The Influence of Succession Planning, Knowledge Sharing and Innovation Capability to Enhance Sustainability of Small and Medium-Sized Family Businesses’ Socioemotional Wealth

Abstract

Family businesses are known for prioritizing non-financial goals, such as socioemotional wealth (SEW). However, many small and medium-sized family businesses (SMFBs) face challenges like insufficient succession planning and reluctance to engage in innovation and knowledge sharing. While research on SEW is extensive, limited studies explore the relationship between succession planning and SEW, as well as the role of innovation capability in mediating the link between knowledge sharing and SEW in SMFBs. This study addresses these gaps by surveying 118 Malaysian SMFBs through non-probability sampling. In order to guarantee the data’s representativeness of SMFBs, the questionnaire was pre-tested by specialists who included numerous screening questions and inclusion criteria for sample selection. The IBM SPSS Statistics and Smart-PLS software were employed to analyze the data. The results indicated that SEW attainment was influenced by knowledge sharing, whereas SEW was not influenced by succession planning. It was also discovered that the relationship between knowledge sharing and SEW attainment was mediated by innovation capability. These findings challenge traditional views on succession planning and highlight the importance of innovation and knowledge sharing for the sustainability of family businesses. Individuals who are involved in family enterprises can make more informed decisions and take actions that contribute to the long-term success, sustainability, and well-being of their organizations by comprehending and implementing these findings.