Abstract
In the family business literature, succession research has focused on the family member as they enter the leadership role or on the different issues that affect the succession process. Although researchers have acknowledged that succession in family businesses is “punctuated” by decision making events, less attention has been given to understanding how incumbents make decisions about ownership and management transitions. In an effort to continue to understand the succession process it is important to understand how incumbents make decisions about the type of transitions they intend to engage in (i.e., intra-family succession, out of family succession, or no succession). Building on the theory of planned behavior and the socioemotional wealth framework (SEW), this manuscript presents a conceptual framework to understand the factors that influence succession transitions and the role that contextual factors can play in this decision-making process. We present theory driven propositions and discuss the implications for understanding and evaluation of the succession process.
Highlights
Succession has been one of the main areas of interest for family business scholars and practitioners.The reason for this is that only a small percentage of family firms are able to survive the transition to the generation [1], and poor succession planning and management is often attributed as the main reason for this poor survival rate [2]
This assumption is inconsistent with empirical research that has found that the performance of family CEOs is affected by organizational size and concentration of ownership among family members such that firms with family CEOs perform better when the firm is smaller and the ownership is concentrated among family members [10]
This paper presents a model of the factors used in the process of determining succession intent
Summary
Succession has been one of the main areas of interest for family business scholars and practitioners.The reason for this is that only a small percentage of family firms are able to survive the transition to the generation [1], and poor succession planning and management is often attributed as the main reason for this poor survival rate [2]. Research on succession has tried to understand the range of factors that are related to successful succession, there is not much understanding of determining what succession strategy founder/owners decide to engage in and why [8] This gap in our understanding has affected the evaluation of what constitutes a successful succession and has promoted the assumption that in family firms exit strategies that have a non-family focus represent a failure for the family [9]. Royer and colleagues [5] suggest that before family firms begin the succession process they often analyze the costs and benefits of keeping the business in the family in comparison to finding other forms of succession (e.g., selling the business or having non-family management) These authors argue that in instances where intra-family succession becomes costly for the family business, owners will make different decisions of how to approach the succession process
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