Transition Management in a Family Business: A Case of Excel Transporters

Abstract

Purpose – The purpose of this case study is to investigate the issues that arise at the time of transition from one generation to another in closely held family businesses. This is particularly, if the founder owner-manager has to pass the heir ship to its children and specifically if it’s a female. Through this case authors have made an attempt to discuss the significance of corporate governance structure to plan transition and mitigate conflicts at the time of generational transition of business in a closely held family business.Design/methodology/approach – The case is based on primary research, secondary information, testing the case several times and filling the case gaps during the process. To authenticate information, multiple sources of information have been used.Findings – Results indicate conflicts started from the absence of corporate governance (Ownership) structure in family business, to power positions followed by transition. Breakdown of communication and of trust within the family unit, inadequately prepared heirs, forced entries of sibling in the business with no competence besides the patriarchs’ distribution of business were of major concern; hence, there is a need to professionalise the family business.Research limitations/implications – The findings are based on observations on one company and research carried through secondary sources, which may limit to theory creation. Practical implications – Several studies suggest that, all across the world majority of family businesses failure, while transition from one generation to another. This case discusses the importance of ownership structure or corporate governance structure in family business to handle conflicts and transition management in a closely held family business structure.