The influence of family relationships in the succession (original) (raw)
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In this study, owner-manager-related factors that can influence the succession process in small and medium-sized family businesses are empirically investigated. The study was conducted among 2,458 owner-managers and successors in 1,038 family businesses identified via a snowball sampling technique. A total of 332 usable questionnaires was returned. The dependent variable in this study, namely the 'perceived success of the succession process', is measured by two underlying dimensions, namely the 'satisfaction with the process' and 'continued profitability of the business'. The empirical results indicate that the owner-manager-related factors that influence 'satisfaction with the process' are the 'relationship between the owner-manager and successor', the 'owner-manager's trust in the successor's abilities and intentions' and 'family harmony'. The 'continued profitability of the business' is influenced by the 'relationship between the successor and owner-manager' and the 'trust that the owner-manager has in his or her successor's abilities and intentions'. The willingness of the owner-manager to hand over the business is in turn influenced by the extent to which he or she has 'interests outside of the context of the family business' and has 'trust in the successor's abilities and intentions'. The extent to which there is 'harmony among the family members' will influence the 'relationship between the owner-manager and successor'. Based on these findings, recommendations for successful successions are offered.
Family business Succession Successor Readiness Management Family businesses contribute more than 50% of Gross Domestic Product in global economy, though, only 13 percent of family businesses survive through third generation. Family business succession is a key to reduce the failure rate and leads to sustainable business. Recent literatures have identi ied many factors that lead to successful succession in family business. Nevertheless, there were few researches that focused on the successors' perspectives. This paper aimed to 1) study the factors of family business successor readiness and 2) investigate the obstacles that are mostly found during the succession process and factors that lead to successful succession in family business from successors' perspectives. Based on qualitative research, the study was undertaken in Thailand among eight family business successors who ran medium to large-size family businesses. They already had a successful transition in their family businesses. The participants were selected by purposive sampling technique; including family business successors from pharmaceutical industry, tea industry, packaging industry, energy industry, food processing industry, and shoe industry. The indings revealed that there were nine factors that contribute to the successor's readiness: 1) working experience in family company, 2) working experience in other company, 3) industry speci ic knowledge, 4) reward or cash compensation, 5) personal interests or needs, 6) commitment to the company, 7) relationship among family members, 8) family harmony, and 9) trust in successor's ability. By addressing these nine factors appropriately from both the predecessors and successors, the family business will ensure its continuity into the future.
Succession in family business: multi-source perspectives Article information
Purpose: Despite the extensive breadth of research into the critical challenge of succession in family business, generational succession in family business has been investigated from predominately one-dimensional perspective. This study responds to call for a multi-perspectives examination of leadership succession in order to embrace the dynamic and complex nature of succession in a family-business. Accordingly, we investigated the key personal and professional factors associated with effective family-business succession across four key stakeholders: incumbent, successor, family, and nonfamily members. Design/methodology/approach: The explanatory research design included 16 interviews in Phase 1 and 41 Prospective Case Study interviews in Phase 2, both with Australian family businesses that had or were about to experience generational transition. Findings: Incumbents and successor interview findings support the benefits of maintaining a cohesive family business, adaptable family culture and familiness for effective succession. We also identified several personal components (e.g., family-business socialization and external experiences) that can help determine the commitment of successors and how this commitment can change once they assume a leadership position. Business size was the professional component supported by incumbent, successor and nonfamily members as having a significant impact on succession process. As a family business grows and becomes more highly complex, a clearly defined set of procedures becomes imperative. Practical implications: Family-business practitioners can apply our findings to manage the processes and expectations of family and the business to achieve effective generational succession and thereby increase the sustainability of the business. Originality/value: This research provides a coherent and comprehensive understanding of the interdependencies of competing priorities in the complex succession process that is essential for family business sustainability and performance.
Succession Planning and Strategies in Family Business: A Multiple Case Study
International Journal of Entrepreneurship, 2021
Family businesses represent a significant percentage of GDP and employability in developed economies, and their continuity and transition to a new generation is a crucial challenge. This study aims to analyse the nature of succession processes in small and medium-sized family business, exploring critical skills and succession strategies. A qualitative methodology was adopted through the formation of a focus group with eight senior and junior members of family business from different sectors of activity. The results show that family businesses have characteristics that distinguish them from other companies, presenting experiences and obstacles that can put its continuity in cause, particularly the succession. Furthermore, these businesses generally adopt a long-term perspective, with family-centred decision-making and greater stability while the founder is the leader. This research contributes to extending knowledge about family business, especially the problems arising and experienced in succession processes from the first to the second generation.
Family Businesses Management and Succession: A Meta-Analysis
American Journal of Operations Management and Information Systems, 2020
Purpose: This paper assesses how management and succession is handled in family businesses. In addition, the research seeks to find out how to manage the business succession in the family business during the transitional period of the case company. Furthermore, the objective of my research is to provide guidelines for implementing family business succession strategy. Approach: Study was a meta-analytical literature review based on the analytical and descriptive research designs used. Findings: This paper found that rewards of a family-owned business are many as are the challenges. The findings of this research indicate that family businesses are unique and they have several common characteristics that differentiate them from other businesses. This uniqueness also causes the special challenges and opportunities, which family businesses face in their operations. The most significant characteristic that separates family businesses from non-family businesses is the family's impact on the business and ownership. The unique family business characteristics, challenges and opportunities stated in the theoretical framework can be applied to the family businesses used in this research. It can be stated that both of the case companies fit the concept of a typical family business, which is unique compared to other businesses. Limitations: the design and process of sieving articles for critical review is time consuming and involves voluminous data analysis. Conclusion: Family businesses try to intersect the distinctions between family issues and business matters. This needs to be handled with utmost care as it spells the difference between success and failure. The outcomes of this research pointed out that there are mainly two obstacles concerning the family business i.e. The company does not have a proper successor, the family governance issues have an impact on the family business succession. In other words, the family governance issues which are aspects of the poor management mode and feudal family culture. Originality: There is a paucity of recent research in this area and this paper makes a contribution towards filling this gap.
Succession Planning and Generational Transition: The Greatest Challenges for Family-owned Businesses
Journal of Eastern Europe Research in Business & Economics, 2012
The purpose of the article is to describe problems connected with succession and generational transition in family-owned businesses. The author examines how family-owned businesses can be characterized along with the general position of family companies in the economy. The strengths of the article are that the author completes theoretical findings with real examples of family-owned businesses and case studies. He also makes use of the latest findings of a dissertation thesis focused on succession problems in small and medium-sized family enterprises. The solving of the question of succession in family businesses has been identified as the greatest problem and a proposal for solving this dilemma is analysed in detail in the article. The solving of the problem of succession is an interdisciplinary theme on the border between management and sociology. Family companies share numerous problems with non-family companies; however, family businesses differ from other kinds of businesses in that they have to come to terms with a generational transition in the leadership of the family business.
A Conceptual Framework of Family Business Succession: Bane of Family Business Continuity
Despite the abundant studies that exist on succession in family business there are still many evidence of family business failures, this is due to the fact that the issue of succession and how it affect family business continuity is still yet to be addressed. Hence, studies on how succession leads to family business continuity are very limited and scarce. Therefore, this study explores and examines succession in relation to family business continuity. This study proposes an integrative conceptual model on how true succession could ensure family business continuity.
Family Business Succession Planning: Unleashing the Key Factors of Business Performance
Asian Academy of Management Journal, 2015
Family business studies are becoming more pervasive in Malaysia, and several studies have focused on factors that shape family-owned business performance levels. Succession planning issues, and specifically the succession issues and experiences of second or third generation family business owners (2GO/3GO), have not yet been explored at length. This study aims to revisit various factors that shape family firm performance by examining succession issues and transition experiences encountered by successors. Data were drawn from self-administered surveys completed by 55 2GOs and 3GOs. Descriptive, correlation and regression analyses were conducted to interpret our findings. The findings show that management styles, relationships between family members, values and beliefs and successor training significantly influence family business performance levels. The relationship between antecedents and business performance is found to be partly mediated by succession issues and fully mediated by ...
Integrating Succession Planning for Family Business Continuity: A Conceptual Analysis
2020
The economic importance of family business - wealth creation, employment generation, locally rooted and strong connection to their communities cannot be over emphasized; besides being widely acknowledged as major proportion of most small and medium enterprises in the global economy. However, pertinent to most family businesses is the desire to maintain family leadership of the company by appointing as top executive from family members one who has qualification and significant experience with the company. Family businesses can only position themselves for this and other future expansion by investing in robust managerial development through early involvement of family members and adapting succession planning best practices. This study seeks to advance knowledge on succession planning and managing family businesses by shedding light on the inter-link between them. The study further explained why, despite robust efforts of founder’s investment and commitment, majority of family business...