Doing Business in Southeast Asia and Southern China-Booms and Busts of the Eu Yan Sang Business Conglomerates, 1876-1941.

This chapter provides an alternative look at how the Eu Van Sang firm (EYS) has survived and remains an active transnational company in Southern China and Southeast Asia after 120 years. Elsewhere in this volume, Henry Yeung argues that the reason why EYS is able to operate as a family business in its fourth generation is its ability to incorporate professional managers to transform itself into a corporatized business. This made it possible for the enterprise to break through the organizational restrictions normally inherent in traditional Chinese family business. The present chapter however focuses on how the company coped with the political and economic changes in the market between 1876 and 1941. It aims to demonstrate that the Eu family's skills in 'lateral and vertical diversification' and 'conglomerate integration' in business investment contributed much to restoring the necessary liquidity in their business, particularly in times of need. The Eus' portfolio of tax farming, tin mining, rubber plantations, banking, and remittance and real-estate activities in different parts of Southern China and Southeast Asia provided a safety net for the family business. Their diversification in regional and sectoral investments was the most significant strategy responsible for helping them to survive economic crises. Such diversifications subsequently enabled the Eu's family business to reduce the risk of over-reliance on economic privileges granted by particular political regimes.