Family Business Succession Research Articles

The Effectiveness of the Inclusion of Governance as a Part of the Binding Articles of Association

This study investigates the efficacy of introducing governance as binding articles in the Articles of Association (AOA) of family businesses in Saudi Arabia, given the legislative reforms provided by the new Saudi Companies Law of 2022. The research points out that advantages will be brought by such enhanced transparency, accountability, and professional management practices, bringing family businesses up to international standards. Despite challenges such as resistance from family members, implementation complexity, and balancing traditional values with modern governance, the reforms provide substantial advantages. The case study of Saudi stock market companies illustrates the positive impact of phased governance reforms. Recommendations for successful implementation include engaging family members, leveraging external advisors, developing clear governance articles, providing training, and continuous monitoring. In all, these reforms serve as a giant stride toward ensuring that there is a strong, transparent, and sustainable business environment. This guarantees the long-term success and competitiveness of family businesses in Saudi Arabia.

Advancing Women Entrepreneurs: A Framework for Small Family Businesses Success within the Sustainable Economy

This article introduces the Holistic Enterprise Success and Sustainability Index (HESSI), a novel framework designed to enhance the success of women-led small family businesses (SFBs) in the context of a sustainable economy. Through a comprehensive literature review and theoretical exploration, this study articulates how women entrepreneurs' perspectives are intricately aligned with both familial values and business imperatives. HESSI employs a robust suite of indicators to measure financial robustness, societal contribution, environmental stewardship, and family solidarity—each meticulously refined to reflect the specificities of women-led SFBs. These indicators transcend traditional, financial-centric metrics, advocating for an expansive evaluation of success that considers economic performance alongside social, environmental, and familial well-being. Crucially, the HESSI framework incorporates women's familial insights, positioning them as a driver of internal cohesion and a pivotal element in integrating Environmental, Social, and Governance (ESG) principles. This broader vision of success metrics includes family unity and the perpetuation of legacy. HESSI promotes an all-encompassing approach to success evaluation that is grounded in gender perspectives, entrepreneurial agility, and a staunch commitment to sustainability principles. The discourse presented is a significant contribution to the fields of gender, entrepreneurship, and sustainable development, providing actionable insights into the vital role of women entrepreneurs in forwarding the sustainability agenda. It underscores the importance of advancing education, reinforcing policy frameworks, and fostering community solidarity to support and extend the reach of women-led SFBs, thus charting a course towards a more equitable and sustainable future in the business landscape.

Family business exposure and succession intention: the role of entrepreneurial self-efficacy and business performance

Understanding the next generation’s aspirations to inherit their parents’ business is critically important for securing intrafamily succession and longevity of the family business. Using a large dataset of 42,863 university students from 48 countries, we examine how the entrepreneurial self-efficacy (ESE) of youth moderates the relationship between family business exposure and succession intention. Our results indicate that a greater ESE enhances the influence of family business exposure on succession intention, while the effect of ESE is further moderated by family business performance, implying that this effect is greater in more (rather than less) successful family firms. By underscoring the role of both young individuals’ early engagement in the business and family business success, this study provides valuable implications for family firm leaders and the next generation that may assist in the design of more comprehensive policies for encouraging succession within the family.

Back to the nest: the practices employed for succession of heirs in family businesses in Brazil

PurposeThe present study aims to identify the practices employed to bring heirs into family businesses as successors.Design/methodology/approachWe conducted an exploratory, qualitative investigation using a case study approach. Semi-structured face-to-face interviews were conducted with external consultants and with incumbent leaders, next-generation heirs working in the firm (and likely to become successors) and employees from three family firms from different industries and under ownership and control of different generations of their respective families (first, second and third and fourth generations). In addition to surveying their general perceptions of the succession processes in their firms, each informant was asked to rate the degree of importance of 12 succession practices identified in the literature and the extent to which they exist in their respective firms.FindingsOur results showed that heirs typically enter the family business after a development process outside of the family business, which we have termed as coming back to the nest. This process was enacted through practices that we allocated to the following categories: continued development of heirs, developing relationships in the succession process, separation of roles and attitude of the successor heirs. Overall, 8 of the 12 practices derived from the theoretical framework were endorsed as important by representatives of the family businesses and 9 were endorsed by the consultants, 7 of which coincided in both groups. However, only 5 of the practices were identified as present in the firms’ succession processes by the representatives of the family businesses, while the consultants did not identify any of the 12 practices as present.Originality/valueWe present additional important practices, the adoption of which would be beneficial for family business succession, such as adapting external learning to the family business, acquiring leadership skills and experience and developing emotional intelligence. Our study advances the prior literature since we do not merely discuss succession planning but analyze in an applied manner how succession actually takes place in family businesses.

‘A life in the shadows’: Australian women and family business succession, 1910–2018

‘A life in the shadows’: Australian women and family business succession, 1910–2018

Business Transfers in Entrepreneurship Education: A Gap Covered by Buyer School and Successor School

Aging is a great challenge for European societies. When the time comes for the entrepreneur to retire, either a business transfer takes place or the firm ceases to exist. This means there is an increasing need for ‘takeover entrepreneurs’. Entrepreneurship education to improve entrepreneurial competencies or learn about starting a business is common in European HEIs, but there is relatively little attention given to family business succession as a career choice and practically none to entrepreneurship through acquisition. Entrepreneurship courses focus on starting a business, implicitly carrying the assumption that this is the sole way of becoming an entrepreneur or implementing a business idea. In this descriptive paper, a Buyer School and a Successor School developed by one university to bridge the gap is showcased and the rationale behind their development is discussed. The authors conclude that Successor and Buyer Schools show promise in closing the distance between HEI entrepreneurship education and the lived experience of entrepreneurial life. It is hoped that other HEIs are encouraged to offer similar courses or, failing that, to refer to takeover entrepreneurship in their other courses.

“Who Comes Next?”: Planning and Managing Sustainable Initiatives that Facilitate Family Business Succession

“Who Comes Next?”: Planning and Managing Sustainable Initiatives that Facilitate Family Business Succession

Not for Me: Parents’ Entrepreneurial Struggles and Children’s Family Business Succession

Not for Me: Parents’ Entrepreneurial Struggles and Children’s Family Business Succession

The Unseen Part of Successions: Exploring the Mental Well-Being of Family Business Successors

The Unseen Part of Successions: Exploring the Mental Well-Being of Family Business Successors

Exploring Key Elements for Achieving Intergenerational Family Business Succession in the Chinese Context

In the rapidly evolving Chinese economy, family-owned businesses, integral to the nation's GDP and innovation, face a significant challenge with an impending wave of intergenerational succession. With over 5.5 million such businesses, less than 20% have identified successors, and only 6% have established succession plans. This study examines intergenerational succession in these businesses, applying Handler's (1989) satisfaction and effectiveness framework, alongside Pyromalis et al. (2006)'s model. The research, conducted through interviews with second-generation owners, aims to uncover factors influencing succession satisfaction and effectiveness. Key findings highlight the unique impact of Chinese cultural values on the succession process. Unlike expectations, the reluctance of incumbents to relinquish control isn't a source of frustration for successors, reflecting the cultural emphasis on respect and deference to elders. The study broadens its scope beyond family dynamics to stakeholder relationships, acknowledging their importance in succession. This research merges theoretical and empirical analyses, adapting a Greek-tested model to the Chinese context, thus enhancing its global relevance. It provides insights into Chinese family business succession, shaped by cultural norms, and demonstrates the versatility of Western models in diverse cultural landscapes, enriching the understanding of global family business succession.

Investigation of the Relationship between Family Business Success and Marital Failure in Tanzania.

Investigation of the Relationship between Family Business Success and Marital Failure in Tanzania.

Professional Development as a Selected Factor Influencing Succession in Family Businesses

Theoretical background: Professional development plays a key role in succession in family businesses. Succession in family businesses means transferring control and ownership of the company from one generation to the next, and choosing the right successor is very important for the future of the company. Therefore, professional development can be a significant factor influencing this decision. Purpose of the article: The article presents professional development as a selected factor that affects succession in family businesses. Research methods: The primary research method chosen for data collection was a survey in the form of a questionnaire. The survey was done through a free online questionnaire – Google Form. This was intended to reach a wider audience from all over the country, so that the respondents would be as representative group as possible. The respondents were contacted through social media messaging and e-mail. This form of data collection was motivated by the desire to obtain responses primarily from young people. While 402 respondents participated in the survey, 305 responses were considered for analysis. Main findings: The following article presents the results of a survey on awareness of the importance of building a career path and professional development and the actual status of the implementation of plans. The survey also addresses issues of satisfaction with respondents’ current working conditions. The current shortage of workers in the labour market and the deepening demographic decline may cause a situation in which a successor does not become a single member of the immediate family. The best effect can be achieved by linking succession planning with the conscious and thorough construction of a career path and professional development based on the family business. The results of the paper relate to research analysing the career decisions of future managers, take into account the impact of the career path on professional development, and contribute to the understanding of the factors analysed in the succession process.

Green innovation in family business succession: Exploring decision-making under parent-child co-governance

This study investigates the impact of Parent-Child Co-Governance (PCCG) on green innovation within family businesses (FBs). Analysing Chinese A-share listed FBs from 2012 to 2020, we discover that PCCG FBs perform significantly worse in green innovation compared to non-PCCG FBs. Our findings indicate that FBs under PCCG encounter more substantial financing constraints and display lower risk preferences, both of which hinder green innovation. This study provides fresh insights into the strategic decision-making processes of FBs, particularly in the context of sustainable development. The results not only deepen our understanding of the PCCG model but also offer practical recommendations for FBs aiming to foster green innovation.

Thematic analysis of the experiences and perceptions of family business successors prior to their mantle of leadership in Nigeria

The experiences and perceptions of family business successors prior to their choice as the successors of their family business were explored to determine the qualities that attracted their choice as family business successors and how these qualities impacted their success since they assumed the mantle of leadership. Fifteen successful family businesses with successors controlling the businesses were purposively selected to suit the research goals. The selection was done through snowball sampling, while convenience sampling was used to select participants for face-to-face interviews. Each interview averaged 15 minutes. Thematic interpretive text analysis was performed on the data, and interviews were transcribed verbatim. Data were coded into categories, namely prior experience, training of the successor, education of the successor, passion, and commitment of the successor. Findings revealed that commitment without passion for the business might not be sustainable due to potential business challenges that could undermine commitment and focus. However, strong passion for the business could foster determination to succeed despite challenges. The family believed that education would guide the successor, providing exposure, confidence, and opportunities to bolster the family business image globally. Prior experience gave family business successors the confidence to settle down easily and meet family and community expectations, addressing challenges faster while maintaining business culture and capabilities. Community and family norms perceived education as essential in choosing a successor. Passion was a key success factor in choosing successors, and successors' passion grew upon realizing their formidable role in the family business.

Issues in family business succession and inheritance law

Issues in family business succession and inheritance law

Analisis Faktor-Faktor Yang Mempengaruhi Suksesi Keberhasilan Bisnis Keluarga

Family businesses are controlled by family members through blood ties or marriage and reflect characteristics such as family commitment, learning environment, reliability, spiritual strength, and dual leadership. Sustainability in family businesses is considered a core goal of business, but challenges arise from internal conflicts, generational differences, and adaptation to non-traditional methods. Heritage values and family traditions play an important role in in decision making. Factors such as inheritance for generations, risk management, and organizational culture also affect family business identity and performance. A literature review discusses preparation, family relationships, and planning as important factors in family business succession.

A conceptual framework of executive coaching in family business succession planning: the Malaysian context

ABSTRACT Family business succession planning receives much attention globally, but executive coaching remains underutilized. This applies to family-owned businesses; particularly challenging would be the survivorship of small and medium enterprises. Given the growing need for more effective succession planning, this paper aims to improve the existing executive coaching framework by applying it to family business succession planning in Malaysia. This conceptual article contains an accessible definition and presentation of executive coaching. Each framework component depicts the coach, coached person (‘coachee’), and organizational roles in the coaching, which leads to the possible leadership transfer outcome. This paper suggests a new succession planning direction for researchers and executive coaches. The planning direction aims to aid family business owners in understanding the executive coaching ‘what, why, and how’ and an alternative succession planning approach is suggested. The mechanism of executive coaching and the basis for novel family business research are discussed and established.

Exploring Customer Relationship Research in Family Businesses: A Scoping Review and Future Insights

This paper aims to demonstrate the relevance of customer relationship research in the context of family businesses, to structure existing literature, and to identify promising areas for further research. By conducting a scoping review of relevant peer-reviewed journal articles published from 2005 to 2021 and adhering to the Prisma protocol for enhanced transparency and quality, this paper underscores the pivotal role of customer relationship management in the success of family businesses, emphasizing a tendency towards conservative and traditional approaches. The owner-manager involvement, especially in the BtoB segment, is recognized as a distinct advantage, urging an exploration of specific strategies for managing customer relationships in both B to C and B to B sectors. Also, social capital is deemed crucial, extending its significance beyond customers to suppliers and employees, focusing on the influence of generational transitions on stakeholder relations. The imperative for deliberate relationship strategies during successions is emphasized. Moreover, the significance of customer orientation for success, impacting satisfaction, loyalty, and overall performance, highlights the necessity for empirical studies to gain nuanced insights. Additionally, consumer behavior towards family businesses, shaped by the communication of familial identity, underscores the need for further research on diverse communication approaches. Lastly, acknowledging the positive impact of corporate social responsibility practices on loyalty and reputation in family businesses underscores the call for context-specific investigations, taking into account corporate social responsibility reporting regulations across countries.

Exploring Customer Relationship Research in Family Businesses: A Scoping Review and Future Insights

This paper aims to demonstrate the relevance of customer relationship research in the context of family businesses, to structure existing literature, and to identify promising areas for further research. By conducting a scoping review of relevant peer-reviewed journal articles published from 2005 to 2021 and adhering to the Prisma protocol for enhanced transparency and quality, this paper underscores the pivotal role of customer relationship management in the success of family businesses, emphasizing a tendency towards conservative and traditional approaches. The owner-manager involvement, especially in the BtoB segment, is recognized as a distinct advantage, urging an exploration of specific strategies for managing customer relationships in both B to C and B to B sectors. Also, social capital is deemed crucial, extending its significance beyond customers to suppliers and employees, focusing on the influence of generational transitions on stakeholder relations. The imperative for deliberate relationship strategies during successions is emphasized. Moreover, the significance of customer orientation for success, impacting satisfaction, loyalty, and overall performance, highlights the necessity for empirical studies to gain nuanced insights. Additionally, consumer behavior towards family businesses, shaped by the communication of familial identity, underscores the need for further research on diverse communication approaches. Lastly, acknowledging the positive impact of corporate social responsibility practices on loyalty and reputation in family businesses underscores the call for context-specific investigations, taking into account corporate social responsibility reporting regulations across countries.

Gender Bias in Succession in Family Companies: Theoretical Analysis With Application to a Portuguese Region

In this paper we analyse the problematic of succession in family businesses, and we specifically address the situation of women within that process. The problem is important because, in one hand. family business are among the most prevalent in the economy, and because, in the other hand laws, and rules define gender equality as a very important social rule. We first make a literature review on the topic using the SCOPUS database, and after we detail the results of study made in the Portuguese region of Madeira Island. We conclude that, rather surprisingly, women are discriminated in succession, and this reality has been described in theory and in same empirical studies, and is confirmed, sadly, in our study about Madeira Island. The implications of these results should be great – it is of no use having all the laws published if they are not enforced and women are still harmed and discriminated in such an important social matter. The limitation of this study is that the sample we use in the study is small, but we would underline that the findings of our study are very much aligned with previous ideas. It seems that the old fashioned sexism so well described by Beauvoir in the middle of last century (Beauvoir, 1949) is still a fact. With those results we wonder if that sexism, culturally ignited and learnt as it, can be eliminated. Finally the paper is original because we first make a literature review and then present a case study that illustrates this theory.