Succession in family business: multi-source perspectives

Abstract

PurposeDespite the extensive breadth of research into the critical challenge of succession in family business, generational succession in family business has been investigated from predominately one-dimensional perspective. The purpose of this paper is to respond to call for a multi-perspectives examination of leadership succession in order to embrace the dynamic and complex nature of succession in a family business. Accordingly, the authors investigated the key personal and professional factors associated with effective family-business succession across four key stakeholders: incumbent, successor, family, and nonfamily members.Design/methodology/approachThe explanatory research design included 16 interviews in Phase 1 and 41 prospective case study interviews in Phase 2, both with Australian family businesses that had or were about to experience generational transition.FindingsIncumbents and successor interview findings support the benefits of maintaining a cohesive family business, adaptable family culture, and familiness for effective succession. The authors also identified several personal components (e.g. family-business socialization and external experiences) that can help determine the commitment of successors and how this commitment can change once they assume a leadership position. Business size was the professional component supported by incumbent, successor, and nonfamily members as having a significant impact on succession process. As family business grows and becomes more highly complex, a clearly defined set of procedures become imperative.Practical implicationsFamily-business practitioners can apply the findings to manage the processes and expectations of family and the business to achieve effective generational succession and thereby increase the sustainability of the business.Originality/valueThis research provides a coherent and comprehensive understanding of the interdependencies of competing priorities in the complex succession process that is essential for family-business sustainability and performance.