Family Business Continuity Research Articles

Development of a new concept and definition of inheritance risk management in family businesses toward sustainability

This paper examines how family businesses manage risks when transferring wealth across generations to ensure sustainability. It develops a thorough framework focusing on maintaining family legacies and business continuity. Key challenges identified include managing control, balancing interests, planning succession, preparing future leaders, and maintaining respect for leadership. The study uses a quantitative method to show that managing risks related to the owner's death is crucial. The findings suggest that managing inheritance risks and achieving successful transitions are vital for the sustainability of family businesses. Inheritance Risk Management (IRM) also helps mediate the impact of legacy risk management on sustainability. The paper recommends creating guidelines, launching awareness campaigns, offering specialized courses, and promoting family governance to improve business performance and social responsibility. Additionally, this research contributes to family business studies by enhancing understanding of inheritance risks and setting the stage for ongoing research and best practices development. These strategies aim to equip family businesses to meet current needs and future challenges effectively.

The ‘exodus’ from family businesses. How non-successor daughters form their entrepreneurial identity in the business families context

ABSTRACT Research suggests that business families may favour family members’ ability to act entrepreneurially and convey an entrepreneurial legacy to successors to ensure the continuity of family businesses. Nonetheless, families’ entrepreneurial imprinting can extend beyond successors, as non-successors can also pursue an entrepreneurial path. Little is known, however, about non-successor daughters’ entrepreneurial experiences outside of family businesses. Drawing on the family entrepreneurship field and adopting the identity work theory, this paper investigates non-successor daughters who decided to set up their own enterprises and analyses how they formed their entrepreneurial identities in the business family context. Based on the constructivist grounded theory, we analyse ten life story interviews with non-successor daughters and identify three processes through which they form their entrepreneurial identity: avoiding competition; defending; emancipation. Each process is articulated in three building blocks, i.e. Antecedents, Decision and Outcomes, and shows that daughters’ entrepreneurial identity can take shape through step-by-step processes in which interactions between daughters, business families and family businesses can occur differently, causing positive or negative effects at the individual, family and business level. In these processes, daughters’ identity work ranges from adapting to eluding families’ norms and expectations to forming their own entrepreneurial identity consistent with self-perception.

The role of in-laws in family business continuity: a perspective

PurposeThe purpose is to provide a brief summary on the current research development regarding the role of in-laws in family firms’ continuity. Additionally, I provide a perspective on the trends on the research regarding the in-laws involvement and influence in preparing future generations of family firms’ owners/managers. At the end, I conclude on what should be the relevant issues to be explored and researched in the future.Design/methodology/approachIn this paper, I review the literature on the role of in-laws on the family business continuity, particularly, I emphasize the involvement of in-laws in family firms. I found that this topic of family business continuity has not widely researched and the role of in-laws on the future of the family firm has been underestimated in the extant literature. I provide a brief summary on the trends related the involvement of in-laws in the family business continuity and, at the end, I give my conclusions on what should be a research agenda regarding this topic.FindingsDespite previous research, the question of the role of in-laws in family firms remains unanswered from the business-owning family perspective, nor from the in-laws’ perspective. The previous research has raised more questions on this topic. Clearly, the research landscape is vast, and scholars’ callings to find better ways to identify family members are totally justifiable.Originality/valueBased on the literature review, it can be argued that one of the topics with high potential for future research and development is related to the role of in-laws in the family business continuity, either because they are passively included as part of the family group, without acknowledgment on their involvement or because governance policies have formally excluded them. In this review, I highlight the influence of the in-laws in the family business continuity; particularly, their role in preparing future generations of family firms owners/managers and imprinting them with the family values, culture and believes.

The Family Protocol in Argentina. A Perspective from the Agency and Stewardship Theory and a Perception of Family Business Owners and Top Managers

This study seeks to examine the perspectives of family business owners and CEOs in Argentina on the necessary topics and elements to include in a family protocol that enhances family business continuity. Our model connects both Agency Theory and Stewardship Theory to the protocol with a focus on its impact on continuity. Data was collected through a survey completed by 220 family businesses in Argentina. Structural Equation Modeling was utilized to verify the model.The survey respondents' perception indicates that a family protocol aids the continuation of a family enterprise when it includes norms that diminish agency issues and promote stewardship behavior. Board formation regulation and family-business relation management are norms that lead to reducing agency issues. Thus, it is regarded as an efficient mechanism to avert or resolve conflicts without detrimental effects. Elements that endorse stewardship conduct include those that facilitate the emergence of a shared perspective, sense of membership, values, principles, traditions, and culture concerning both the content and the process. Accordingly, the two theories would be complementary.

Knowledge management practices and family businesses continuity in Edo State

This study investigated the role of knowledge management practices in mitigating family businesses failures. The specific objectives of the study are to investigate the effect of knowledge creation, knowledge sharing and knowledge storage on the continuity of family businesses. This research adopts survey method as its research design. The population of study are the entire family businesses in Edo state. However, the accessible population are 750 of family businesses established within the periods of 1980-2020 in Edo Central and Edo North senatorial districts. Seven hundred and fifty copies of questionnaire were administered to respondents from a sample size of 150 firms mathematically determined. With the aid of STATA software, the formulated hypotheses were validated using Pearson Correlation coefficient, the Ordinary Least Square Regression method at 5% level of significance. The study found that knowledge creation and knowledge sharing exhibit positive significant relationships with family businesses’ continuity while knowledge storage report a positive and insignificant relationship with the continuity of family businesses. This paper recommend among others that founders/owners should hire high caliber employees and embrace mentoring principles in its staff development.

Unveiling the triumph: the drivers behind entrepreneurial resilience among family wedding organizers in the context of the COVID-19 pandemic

PurposeThe existence of a wedding organizer plays an essential role in realizing the dream wedding of the bride and groom and the progression of a family-centred structure. The wedding organizer industry is one of the business sectors that experienced a significant impact during the COVID-19 pandemic due to various policies restricting mobility and interaction. This study aims to answer research questions: What challenges are experienced by wedding organizers in the context of COVID-19? What factors drive entrepreneurial resilience for family business continuity in the face of the COVID-19 pandemic?Design/methodology/approachThis study uses a qualitative research design through semi-structured in-depth interviews with eight wedding organizers in Indonesia with questions centred around the context of the family in the event.FindingsThis study found several challenges faced by wedding organizers, including personal barriers and environmental challenges due to the COVID-19 pandemic. The four drivers of entrepreneurial resilience of wedding organizers in dealing with the COVID-19 crisis include entrepreneurial motivations, entrepreneurial characteristics, firm strategies, and environmental support. These factors create a positive interaction effect for the continuity of the wedding event organizers.Originality/valueThis study contributes to the literature by providing valuable insights into the broader entrepreneurial resilience issue and offering practical recommendations for wedding organizers and other entrepreneurs facing similar challenges. This study has both academic and practical implications in providing event management guidance and future avenues of research in this field.

Intergenerational Interaction and Change Management in Agricultural Family Businesses: An Analysis from the Rational, Emotional, and Contextual Dimensions

Generational transition and change reflected in innovation are crucial for the continuity of family businesses. Most of the changes are made as the generational transition progresses, having at least two generations interacting. This study analyses change management in the context of intergenerational interaction to answer the question: How to drive change so that it takes place and generates positive results for family businesses? A multiple case study design was adopted to analyse three situations of change with a sharp contrast in their results in three agricultural enterprises. A framework that examines the rational, emotional, and contextual dimensions of change processes was used to explain the results. Change was found to be more easily accomplished when: i) a sense of psychological ownership encourages new generations to contribute new ideas; ii) change generates immediate and easily visible results; iii) the number of family members involved is low; and iv) the context provides funding opportunities. In turn, change produces positive results when it is preceded by open and cognitive conflict, and when the context offers opportunities to access knowledge networks. This work is a unique piece in the sense that it analyses the management of change during intergenerational interaction, an almost permanent situation that is little studied in innovation processes in the context of family businesses.

Peran Latar Belakang Keluarga Terhadap Keberlangsungan Usaha dan Kesejahteraan Pengrajin Perak di Kabupaten Gianyar

The silver industry in Gianyar Regency is a business that has been carried out for generations, so it is not surprising that Gianyar Regency is known as a center for silver crafts. However, currently the condition of silver handicraft SMEs is in a stagnant condition and even tends to decline, especially with the Covid-19 pandemic so that it can have an impact on business continuity and the welfare of craftsmen. The purpose of this study was to examine the effect of family background on business continuity and the welfare of silver craftsmen in Gianyar Regency. The population in this study is 235 silver handicraft IKM. The research sample was determined using a purposive sampling method resulting in a total sample of 95 silver handicraft IKM. This study uses descriptive analysis techniques and quantitative analysis techniques with structural equation models or Structural Equation Modeling (SEM), especially Partial Least Square (PLS) with an analytical tool, namely SmartPLS. The results showed that (1) family background had a significant positive direct effect on the sustainability of the silver craftsmen's business in Gianyar Regency; (2) Family background and business continuity have a significant positive direct effect on the welfare of silver craftsmen in Gianyar Regency; and (3) business continuity mediating the influence of family background on the welfare of silver craftsmen in Gianyar Regency.

Strategic Succession Planning and Continuity of Family Businesses in South East Nigeria

Strategic Succession Planning and Continuity of Family Businesses in South East Nigeria

Women’s entrepreneurial stewardship: The contribution of women to family business continuity in rural areas of Honduras

This paper examines the role of women in family business. Prior studies suggest that in Latin America the contribution of women in family business remains largely hidden, often relegated to a supportive role. Drawing on an entrepreneurial stewardship perspective, this study challenges that perception, paying close attention to the contribution of women to family business continuity. This study relies on a multiple case study design, and uses a critical approach to examine family businesses in rural areas of Honduras. We find that gendered norms are fluid, as women’s roles are multi-faceted being simultaneously influenced by household and family business logics. Thus, the contribution of women emerges specifically in terms of embracing a stewarding role, nurturing resilience, and shaping family and business networks. What our findings point to is that the contribution of women to the continuity of family businesses in Latin America, previously perceived as invisible and/or disguised, is enacted through a formal and visible managerial role, as well as an informal and discreet stewarding role. Implications for theory and practice, as well as opportunities for future research, are offered.

A Family Imprinting Approach to Nurturing Willing Successors: Evidence From Centennial Family Firms

A critical aspect for the continuity of family businesses (FB) is the existence of willing successors. In this article, we use the imprinting theory to ground an explanation of how the family imprinting process shapes siblings’ willingness to become a successor in the FB. We stylize three family imprinting types based mainly on different family motivations: the FB-centric, the entrepreneurship-centric, and the free-will-centric. The uniqueness of this approach is that it offers an imprinting-based process model capable of explaining the origins of homogeneity and heterogeneity in succession willingness at both the inter- and the intra-family levels.

Succession Planning and Family Business Continuity: Perspectives From Lagos State, Nigeria

Environment scrutiny has shown that family businesses are the common form of business in Nigeria and their going concern has generated academic debate and public discourse worldwide. Yet, the features orchestrating continuity in these family businesses are different and geographically diverse. One of the major issues to which this can be attributed to is the uncommonness of adequate succession planning practices. The objective of this paper is to examine the effect of succession planning on family business continuity in Lagos State, Nigeria. A survey research design was adopted for this paper with 503 selected SMEs operating in Lagos State as the target population. Taro Yamane sample size method was adopted and data was collected through the use of structured questionnaire adapted and validated for the study. The Cronbach’s alpha coefficient for the questionnaire items ranges between 0.850 and 0.775. The questionnaire response rate was 93.20%. The gathered data were analyzed using descriptive and inferential (Pearson product moment correlation and regression analysis) statistics. The analysis of the data revealed that succession planning had a significant effect on family business continuity (R=0.738, R2 =0.545, Adj. R2 = 0.538, F (78.821) =1.95); p<0.05). This paper concluded that, succession planning is pertinent to the enhancement of continuity in family businesses in Lagos State. The paper therefore, recommend that for family businesses to continue to perform and achieve continuity, succession planning must be put into strategic plan of the organization so that employees have adequate leadership competence and mentoring culture.

Improving continuity by simplifying the structure of family firms: a replication study

This study replicates a research undertaken in 2008 by Lambrecht and Lievens, Pruning the Family Tree: An Unexplored Path to Family Business Continuity and Family Harmony. Adopting an extended replication approach, this work analyzes a sample of family firms in Sardinia to investigate how and why family businesses prune the family tree to safeguard family harmony and business continuity. Our findings confirm that pruning is an effective strategy for managing complexity, increasing firm performance, and supporting succession plans. We extend the original study by stressing the relevance of pruning during succession.

“Over My Dead Body”: Wives’ Influence in Family Business Succession

The family business literature barely addresses wives’ influence in family business succession. Where it does so, the result is often tokenistic, stereotypical, and imprecise. Drawing on 34 in-depth interviews, this article makes three contributions. First, it identifies wives’ critical influence in family business succession through socialization across the life span of the family business; specifically, through normative, interactive, and experiential socialization. Second, it demonstrates the diverse dynamics and impact of wives’ influence on family business continuity. Third, it highlights the particular significance of experiential socialization, whereby changing expectations of marriage and family life have amplified wives’ influence in succession outcomes.

Management Succession and Entrepreneurship Business Sustenance

Succession planning has drawn substantial interest among researchers. Research reports designate deficiency of quality planning in the management of SMEs especially in developing countries like Nigeria and this constitutes a foremost limitation to the effective management of SMEs. Succession planning are fundamental to steady performance, sustainability and competitive advantage of SMEs. The objective of the study was to investigate the effects of HR planning/forecasting on family business continuity and also to examine the effect of workers education on survival of entrepreneur. 110 copies of questionnaire were administered to the employees in the five selected SMEs in Abeokuta Ogun state, Nigeria to get primary data that treated and tested appropriate research questions and hypotheses accordingly. Analysis of variance (ANOVA), correlation efficient and regression analysis was employed. The Yamane formula was used to determine the sample size. The test re-test reliability approach was adopted for the convenience of the researcher. Reliability was ensued by Cronbachs Alpha of 0.932. The data was analyzed using manual and electronic based methods through the data preparation grid and statistical package for the social sciences, (SPSS). The study found out that HR succession planning significantly assists SMEs to increase business continuity and Workers education significantly assists SMEs to increase business survival. The study recommends that organizational succession planning should be at regular interval as this will enable workers to know its importance and also business successors should be appointed based on merit so that the right and experience successors can manage the business.

Pengaruh Financial Technology, Succession Planning, Financial Self-Efficacy, dan Personality System terhadap Suksesi Bisnis Keluarga (Studi pada UMKM Bisnis Keluarga Sektor Non-Pertanian di Surabaya)

Business succession is critical to have for the continuity of family business. This research focuses on the non-agricultural MSMEs managed by families and located in the Surabaya because BPS data shows that the number of MSMEs in the non-agricultural sector in Surabaya is the highest compared to other cities in East Java Province. This research aimed to determine the effect of financial technology, succession planning, financial self-efficacy, and personality systems on family business succession. They are using a sample of 110 respondents of MSME owners from online and offline questionnaires. Data were analyzed using multiple linear regression and processed using SPSS 26. This research shows that the variables financial technology, financial self-efficacy, and personality system have a significant positive effect. In contrast, the variable succession planning has a significant negative effect. It is hoped that the Surabaya government can use the results of this research to improve socialization related to financial technology, financial self-efficacy, and personality systems for the succession of family businesses can be sustainable.

A Governance Approach of Emotion in Family Business: Towards a Multi-level Integrated Framework and Research Agenda

AbstractWhile emotion in family business is beginning to garner closer attention among researchers, the nexus of emotion management and governance has received little attention to date. In this essay, we reflect on and extend the Special Issue contributions by integrating the emotion management literature with the family business and governance literatures. We suggest a governance approach of emotion through a multilevel integrated framework. We introduce “emotion governance” as an overarching set of informal and formal mechanisms that are rooted and developed in the embedded family business contexts. We argue that emotion governance influences the explicit emotion management strategies of family business members at different stages:ex-ante(incentive alignment), during the process (education and support), andex-post(monitoring). It thereby contributes to ensure their accountability in line with family business continuity. Considering the heterogeneity of family businesses, we capture nuances in our framework across family business archetypes through a series of propositions. We chart an agenda for future research to advance the development of a theory of family business governance inclusive of emotion.

Keeping the farm business in the family: the case of farm and non-farm family businesses in the midwestern United States

Succession planning is a very crucial aspect of family business continuity. The successful transition of family businesses is especially important for small and medium scale family businesses which constitute the beginning phase of most businesses. This paper explores two critical aspects of succession planning, namely the decision to keep business ownership within the family and the transfer-readiness of family businesses. This study assessed potential correlates of these two constructs using data from small and medium scale farm and non-farm businesses in Midwest US. Results from a probit estimator showed that farm businesses were more likely to be kept within the family (P<0.01). For the full sample, the number of generations involved in daily management, the readiness of the senior management to delegate control, and the owner experience were found to be good correlates of the decision to keep the business within the family. For farms, we also found some correlation between the perception of the business as being successful and the decision to keep the business in the family (P<0.1). Results from the probit and bivariate probit models showed that capital and the number of generations in management are the most consistent correlates of transfer-readiness for the full and farm samples. Finally, we found that female owners of farm businesses were less likely to be ready for business transfers than their male counterparts (P<0.01).

Family entrepreneurship as a social resource for increasing employment of Russian families

The subject of the article is the poorly studied to date social phenomenon of family entrepreneurship as a type of joint labor activities of family members, which improves the family’s standard of living. The phenomenon of family entrepreneurship is considered from the standpoint of the sociological approach in four perspectives: as a social process, as a type of collective work activity, as a form of group economic behavior of family members as a small group, and as a form of educational work on the formation of children’s needs and working skills. From the perspective of gender sociology family entrepreneurship is considered as a type of gender-neutral entrepreneurship, in which all family members can participate, regardless of gender attribute, but with different degrees of involvement in a family business. A positive prerequisite for the development of family entrepreneurship in the Russian market is the active integration of women in business and the development of gender-oriented entrepreneurship (male and female) in Russia. Each of these types, with its own experience, specifics, and dynamics of development, has a positive impact on the spread of family entrepreneurship. Based on the method of content analysis the degree of actualization of public and scientific attention to the problem of family entrepreneurship, scientific approaches to its study and the potential for further spread are revealed. The findings of the content analysis are supplemented by the results of narrative interviews with entrepreneurs revealing the degree of their understanding of the essence of family entrepreneurship, its strengths, and weaknesses, risks, and potential, the attitude of entrepreneurs to increasing economic activity of family members. The assessment of factors hindering the development of family entrepreneurship, its prospects, and expectations of forms of government assistance to this process is provided. The social potential of family entrepreneurship, its educational role in the formation of children’s labor skills, and intergenerational continuity of family business are emphasized in the research.

The Successor Training as a Success Factor in the Management and Continuity of the Family Business

The formation of the successor is a process that begins at home from an early age, and its main objective is to preserve the family legacy and keep the company's administration in the hands of the family. The family business's continuity depends mainly on the training received by their predecessors' successors to replace them in business management when retirement them. A descriptive and cross-sectional study was carried out that identified the influence of the successors' formation to achieve success in business management and the family business's continuity. This study collected data from 15 family businesses located in southeastern Mexico. The data collection instrument used was a closed-order questionnaire that was validated using Pearson's correlation. The chi-square test of statistical independence generates the calculation of the dependency between the variables studied. The theoretical chi-square graph is the pair of variables that make up the hypothesis and its theoretical inverse function: p-value = 0.05 vs. chi-square of 1 degree of freedom to observe the intersection. In conclusion, the statistical tests yielded six variables more dependent on each other. Items three and four, four and one, and two and seven associated with 95% reliability in theoretical or critical chi and 100% reliability in observed or experimental chi. Therefore, these results found are statistically significant. It observed that the training of successors influences business management's success and the family business's continuity. This hypothesis verified an observed or experimental chi value of 5.2387 and a theoretical or critical chi of 3.8415.