Abstract
The majority of research has focused on how families can best prepare to hand the family business to the next generation and concentrated mainly on factors that facilitate succession. However, very few studies attempted to discover a set of factors that may inhibit and prevent intra-family succession. In this study we develop research propositions regarding the impact of the antecedent issues inhibiting the critical success factors for effectiveness and satisfaction with an intra-family successful succession. It is hoped that the conceptual framework advanced in this study and further empirical work will give us a much better understanding of the various issues that inhibit and possibly prevent intra-family succession such as, the process issue of identity confirmation; the individual issue of the owner’s age; the relation issue of the family firm’s degree of formalization; the context issue of outside options for potential successors and; the financial issues of low capital stock and variability of earnings.
Highlights
Firms are considered as one of the engines of the post-industrial growth process since they are so important for intergeneration development and transfer of entrepreneurial talent, business success, long-term strategic commitment and entrepreneurial independence (Poutziouris, 2001), as well as, economic development in local communities (Astrachan et al, 2003; McCann and Bowman-Upton, 2001)
Some researchers view the family dimension as a constraint to true entrepreneurial endeavors (Holland and Boulton, 1984), the vast majority of the literature asserts that family businesses constantly achieve a better performance than non-family businesses (McConaughy et al, 2001; Vickers, 1997), by maintaining a competitive advantage through the preservation of the “idiosyncratic knowledge of family character” (Bjuggren and Sudd, 2001)
The most intriguing area in the family business literature that greatly affects the fate of the family firm’s entrepreneurial continued positive outcomes is the succession process, as the effective succession rate among family firms is wrought with many difficulties
Summary
Firms are considered as one of the engines of the post-industrial growth process since they are so important for intergeneration development and transfer of entrepreneurial talent, business success, long-term strategic commitment and entrepreneurial independence (Poutziouris, 2001), as well as, economic development in local communities (Astrachan et al, 2003; McCann and Bowman-Upton, 2001). In the US alone, family firms represent 90% of all businesses (Dyer, 1986), while the global percentage is high and stands around 70%. The most intriguing area in the family business literature that greatly affects the fate of the family firm’s entrepreneurial continued positive outcomes is the succession process, as the effective succession rate among family firms is wrought with many difficulties
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