Family Business Succession Research Articles

Exploring Support Practices Within Family Business Succession Process: Evidence from Tunisian SMEs Family

This study aims to identify the support practices that enable a successful family business succession process. Using 17 small- and medium-sized family businesses, the authors attempt to analyse the specifics of family business succession processes and identify the support practices appropriate to each phase of the process. The results show that advice and consultation are necessary during the pre-family business succession phase. Furthermore, the results reveal that training is needed to acquire and update knowledge and information during the family business succession phase. Finally, the results confirm that mentoring can ensure social and cognitive transfer in the post-family business succession process. This paper presents a theoretical innovation, as it is the first research study to attempt to understand how supportive practices can contribute to the success of the succession process.

Drivers of knowledge transfer for succession in family business: a perspective article

PurposeThis study aims to identify various factors that have driven the knowledge transfer process for succession purposes in family business since the 1920s and discuss their implications for advancing effective succession planning in this business sector for the next 100 years.Design/methodology/approachThe paper reviews and synthesizes current research on knowledge transfer drivers in family business from 1923 to 2023 and draws out future perspectives on what will influence the knowledge-transferring process in the next 100 years.FindingsTrust, organizational culture and environmental factors such as the need to create competitive advantages, technological advancement and new sources of knowledge have been identified as the most prominent drivers of knowledge transfer for effective succession in family business throughout the 1920–2020s. In the future, the ability to create value, the internationalization process and business innovations will play an essential role in knowledge-sharing among family and non-family members during succession.Originality/valueThe paper provides a review of past development and a future perspective on factors enhancing the effectiveness of knowledge transfer for succession in family firms.

Family Business Succession, Innovation, and Compensation: What You Need to Know

Family Business Succession, Innovation, and Compensation: What You Need to Know

Succession intentions of daughters in family businesses: experiences from Sri Lanka

PurposeThis paper aims to explore the succession intentions of daughters in family businesses in Sri Lanka by shedding light on the motives behind their willingness to succeed in the family business.Design/methodology/approachA qualitative approach using semi-structured interviews was used to explore the factors that may influence succession intentions among a group of seven prospective successor-daughters.FindingsFindings showed that while a majority of the daughters sampled have positive succession intentions, there were a few who were either undecided or unwilling. Interestingly, what motivated some daughters to be willing successors was also considered demotivating for others. Daughters perceived succession in family businesses to be impacted by both personal and family background, traditional gender-role expectations and other socio-cultural factors.Originality/valueFindings from this study provide key insights into gender-related issues with regard to succession in family businesses.

An Entrepreneurship-as-practice perspective of next-generation becoming family businesses successors: the role of discursive artefacts

ABSTRACT Family is the most important, yet under researched, dimension in family business research. Following recent calls in Entrepreneurship-as-Practice, we bring a practice-based approach to family business research to understand next generation engagement over extended periods in family life. Drawing on a culinary family business’s three published cookbooks, theorized as ‘discursive artefacts’, we examine how mundane family business practices can enable next generations to become successors. This study contributes to family business research with its re-focus on the family and offers new insights into practice theory-building in the emergent Entrepreneurship-as-Practice. Our findings illustrate how everyday practices in family lives – for example, cooking – can enable next generations’ becoming family business successors, through socializing, bridging, and leading.

Management and succession in family businesses: Bibliometric review

Las empresas familiares representan un pilar fundamental en la mayoría de las estructuras económicas globales y uno de los temas centrales de estudio es la sucesión intergeneracional. En esta investigación se analiza la producción científica sobre gestión y sucesión de empresas familiares mediante métodos bibliométricos. Se analizaron metadatos de 103 documentos publicados en la base de datos Scopus entre 1999-2023. Los resultados evidencian un campo en expansión desde 1999, con crecimiento exponencial desde 2015, liderado por autores de Estados Unidos, Italia y España, en revistas especializadas como Journal of Family Business Strategy. El mapeo científico identificó a la gobernanza familiar, planes de sucesión y teoría de agencia como temas centrales, revelando el énfasis en estudiar la institucionalización y traspaso generacional en estas empresas. La espectroscopia rescató aportes seminales sobre recursos únicos, costos de agencia y capital paciente de Penrose, Jensen & Meckling y Sirmon & Hitt, que sentaron bases teóricas sólidas sobre las particularidades estratégicas de las empresas familiares. La evidencia denota una comunidad académica emergente abocada al estudio de la gestión y sucesión en empresas familiares, con aportes influyentes previos, sobre la cual se debe continuar profundizando.

Family business succession: opportunities from the Victorian wine industry

PurposeThis paper aims to examine the opportunities of continuous family succession in operating small-to-medium-sized wineries (SMWs) in Victoria, Australia.Design/methodology/approachUsing case studies from Victoria, an exploratory qualitative approach was used to explore the benefits of continuous family succession in this conceptual paper. This included interviewing participants from wineries about their perceptions about family business succession. Themed analysis was applied to highlight the findings and overall conclusions about why the wine industry was affected more than other industries with regard to family business succession issues.FindingsThe three main findings of this study include family succession is extremely important in building a story customers can relate to; family reinvestment opportunities for financial sustainability and innovation of the winery and family succession for future employment and legacy. These three findings highlight the way family business succession is integral to the successfulness of the wine industry.Practical implicationsSmall-to-medium-sized wineries (SMWs) have many challenges including long-term financial sustainability and innovation opportunities. To assist in overcoming these challenges, the findings suggest winery owners need to create lasting legacy through story-telling, competitive advantage and family linkage (succession). This will assist wineries to create marketing campaigns focussing on family succession and brand attachment, seven opportunities for family reinvestment and innovation leading to financial sustainability and competitive advantage.Originality/valueThere is little research investigating family succession in the Victorian wine industry even though it is common practice and essential to marketing and communication campaigns. This paper supports continuous family succession as a legitimate marketing technique and long-term financial sustainability and innovation for small-to-medium-sized wineries (SMWs) through reinvestment opportunities. This is the first time small-to-medium-sized wineries have been defined as SMWs and reinvestment opportunities have been identified by wine stakeholders.

Role of Female Successors in Family Business Innovation: Some Insights From the Largest Matrilineal Muslim Society

This study was conducted to examine innovation and succession planning of some Minangkabau family business using the institutional logic approach. It is important to note that the Minangkabau is completely a Muslim society in Indonesia and one of the largest matrilineal societies in the world. Moreover, innovation and succession planning are important factors and interlinked concepts signifying the dynamics of a family business. A qualitative approach was implemented in this study and this involved interviewing 17 Minangkabau people from six family businesses after which thematic analysis was utilized to examine the collected data. It was discovered that there were two consecutive major patterns regarding family business innovation and succession planning based on business, community or socio-cultural values, and family logic. Moreover, two possible paths were identified with the interviewees observed to have one which involved the importance of succession planning and its consequences on business innovation. This means family business innovation in real organizations needs to be based on trustworthiness as well as the adoption of appropriate changes and strategies.

Parental influence on next-generation family members in South African Black-owned family businesses

PurposeThere are many factors that contribute to a person's career choice. The decision of whether or not to join the family business is certainly most influenced by parents. The aim of this research is to determine how much of an impact parents have on their next-generation family members' (NGFMs) decision to join the family business.Design/methodology/approachFollowing a positivistic paradigm, a cross-sectional design was followed using a quantitative, self-administered questionnaire through a judgemental sampling technique. A structured questionnaire was distributed to South African respondents who have parents who own a family business. The data were analysed using Statistica.FindingsThe results indicate that parental style, culture, self-efficacy and parental identification were found to influence the NGFMs' intention to join the family business significantly. Their decisions can be influenced by several factors, and parents can better manage these aspects by being aware of these influencing factors.Practical implicationsGiven the imminent ageing of a large cohort of senior leaders, this research adds to the body of knowledge by highlighting the necessity for committed, willing and ready next-generation family members (NGFMs) to ensure efficient succession in family businesses. Therefore, effective management is required for succession-planning, particularly from the perspective of the successor.Originality/valueThis study, therefore, responds to calls for more in-depth quantitative studies on family businesses in general and on Black-owned family businesses in South Africa in particular. This study will evaluate the significance of parent influence on NGFMs to join Black family-owned businesses in South Africa. This research will assist family business owners and their families in understanding their children's intentions, designing and evolving an appropriate system to instill necessary traits, skills and attitudes in the children, preparing them for upcoming challenges, adding new perspectives to the family business and ensuring its profitability and long-term growth.

Technology Enables Sustainable Development: Family Business Succession under Digital Transformation

In the dual context of digital transformation and intergenerational inheritance of family enterprises, digital transformation, balanced intergenerational inheritance and de-familization model will jointly contribute to the performance of family enterprises. This paper takes Chinese A-share-listed family enterprises as the research objective. Stata17.0 statistical software is used to describe and regress the data of family enterprises in the fiscal years from 2015 to 2020. The results show that digital transformation has a negative impact on the performance of family enterprises, but the balance between intergenerational inheritance and de-familization will have a positive impact on the performance of family enterprises.

Generation AI and family business: a perspective article

PurposeThis perspective article responds to the emergence of artificial intelligence (AI) as a significant opportunity for growth among family businesses, highlighting the need for future research to attain a clear picture of the next generation of family business successors.Design/methodology/approachThis is a literature review of current technology adoption within family businesses. The authors offer some research insight to spur critical thinking and discourse around the impact of AI on family business successors.FindingsFamily businesses are initially skeptical of AI technology. However, its use and adoption are crucial for the survival of the family business. To leverage this technology, the authors need to investigate the role of the family business successors as “Gen AI.”Originality/valueIt is challenging but necessary to develop policies and educational support for successors to ensure the survival of family businesses worldwide. The authors propose four key areas of future research.

Family Business Succession Plan for Bumiputera-Owned Small and Medium Enterprises: A Review

Transgenerational entrepreneurship is defined as the creative and initiative-taking creation of self-sufficiency in a family-owned business that lasts generations. The process of passing on management and ownership of a family business to the next generation through inheritance is known as family business succession. A succession plan is crucial for ensuring the company's transition and continuity. The process of selecting a replacement in a small and medium enterprise (SME) is more difficult because the number of successor candidates is smaller than in a corporate firm. Therefore, the purpose of this study is to identify the challenges and factors that incumbents must consider when selecting a successor and implementing a succession plan. The study's findings indicate that internal conflicts between the leader's business and family, the leader's obsession with his leadership legacy, and the successor's level of willingness to accept responsibility are the main obstacles to implementing a succession plan. The succession planning process considers a variety of factors, including education, competencies, demographic factors, relationships with family members and incumbents, experience, integrity, birth order, and primogeniture.

The Determinants of a Successful Family Business Succession

Majority of business in Indonesia is family business firm. In fact, according to Daya Qarsa Research Firm in 2022, family businesses have contributed about 80% to Indonesia’s GDP as well as 40% to Indonesia’s market capitalization. However, most of the family businesses start to falter during the second generation and doesn’t last until the third generation. This article aims to determine 1) the influence of succession planning on family business succession, 2) the influence of family relationship on family business succession, 3) the influence of entrepreneurial spirit on family business succession, 4) the influence of intergeneration managerial mindset on family business succession. The method used to collect data in this study is online question form with google-form questionnaire with a total sample of 37 respondents. The data analysis technique used is Structural Equation Modeling (SEM) with SmartPLS as the data processing tool. The samples in this study are family business successors in Gorontalo. The result of this study is 1) succession planning has an influence on family business succession, 2) family relationship has an influence on family business succession, 3) entrepreneurial spirit has an influence on family business succession, 4) intergeneration managerial mindset has no influence on family business succession.

Do the Choices of Family Business CEOs Affect Investment Decisions?

Abstract Family firms are a common organizational form in emerging economies. Almost 80% of firms are controlled by families and 40% of them are controlled by founder CEOs in Taiwan. Thus, family founders play an important role in complex financial decisions. In addition, the average age of family CEOs is around 60 years old, so now is a big time for the succeeding generation to make the right decisions leading to a successful family business. However, prior studies have contradictory conclusions about the relationship between family firms and investment policies. The sample is based on data from Taiwan family firms for whom the data was manually collected on annul reporting over a period of 2009-2015. Unlike the expectation of the entrenchment effect, we find that both family founder and family descendant CEOs have a propensity to undertake efficient investment decisions, which supports the socioemotional wealth perspective. JEL classification numbers: G11, D61, J12. Keywords: Investment efficiency, Over-investment, Family Founder, Family Descendants.

Women in family business succession: a systematic literature review and future research agenda

Women in family business succession: a systematic literature review and future research agenda

Reducing agency costs through recruitment: staffing referrals and family business success

PurposeThe role of family business staffing practices in their ultimate success remains largely unknown. The purpose of this paper is to test the notion that firms with greater family essence manifest their commitment by leveraging referrals as a recruitment source, which in turn is associated with higher performance. The hypothesized model posits that reduced agency costs from hiring through owner referral utilization (ORU) provide high-family essence firms with stronger performance.Design/methodology/approachThe study draws upon a sample of 194 small and medium-sized family business owners.FindingsFindings from OLS regression and the PROCESS model in SPSS support the hypothesis that recruiting nonfamily employees from referrals helps lessen agency conflicts and serves as an intervening mechanism in the relationship between family firm essence and firm performance.Originality/valueThis study draws on agency theory to shed light on how family firms successfully bring nonfamily employees into the fold despite their human resource limitations. The results extend theory on family businesses by demonstrating that those with higher degrees of family essence are more likely to attract applicants via ORU. Leveraging this recruiting practice allows family businesses to hire nonfamily employees who share the values and goals of the family firm, thus lowering agency costs and fostering higher performance. More broadly, the findings offer insight into the role of staffing practices in family firm success.

Unraveling Ties: Exploring Global Family Business Conflicts

Family businesses have historically played a vital role in economies around the world, serving as the bedrock of societies and regional economies. They have emerged as key employers, significantly impacting national economies. Notably, a select few family businesses have even fostered the growth of successful conglomerates, contributing substantially to employment opportunities within their respective nations. However, it is important to acknowledge that many family businesses have encountered internal disputes, with only a handful managing to keep such conflicts discreet, while others have struggled. Conflict and succession represent the two primary threats to the continued success of family businesses. Conflicts within these businesses often arise when family owners eel hat their personal needs are not being fulfilled. Effectively managing such conflicts becomes crucial not only for the survival of the business but also for the well-being of the family involved.

Beyond entrepreneurial failure: Framing failure in the context of family business succession

AbstractEntrepreneurial failure in the business creation context has received increasing attention over the past 2 decades. However, family business succession failure remains largely unexplored. Accordingly, the aim of this research is to understand the meaning of failure during family succession by proposing a typology of failure adapted to this context. A longitudinal qualitative study was conducted over six years with seven Tunisian family businesses, involving 54 interviews, mainly with their incumbent and successor. The main results highlight diverse perceptions of failure among successors, incumbents and other stakeholders. The findings also demonstrate that the family dimension must be considered to better understand business succession failure.

Market-oriented succession effectiveness in family business – Case-based evidence from Cyprus family-owned wine business

The incessant effort towards long-term survival and competitiveness is especially strong among family businesses, which, due to their unique characteristics, face particular challenges that jeopardize their business potential and market orientation. The aim of this paper is to identify, explicate and interrelate the critical factors of a strategic and holistic market-oriented succession process within Cypriot family-owned wineries. This empirical study was conducted through the perceptual lens of two key stakeholder groups: incumbents and family owners. And applied two methods, collected in two phases. The first included a survey with 52 family-owned wineries operating across the Republic of Cyprus, and the second encompassed 16 in-depth personal interviews with incumbents and successors from six wineries. The originality and novel theoretical contribution of the paper is twofold: (a) it employs, expounds and interrelates extant theories with solid empirical findings to provide a descriptively comprehensive understanding of the key market-oriented family business succession principles within Cyprus’s family-owned wine industry, and (b) it prescriptively develops the WineSuccess Framework®, which unequivocally intertwines 16 fundamental factors that contribute to the implementation of an effective market-oriented succession process in the same and comparable contexts.

Within a mesh of expectations: Dealing with dilemmas in business families using systemic tools from family coaching

AbstractBusiness family members face challenges related to exposure to diverse role expectations and systems logics, the management of which often results in situations of high complexity, dilemmas, and paradoxes. To address these issues, in this paper we combine key insights from social systems theory with systemic family coaching tools such as “internal maps,” the “expectation carrousel,” and the “tetralemma.” In drawing on an illustrative example from a family business succession planning context, we demonstrate how systemic approaches may help business family members to (a) creatively reflect on both the personal and interpersonal expectations they are confronted with and (b) manage issues of decision‐making in dilemmatic or paradoxical situations.