Personalization of business relationships is not only inevitable but also immediate. Trust is rooted in guanxi; trust is central to the first component of Asian family firms. While hierarchical structures are the basis of these firms, who assumes the lower level positions is up for discussion. In other words, deciding who gets to do what or “what they deserve” is ultimately based on the level of trust and the form of relationship the superior has with their inferior. When the positions are finally delegated, it causes trouble among those involved. Interpersonal relationships exist with every member of the firm, and those who do not assume the position they sought after taking it as a betrayal, not from the perspective of boss and worker but that of father and son. Transgenerational intent is also affected by the personalization present within these family firms. These relationships defined future leaders and agreed-upon plans from those who came before them.

Paternalism plays a significant role in family firms, shaping organizational structures, decision-making processes, and interpersonal relationships. In the context of Asian family firms, the paternalistic position within the business is assumed by the head of the household, who is traditionally male. This centralized authority ensures stability and security within the family and company. Asian culture is explicit about the value of respect for their elders. As such, the family businesses will always begin and end with a hierarchal structure. Long-term orientation also contributes to paternalistic undertones within these family firms. With a hierarchy in place, the focus will always be on short-term success rather than the future. Often, leaders in non-family businesses are less focused on the quality of life for those who will succeed them and instead have very self-centered values. That being said, blood is always thicker than water. When your family is involved, you put them first and create a space where they can flourish. Paternalism, in combination with personalization, affects the treatment of employees. That's not to say it is always positive; it can frequently hurt the contributors. The pressure is abundant and leads to distress within the family. Finally, mentorship is a crucial aspect of paternalism. It creates a space of knowledge transmission from the older generation to the younger one, which ensures the continuation of the family's success.

In their simplest form, centralized authority structures culminate in personalization and paternalism. It is the organization of the “inner circle,” or “leaders,” and their roles in the business, including but not limited to concentration of power, challenges, and adaptability. The concentration of energy is the distribution of positions in the hierarchy, i.e., not just the paternal figure but the levels below. Many potential challenges that centralized authority poses. For example, succession risk is the idea that unqualified candidates will control the hereditary inheritance system. However, mentorship can potentially resolve this. Another concern is resistance to change. While transgenerational intent is used to reassure stability, outside factors such as westernization, sudden growth, or inherent generational differences can cause changes that offset the attempted balance. This centralized model allows for quick decision-making, leading to adaptability, which can be advantageous in business environments.