Factors Affecting the Succesion Process of the Family Business in East Java, Indonesia

Abstract

The purpose of this research is to analyze the factors affecting the succession process in the family business in East Java, Indonesia. The variables used in this research are succession planning (X1), preparation of heirs (X2), relationships among family members (X3) as independent variables while succession process (Y) and post transition business performance (Z) act as dependent variables. Questionnaires are used to collect the study data. Additionally, quantitative analysis with path analysis is used as analysis tool. The population in this study is medium and large scale family business in Surabaya, Sidoarjo, Mojokerto, Pasuruan, dan Gresik. Samples are taken from 43 family businesses with total employment of minimum 20 and have performed at least one generational transition. The statistic analysis findings reflect the non-significant relationship between succession planning and preparation of heirs towards successful transition. While relationships among family members gives the most significant influence on the successful transition, as well as the significant influence between succession process to the post transition performance.