Family Business Succession Research Articles

Leadership, Communication, and Job Satisfaction for Employee Engagement and Sustainability of Family Businesses in Latin America

This research focuses on the determinants of employee engagement in family businesses in Peru. The study is based on previous research that showed the importance of organisational culture, leadership, and human resource management practices to achieve effective business performance. The methodological strategy was to conduct a qualitative, quantitative, and documentary analysis research. The study found that participatory and authentic leadership styles, effective communication, and job satisfaction were key factors to retain talent in two family businesses and small to medium-sized enterprises in Peru. These factors can enhance employee engagement, which is critical for the success of family businesses. The results suggest that Peruvian family businesses can improve their sustainability and contribute positively to the economic growth of the country by utilising different measures. They can prioritise leadership, communication, and job satisfaction; offer opportunities for employee development and growth; provide competitive compensation packages; and create a positive work environment. The findings have implications for family businesses in emerging markets as well as for businesses operating in consolidated markets.

Through her eyes: How daughter successors perceive their fathers in shaping their entrepreneurial identity

This study investigates how daughter successors perceive that their entrepreneurial identities have been influenced by their fathers. Drawing on narrative identity and identity work theories and adopting an inductive and interpretive approach, we analysed interviews with 21 daughters. The findings reveal that their perceptions of their fathers can influence their entrepreneurial identities in multiple ways, concerning both why daughters become family business successors and how their entrepreneurial identities are shaped. To examine this variety of experiences, this study proposes a typology of four processes through which daughters’ entrepreneurial identities were formed (submission, self-empowerment, enhancement, and idealisation) and how they perceive their fathers’ role (commander, patriarch, mentor, and myth) in influencing these processes. This study contributes to the family business and entrepreneurial identity fields of research by showing that daughters’ perceptions of the role they ascribe to their fathers can be powerful mental representations that exert a great influence on their entrepreneurial identity.

Intergenerational power gap and R&D investment: Evidence from China

Family firms face the dual challenge of succession and innovation. Based on the attention-based view, this study empirically investigates the effect of intergenerational power gap on corporate R&D investment, using a sample of Chinese listed family firms. We find that intergenerational power gap has a negative effect on corporate R&D investment, and this negative relationship is amplified in traditional industries and in firms with a low proportion of institutional ownership. Our findings have theoretical and practical implications for R&D investment in the family business succession process.

Methods of social network transfer in Thai family business succession

Trusted social networks are the one of invaluable assets of family businesses, which take time to build and to maintain. Therefore, in situations of family business succession, the process of network transfer cannot be ignored, but instead must be well planned in order to ensure the continuity of the existing social networks.Drawing upon Steier's (2001) natural immersion and planned succession on social network transfer in family business succession, thirty in-depth interviews were conducted with family business predecessors in Thailand; to see how they prepare and handle the transfer of their social networks to their successors-to-be.A two-step process of social network transfer was found to be a common practice amongst them. Step one “network transfer preparation” is the stage where the predecessors prepare their potential successors to be ready, and also to be competent to run the family business; by engaging them in the family business at the early stages and at an early age, encouraging them to gain work experience from external organizations, as well as getting them to study in the field that is most relevant to their family businesses. Step two is “network transfer execution”, in which successors-to-be are introduced to business partners, and jobs are delegated to them gradually. The predecessors expect their successors to maintain the same level of trust and collaboration, and uphold the business reputation that has been built up through one generation to the next. Whether or not such ties will be able to be maintained or strengthened depends on how well their successors invest their time and energy in developing trust levels and maintaining the cohesion of their existing social networks, as well as building up those networks further.

The Mortality of Family Business Leaders: Using a Palliative Care Model to Re-imagine Letting Go

The succession literature frames a leader's reluctance to let go as the single largest deterrent to succession planning, and early literature pointed to the stronghold that mortality can have on letting go. The notion has not captured our continued curiosity, preventing a full understanding of the tensions and antecedents of family business succession. Most scholarship on letting go describes a quest for immortality and in this sense, ‘mortality’ has been misapplied and one dimensional. In an interdisciplinary boost to family business, we turn to palliative care, where it is believed that the acknowledgment of one's mortality will facilitate letting go. We develop four typologies of letting go by combining elements of mortality awareness and planning that offers nuance and insights into long-held beliefs about this most vital and finite ‘soft issue’. We discuss emotion governance tools that help change the mortality awareness trajectory and support family business succession.

The Process of the Intergenerational Succession of Leadership in a Family Business

Background and objective: In this paper, we explore first-generation leadership succession in family businesses which, despite extensive literature on the subject, remains insufficiently understood. Our goal is to acquire new knowledge and understanding regarding this phenomenon with a view to making it more effective.

Intuitive Decision: When to Begin the Succession Process

Family business succession research usually focuses on the problems that make many companies fail during or as a result of succession, to focus on the individual process of decision making itself is rare. In understanding the phenomenon on the personal level of reality, and understand decision-making process of succession, the decision maker’s thinking process and aspirations have to be taken in consideration. This can lead to uncertainties and errors; decisions are predetermined as being rational human limitations border them. Therefore, aspirations and search rules are adjusted over time in response to experience. Our aim was to search for the understanding of a phenomenon: the succession decision in family businesses, where, based on the survey, we attempted to order their intuitive knowledge and aspirations to surface the aspirations, intuitive knowledge of decision makers, in order to deepen our understanding of the succession decision making phenomenon.

Does congruence between a descendant entrepreneur's personality traits and family business values matter for succession?

In this paper, we investigate two research queries pertaining to the success of small family business succession. First, we examine how the Big-5 personality traits of descendant entrepreneurs influence the success of their family business succession. Second, we investigate whether descendant entrepreneurs whose personality traits are congruent with the values of their family business, would lead to the success of their family business succession, through the mediating role of descendant entrepreneur-family business value congruence (DE-FBVC). We rely on the person-organization fit theory for our conceptual framework and we collected primary data from 124 respondents designated as chairman and managing directors in small family businesses. Our results show that a descendant entrepreneur's openness, extroversion, conscientiousness, and agreeableness traits are likely to lead to successful family business succession, but a descendant entrepreneur with neuroticism trait is unlikely to do so. In addition, our results reveal that the DE-FBVC mediates the relationship between openness and extroversion traits with succession success positively, but between neuroticism trait and succession success negatively. By contrast, we find that DE-FBVC does not mediate the relationship between conscientiousness and agreeableness traits with succession success. The findings of our study suggest that while four of the Big-5 personality traits matter for the success of small family business succession, specific personality traits of descendant entrepreneurs which are found to be congruent with the values of their family business, will also lead to succession success.

Polygamy and family member relationship on Guinean family business succession planning

PurposeThe aim of the paper is to identify the key factors that affect Guinean family business (FB) succession planning. The study also evaluates the impact of these factors on the succession planning process to ensure business continuity.Design/methodology/approachThis descriptive quantitative research is based on a survey of 383 family businesses FBs in Conakry, the capital city of Guinea. The structural equation model (SEM) was used to analyze and validate the model featuring factors that influence family business FB succession planning (FBSP). The Theory of Stewardess and the Theory of FB Rivalry have been employed in the study.FindingsWhile the incumbent attributes, firm attributes, and estate tax were revealed to have no significant influence on succession planning, the successor attributes and the family relationship significantly affected succession planning. Besides, undesirable domestic relationships among children of different mothers from polygamous families had an indirect impact on business succession planning.Research limitations/implicationsThe limitations of the study include the population of the FBs being restricted only to those located in Conakry, the capital city. The study did not consider other regions and cities of Guinea. Besides, the grouping of attributes or characteristics was problematic, and studying each attribute separately as an independent variable would be much better. Finally, the limited literature and available data on Guinean FBs in general and succession planning generalize the findings to be done cautiously. Therefore, more studies are needed on FB succession in the country to further confirm these findings.Social implicationsThe study may help ensure social solidarity based on the findings of factors associated to polygamous families in relation to businesses.Originality/valueFew studies have been done on FBs in Conakry. Besides, putting attributes or characteristics into categories has been presented. Moreover, there is inadequate relevant literature and data on Guinean FBSP. Considering these limitations, the generalization of the findings should be done with caution. Therefore, this study touched on the issue of family business succession in Guinea which substantiates the findings.

Advice for Family Business Successors: Be Humble and Curious

Advice for Family Business Successors: Be Humble and Curious

Family business succession and innovation: a systematic literature review

This study systematizes and classifies the state-of-the-art of knowledge about innovation and succession in family businesses. Our systematic literature review details the existing knowledge and establishes new points of departure for future research. This research analyzes 32 articles retrieved from the Web of Science database and makes recourse to bibliographic coupling through the VOS viewer software to identify the main lines of research on the theme of innovation and succession in family businesses before advancing new topics for future research. The results identify and classify the prevailing theoretical foci in this domain to: (i) Impact of Succession on Innovation; (ii) Succession and Sharing of Knowledge; and (iii) Obstacles to Innovation. This study also shows that the succession process hinders investment in innovation and that family businesses’ innovation capacity represents life or death for these businesses. This review also presents a framework that shows how succession processes impact innovation in family businesses.

A Model to Manage Succession in Family Business

A Model to Manage Succession in Family Business

Social skills in family business succession: going beyond economic-centred goals

Social skills in family business succession: going beyond economic-centred goals

Theory and practice of the evolutionary networks of potential in a family business succession

Aim/purpose – This paper aims to introduce and describe a new paradigm (model) of evolutionary dynamism of family business potential in the succession process and its empirical simulation in family enterprises from culturally close “post-socialistic” coun- tries: the Czech Republic and Poland. Design/methodology/approach – The conceptual basis for developing the evolutionary model of family business was our research on the sample of 235 small and medium-sized family enterprises from the Czech Republic and Poland. A practical experimental simu- lation of the model was carried out in 12 Czech and 19 Polish family companies. Findings – The proposed model is based on economic and natural laws, including opti- mization proportions of the golden ratio, laws of time economics, theory of innovation, and “Moore’s law.” This model allows us to simulate and analyze the pace of accelerat- ing innovation cycles and the dynamism of intergenerational changes of family business potential in the succession process. Research implications/limitations – The social and industrial revolution 5.0 is getting near and global economic, social, cultural, ecological, and other contemporary turbu- lences, built on the “microcosm optimization” of living matter, having two extreme marginal variants for the subsequent (evolutionary) development of family business: (a) an option of “harmony” or (b) an option of “tragedy.” One limitation of the model is its general nature, making it sensitive to outlier cases. Originality/value/contribution – The proposed model provides valuable analytical guidelines for family business succession and significantly highlights the role of intra- family dynamics in this process. It also represents a novel analytical approach to as- sessing and predicting the longevity of family business as well as an opportunity for the development of mixed research in family entrepreneurship. Keywords: Family entrepreneurship, family business, succession, innovation, potential. JEL Classification: L26, M21, O31, P47

Determinants of woodcraft family business success

The woodcraft industry has been developing in Bali for more than half a century in the form of family business (SMEs) which is currently managed by the third generation or the transition from the second to the third generation, where this phase is the climax of the family business. Apart from contributing to tourism, this craft business also has cultural values. Moreover, the tourism situation and macroeconomic shocks have had an impact on business conditions. This research aims to analyze the performance of a woodcraft family business based on a family and financial approach, through a two by two matrix analysis as well as to analyze the determining factors of willingness to succession of woodcraft family business in Bali, with MICMAC analysis. The results show that the performance of the family business in this case is high emotional but low financial capital. There are 18 identified factors related to the willingness to succeed in the woodcraft family business, and the most influential factor (existing and forecasting) is the participative leadership style, while the most dependent is personal interest which is the involvement of the successor from an early age in family business activities.

Knowing me, knowing you: A study of the types of knowledge transferred during the succession process in intra-family takeover of family businesses in Hungary

This study aims to examine the role of knowledge in ensuring the successor’s readiness for intra-family succession in Hungarian family businesses. The study investigates the research question: which types of knowledge shape the successor’s readiness for succession from both the founder and successor perspectives? A dyadic approach is employed, examining both the founders’ and successors’ perspectives through semi-structured interviews. Based upon the findings, propositions are set out for further research directions. For practitioners, the findings uncover the key types of knowledge when preparing for succession and the order in which these should take place. Practitioners can thus develop strategies for improving the development of successor’s knowledge capital, increasing the chances of a successful succession process.

Familiness, Interests, and Opportunities: Reframing the Landscape of Family Business Succession

Familiness, Interests, and Opportunities: Reframing the Landscape of Family Business Succession

The Influence of Personal Characteristics of Founders of Failed and Prospered Generational Transition Family Businesses in Anambra State

Family businesses which are often adjudged very risky ventures as a result of rapid decision makings are quite different from other enterprises, as they contribute immensely in wealth creation, economic development, sustainability, employment and job opportunities, improved Gross Domestic Product, prospect from younger generations, as well as mentorship from experienced business leaders. However, despite their numerous contributions, they are often bedeviled by numerous challenges which often lead to their failures at the exit or death of their founders. This paper identified the rate of family businesses that have suffered generational transition failures in Anambra state, and also examined the differences in personal characteristics of founders of both failed and prospered Generational Transition (GT) family businesses in the state. The application of Taro Yamane formula gave a sample size of 327, a total of 327 questionnaires was therefore administered to Directors and Managers of Family businesses in the three main cities of Anambra state. The results of the study revealed that 72 percent of the family businesses fail after generational transition. Also, the analysis based on the mean of the individual questionnaire items, with the acceptance benchmark of 3 revealed that there are significant differences in the personal characteristics of the founders of the failed and successful generational transition family businesses. The regression analysis validated the results as indicated by the correlation coefficient (R = .868). It could also be observed from the coefficient of determination (R-Square = .792) that 79 percent differences exist in the relationship between the personal characteristics of founders of the failed and prospered GT family businesses in the state. The paper concluded that founders and Directors of FBs should adopt positive personal characteristics, in order to mitigate the high failure rates of family businesses.

Bringing a Horse to Water: The Shaping of a Child Successor in Family Business Succession

This study critically investigates and evaluates the childhood and adolescent year strategies, and efforts that parent-owners of family businesses incorporate to encourage and prepare children for a successful future succession. The sample consisted of six family businesses in the North East of Scotland: two successfully introduced a second-generation, two a third generation and one a fourth generation, with one still in the founder stage. The findings reveal that the succession planning process was an instantaneous event into generational bridging, where no formal planning process was commenced. Parent-owners influenced and facilitated knowledge transfer and education, leaving control to the child successors with career options. The research has also shown the difficulties in how the child successors of the future may find succession challenging and demanding with contextually complex issues.

Family Business and Religion – Research Agenda

Abstract Objective: The aim of the study is to find out what is our state of knowledge about the importance of religion for the activity of family businesses. The literature review on the impact of four major religions: Buddhism, Christianity, Hinduism and Islam on the family business development has been made. The issues as business development, resource allocations, risk taking, succession and business ethics in family business under the influence of religion have been discussed. The synthesis effect of the study is the picture of a specific research field. And, as a result of the study the important niches in our knowledge, main barriers of research development and most inspiring directions for future studies have been identified.