Influence of Successors’ Socio-demographic Characteristics on Performance of Family-Owned Small and Medium Enterprises in Tanzania

Abstract

This study examined the influence of successors’ socio-demographic characteristics on the performance of family-owned Small and Medium Enterprises. Probability sampling technique was employed to obtain sample of 219 successors. The hierarchical regression model and independent samples t-test were employed to test the study hypotheses. The findings of this study indicate that successors’ socio-demographic characteristics, that is, education and business experience have influence on performance of family-owned Small and Medium Enterprises and there is no statistical difference in performance in terms of profit between male and female successors. It was concluded that for performance of family-owned SMEs successor’s sex should not be a factor for consideration in selecting a successor in family-owned SMEs. For good performance of family business, successors’ socio-demographic characteristics mainly education and business experience should be given priority in succession plan. The paper recommends that, to reduce the reported high failure rate, family business founders should strengthen their successors’ socio-demographic characteristics, mainly education and business experience instead of building on sex as the only criteria for successors’ selection.