practices such as leadership succession planning. A possible reason for this may be found in the concept of ‘father leadership’ (Low, 2006) that is observed in many East and South East Asian companies.

In a corporate setting, father leadership is expressed through the leader’s commitment to look after the welfare of the staff members, much as a responsible father would in his own family. In return, the father leader would expect reciprocity in the form of commitment and loyalty to the firm and to himself as the leader of the company. Furthermore, in situations where father leadership is practised, the father-leader, is regarded as someone who is more knowledgeable and more experienced than the others in the company and should therefore be obeyed. Low (2006) argues that father leadership is common in many East and South East Asian countries such as Indonesia, Malaysia, Taiwan, Bangladesh and Singapore. He includes the Japanese practice of oyabun – Japanese for ‘supervisor’, although the word is also used to mean ‘the father’ or the

‘absolute father’ in a Yakuza clan (Hanada & Yoshikawa, 1991) – as an example of father leadership. Under such a leadership practice, employees are treated as part of the family where good relationships and informality are important (Adler, 2002; Sheh, 2001).

However, while employees are viewed as part of the family, there appears to be a distinction between the immediate family, that is, the family of the founder and leader of the company, and hired employees. Because of this, it is not surprising that succession to top positions is reserved only for members of the immediate family. Those who are not part of the leader’s immediate family would be expected to accept this as a reality of business practice and to continue to remain loyal to the company. This agrees with the notion of rukun (or the Malay concept of hierarchical order) and the Confucian teaching of everyone knowing their place, order, station in life and duty. Nevertheless, while high power distance might explain why employed staff might accept dynastic succession in family-controlled publicly listed companies, an intriguing question is whether their desire to maintain commonality and connectedness to their business ’family’ is strong enough to retain them in the company. This has not been addressed by Low.

Another aspect of father leadership which was not explored by Low (2006) is on how the family inheritance is parcelled out to the children. This would be of interest as there could be parallels in the distribution of the family inheritance and in leadership succession, as top leadership positions are often viewed as part of the family’s legacy. Zheng’s (2002)

work has shed some light on this issue. Zheng notes that a common approach to family-owned businesses is the assignment of important management positions only to family members, first to immediate family members and then, to extended family members. This supports Freedman’s earlier (1979) findings that in many families, especially in Chinese ones, power is normally passed on to the eldest son although Handler (1990) adds that favouritism has been observed to get in the way of this practice from time-to-time. As such, under father leadership, personal relationships outweigh qualification and performance and outsider professionals are unlikely to be asked to be part of this ‘inheritance’, that is to say, a place in the upper echelons.

An interesting feature of this approach to leadership succession is that the power to appoint is almost totally in the hands of the ‘father leader’. This is echoed in the words of Hong Kong billionaire Eric Hotung who stated ‘In my generation, a father’s wish was a command’ (Parry, 2005). Parry cites Phil Neilson, managing director of ING Financial Planning, who estimates that more than 50 percent of wealthy East and South East Asian families do not have any inheritance or succession planning in place because it is the father’s prerogative to decide who would receive what. The reasons suggested by Parry (2005) for the lack of such plans included the belief amongst Chinese families that talking about succession is akin to discussing the death of the father-leader, that there is an unwillingness to share personal information about personal wealth and that there is a belief that inheritance planning could lead to disruptions in running the family and the business. Such attitudes are often reflected in succession practices

in many East and South East Asian companies (‘The family connection’, 1996; Parry, 2005). Since CEO and top management positions are often viewed as positions to be inherited by family members, the father leader would have the final say on who would succeed him.

Yan and Sorenson (2006) support this likelihood when they investigated the impact of Confucianism on succession in Chinese family business. They argue that the tradition of submission to the father leader occurs because of the influence of five cultural dimensions on succession practices in Chinese family businesses. The first of these five elements is that the family is the basic unit of society, that is to say that the family is more important than any individual member and thus family values are to be maintained in high esteem at all times, even at the expense of individualism. The second, third and fourth elements have to do with relationships and appear in the form of parent-child relationships, relationships with other members of the family and social relationships respectively. The parent-child relationship is demonstrated by high levels of devotion, respect, duty and obedience to the parents while in the other two areas of relationships, respect for elders and adherence to hierarchy are mandated. These four elements call for the unquestioning subsuming of one’s interest to that of the father leader.

The final aspect has to do with the inheritance of family property. While older and younger brothers are not equal in status, coparcenary is espoused in Confucian teaching and the family equally divides or shares the inheritance among all male siblings (Chau, 1991). A rationale for this

is that this would then ensure that all family members will work together for the greater, and continued, good of the family (Yeung & Tung, 1996). However, as companies can only have one leader at a time, coparcenary will give way to the practice of allowing the eldest – and traditionally it would be the eldest son – the right to take over the helm of the company. Since the family and preservation of family values and reputation are of utmost importance, it is not surprising that succession will be dynastic as family members will be trusted more than outsiders to safeguard and build the family fortunes.

In summary, although the literature does not specifically discuss succession practice in Malaysia for those of Malay and Chinese ethnicities, the works of the researchers reviewed suggest that leadership succession in Malaysia would be characterised by dynastic succession in family- owned and family-controlled publicly listed companies and that the actual process of top management succession would be relatively unclear as it is the sole prerogative of the father-leader. Furthermore, challenges to succession decisions made by the leader would be unlikely and unwelcomed as they would be deemed to be an infringement on the preservation of social harmony and hierarchy. Indeed, any dispute of the decision would be taken as an affront that not only disrupts the social hierarchy but which could damage the face or reputation of all involved, and this was to be avoided.

Having considered the cultural context of Malaysia, attention is turned to issues pertaining to corporate structures and governance in Malaysia as even here, cultural effects can be observed.

Corporate structures and governance in Malaysian