Relationship between Succession Planning and Retirement Variables Among Family Businesses in India: A Cross Gender Study

Abstract

This study investigates the relationship between retirement planning and succession planning in the family businesses in India across gender. Data was collected from 80 i.e. 40 female and 40 male CEOs of small and medium sized family businesses in India with help of a structured self administered questionnaire. Confirmatory factor analysis (CFA) in LISREL (8.70) was done to check the validity of the scale. Results of the study strongly suggest that though there were certain visible differences across gender, succession planning in Indian family businesses is typically an unplanned affair. The relationship between succession planning and retirement planning varies across gender. Therefore, indicating that the dimensions of strategy planning and implementation need to change according to gender. The results of the study highlight the patriarchal nature of the Indian family businesses even the ones run by female CEOs. The results indicated that top ranking dimension across gender for CEOs is relationship with family after retirement but the rating across the dimensions changes between male and female CEOs. The results indicated that the planning for retirement needs was unique across gender in Indian Family Businesses. Analysis highlighted that there was significant difference in the variables of retirement which influenced succession planning across gender. In case of males succession planning was strongly correlated to retiree well being and development, continuity and viability of the enterprise and ownership and succession planning. While for females it was strongly correlated to one variable i.e. ownership and succession planning. Regression analysis indicated that for males well being dimension of retirement influences succession planning most strongly i.e. increasing well being one unit will increase chances of successful succession planning by 8.223. As for females results indicated that ownership dimension of retirement influenced succession planning strongly i.e. increasing ownership by one unit will increase chances of successful succession planning by 3.513. Because of different problems faced by genders in running their businesses Indian female entrepreneurs were found to be more concerned about ownership transfer of their enterprise than other variables of their retired life. The study will help the family business owner/managers, advisors, consultants and/or researchers in developing a proactive succession planning strategy formulation and implementation. The research will also contributes to the growing body of knowledge establishing links between the retirement and succession planning.