In addition, these family businesses often treat employees like family, making their corporate culture friendly and a motivating force for employees, Cui says. He cites the example of a human resources manager who, after joining Zara, harshly criticized a shop assistant. She received a call from one of Zara's top management figures, saying that such behavior is unacceptable and every single employee should be treated as one of the family.

"Right now the European family businesses' mentality is similar to that of the first-generation Chinese family business, because they play things safe, but their children's mentality is closer to the American businessmen who embrace risks."

Cui says IE Business School has joined with Cheung Kong Graduate School of Business in China to provide lessons on succession planning for many experienced first-generation family business owners. However, students have found the difference in thinking frustrating.

"The challenge is great, because many first-generation Chinese business owners are losing their insight on China's rapidly evolving economy, where traditional manufacturing firms are losing their advantage, but their children's skills are lagging behind and they are not strong enough to take over the business."

In contrast, many Spanish family businesses are able to make a smooth transition between the generations because their children have been heavily influenced by their parents' way of thinking, so they also seek to maintain those advantages while developing newer solutions by themselves.

Despite the significant market potential of recruiting Chinese family business clients, many European advisers are encountering challenges. One is that their Chinese clients do not always trust strangers with the most intimate details of their businesses. Also, the European advisers do not always realize the extent of their clients' needs.

Another problem was encountered by the 88 Initiative, a project started in 2013 with the aim of pairing Chinese students and their parents' capital with UK high-growth companies.

The project was started by Paul Judge, Richard Heygate and Rob Wylie, three well-known figures in Britain's venture capital industry, who saw young Chinese students at UK universities as a good point of access for a lot of Chinese private sector capital that could potentially be invested overseas.

The 88 Initiative essentially works as a networking group and a consultancy. The intention was for the Chinese family businesses to invest in the companies under the UK Tier 1 entrepreneur scheme, with their children working at the companies as a part of the management team, learning lessons that could be used later to help their family business internationalize. When their parents saw the value of the companies they were working at, they would invest further in the UK firms.

But the project has not worked so well because the Chinese students are too young and inexperienced to contribute much to the UK firms, which are unwilling to make them directors as required by the entrepreneur scheme.

Looking back, Heygate says, he has changed his mind about the business model. "Traditional Chinese family businesses will stick to the game they know, and are unlikely to let their kids take over - hence China needs to go with the highly successful new game it has created."

Lu, who is also a director at 88 Initiative, adds that because the older-generation owners of family businesses have a mindset of retaining too much control in the decision-making process in overseas deals, as opposed to allowing their children to be in charge, such deals are difficult.

"They often do not quite understand the overseas market, so they are afraid of taking risks, and often it is difficult for their children to persuade them."

The problem is acute in relation to technology in particular. Because a lot of Western market technology is complex and highly innovative, it is difficult for the older generation to judge its value, Lu says.

"This also creates frustration on the British partners' side. They may have a very good conversation with the Chinese CEO's sons and daughters, in the end only to realize the parents have not given approval so the deal falls apart."

She says this challenge is common among Chinese family businesses because their current owners are mostly first-generation Chinese entrepreneurs who have created and grown the businesses themselves, hence their pride and confidence in their own abilities.

This mentality is different from many Western family businesses that have been passed down through generations, in which each generation tries to delegate increasing power to the next generation as a part of their succession planning, she says.

That is why many European educators are creating classes to help China's first-generation entrepreneurs become more flexible. The 88 Initiative teamed up with the University of Cambridge to provide a training program in September for Chinese family businesses called an "innovation master class".

"Chinese family businesses face a lot of challenges, but the opportunity and value we can provide for them by working together is very big, and we hope to start with educating them and helping them to build the right attitude and mindset to take their family businesses," Lu says.

cecily.liu@chinadaily.com.cn