Family Business Continuity Research Articles

Succession as Part of Continuity in Family Firms

This explorative study sees the sights of the succession process and its achievement as part of family business long-term survival. This represents a huge challenge considering that only three of ten companies can reach second generation and also one of these ten companies will reach third generation. In that sense, this research provide a general approaching to the state of the art through twenty-four years of bibliographic review and its fundamental implications regarding several currents about succession´s development as taken part of family business continuity. It also shows some progress produced over the time and identifies limitations and empty spaces that justify the researching effort towards succession´s definition in family business.

Challenges of inter-generational succession in the Chinese Australian family business

Chinese immigrants have long been a feature of Australia's population mix and play a critical role in the country's economic activities, with particular contribution by Chinese family-owned businesses. Although these family-owned businesses can generate and significantly improve the financial wealth which stems from the family's original fortune, most Chinese family businesses are relatively short-lived, rarely extending beyond one generation. The high mortality rate in family businesses points primarily to the challenges of management succession. There is recognition that inter-generational succession is essential for both the profitability of Chinese family businesses and the welfare of the family as a whole. However, the intentions of inter-generational pursuit of continuity can be subject to the different goals and interests of key participants, as well as the surrounding context in which the business develops. This paper presents issues pertaining to the inter-generational diversity that might challenge the business continuity of Chinese family businesses, through the identification of how individuals perceive, relate to and initiate the succession process.

Corporate governance and family business performance

Family business continuity plans commonly establish a governance structure for the family and for the family business. The purpose of those structures is to improve strategy and control mechanisms of the family business and, to organize the communication and relationship between family owners and business executives. This research focuses on assessing the impact of those structures on family business performance. Specifically, the study assesses the impact a professional board of directors has on a company's performance. The research team selected a set of 22 family businesses. Some of these families have undergone a process of developing a family protocol over the last seven years. The authors captured the relevant information for this research by sending out a survey to each family member and to each non-family director or executive.

Family business governance in the Middle East: the challenges facing the continuity of family businesses in the Middle East

Family business governance in the Middle East: the challenges facing the continuity of family businesses in the Middle East

Pruning the Family Tree: An Unexplored Path to Family Business Continuity and Family Harmony

It is assumed that over the generations family businesses inevitably face greater family complexity. The increasing family complexity can have repercussions for the family and the business. To counteract these negative effects of an increase in family complexity, it has been recommended that business families utilize conventional family and corporate governance methods. Pruning the family tree is an alternative method of handling family complexity. However, this alternative way has been largely ignored in research. This article explores the research question: Why and how do business families prune the family tree, thus simplifying the ownership, governance, and/or management structures of the family business? The research findings indicate that introducing simplicity by pruning can be a worthwhile path to family harmony and business performance and that there is no contradiction between pruning the family tree and governance of the family and the business.

Pruning the Family Tree: An Unexplored Path to Family Business Continuity and Family Harmony

It is assumed that over the generations family businesses inevitably face greater family complexity. The increasing family complexity can have repercussions for the family and the business. To counteract these negative effects of an increase in family complexity, it has been recommended that business families utilize conventional family and corporate governance methods. Pruning the family tree is an alternative method of handling family complexity. However, this alternative way has been largely ignored in research. This article explores the research question: Why and how do business families prune the family tree, thus simplifying the ownership, governance, and/or management structures of the family business? The research findings indicate that introducing simplicity by pruning can be a worthwhile path to family harmony and business performance and that there is no contradiction between pruning the family tree and governance of the family and the business.

FAMILY BUSINESS SUCCESSION: EVOLUTIONARY ECONOMICS APPROACH

This study analyses family business continuity from founder generation to the 2nd generation in terms of succession in the context of evolutionary economics. Two literature bases; family business succession and evolutionary thinking in organisational and economic change, are reviewed and combined to provide insights to understand the nature of family business succession. Operation of the key evolutionary forces — variation, selection, retention and struggle — in family business succession are illustrated. Regarding variation, there is a concern for understanding the importance of having enough diversity within the family firm, since this diversity of routines and competences comprises the pool of variation from which to select when the environment changes. With regards to selection, there is a concern for understanding the risk of selection bias easily rooted in the family firm culture: are some variations favoured in the selection of operating, investment and search routines because of family relations, emotions and values, including decisions on who will succeed and who will own the firm in the future. Elaboration and investigation of these concepts may help to identify special characteristics of the "family firm species" that are either beneficial or risky for the survival in the evolutionary struggle.

Family business structure and succession: Critical topics in Latin American experience

This article builds on the premise that management succession, control, and structure, are central to family business continuity and that, once these are defined, other issues with potential for family conflict are easier to negotiate. These topics are addressed through the analysis of three cases of family businesses in Latin America. Research findings indicate that, for family members, succession and control are sensitive themes to be resolved to anticipate family conflict and business disruption. Family formal tiers as corner stones in structure and reliance on external members, where found to be central issues seeking a balance between business and family.

Coherence Between Values and Successor Socialization: Facilitating Family Business Continuity

The problem of CEO succession is critically important yet unique and distinct from that of turnover at other levels. Research in management agrees with the findings in family business research regarding the preference for an insider as successor, more specifically a family insider. Successful family business continuity requires raising potential successors who will add value to the firm by seeking new opportunities and fostering entrepreneurship. Parties external to the firm are likely to view succession as a signal about the institution's future; this makes CEO succession a critical event for virtually every organization. In this paper the authors outline a model that presents the different coherent options for value transmission and successor socialization that facilitate family business continuity from first to second generation. The findings are grounded in combined qualitative and quantitative techniques applied to an extensive research project involving in-depth cross-case analysis. Based on the results, the authors identify issues that families and practitioners should take into account to maintain consistency during the succession process. Professionals can assist families in preparing for continuity by: 1) identifying family value systems; 2) analyzing the variables at play in the family-business system, and 3) proposing a coherent option of continuity that both family and business can pursue. The model presented in this paper is intended to help families and practitioners follow this path by pointing out coherent combinations of values and family business characteristics and different successor socialization processes.

Family Business and Family Change: Individual Autonomy, Democratization, and the New Family Business Institutions

The renewed attention to family business in western societies is usually attributed to a past lack of attention to the subject because of its private character and to the resurgence of family business in the context of economic restructuring. This paper argues that there is a third reason for the renewed attention to family business, namely, the changing character of the family institution. In particular, there are broad trends toward the pursuit of individual autonomy and democratization in family relationships. A qualitative study of high-wealth stakeholders in Australian family businesses found that the principles of individual autonomy and democratization presented challenges for family business solidarity and continuity. These challenges gave rise to new family business institutions designed to facilitate communication and trust. These institutions are at the center of the renewed attention to family business in western societies.

Defining the New Professional: The Family Business Counselor

After years of development, family business counselors have emerged as multidimensional and holistic advisors serving the needs of families in business. These unique technically trained advisors have expanded their professional boundaries to encompass a broad range of skills that are required to address the multiple and complex issues associated with family business ownership, successorship, and continuity of the business enterprise. Their successful experience over a number of years with many family business clients is a rare and valuable resource. These new professionals are prepared to meet the needs of family business groups. The family business counselor has finally arrived.

Family Business Continuity from the Corporate Side

Family Business Continuity from the Corporate Side