Navigating business succession in family-owned enterprises: An activity systems and business networks perspective

Abstract

Family business success has become a focus for researchers over the recent years. Studies have proven that only 30% of family businesses endure beyond an initial generation. This research was aimed at investigating the factors that impact the success of family businesses. Specifically, the research examined the internal dynamics that impact the success of family business using the Activity System paradigm. Also, the study examined the external factors such as business networks and connections on the success of family businesses. The study finally finds out the strategies implemented by family businesses to overcome obstacles and challenges in the course of their succession. The findings indicate that there is a high correlation between internal dynamics and the success of family businesses. Also, the results indicate that family business thrive external aspects including connections and networks. The major obstacles to success of family businesses identified by the study include family wrangles and failure to identify successors in time. The study recommends early identification of successors to avoid family wrangles after the first generation ends. Also, the study recommends that for the family businesses to succeed, they need to have external connections. Incidentally, the study recommends strategic decision-making approaches to avoid missteps.