Risk of agency by agreement leads a non-cooperation between the owner and professional manager of family firms in China. Both sides＇ interests will be harmed under this condition. More than that, management level and development of the family company will be blocked too. To avoid this situation occur and control the risk effectively, the family firms should make a rational mechanism to encourage and restrict the professional managers, making their anticipative income to be biggest under the case of working hard for the owner and being honest. ...
