Family Business Succession Research Articles

ENTREPRENEURSHIP AND FAMILY BUSINESS SUCCESSION IN GREECE

The aim of this article is to gather quantitative and qualitative data on the current state of family business succession and transfer in Greece, as well as to record the current demands and needs for business support during the succession process. The sample of enterprises participating in the research comprised of 130 companies from various business sectors, sizes, and locations in Greece, classified by their number of employees. The research work aims to depict the current situation by showcasing testimonials of entrepreneurs/business owners, representatives and executive members of enterprises with regard to business succession. The findings of this study can be used to draft proposals and make policy recommendations, as well as to build a database to prepare and implement a succession business plan, with the ultimate goal of developing new strategies to strengthen and support the family business succession in Greece.

SUCCESSFULLY PREPARING DAUGHTERS AS SUCCESSORS IN FAMILY FIRMS

Drawing on insights from the family business succession and mentoring literature, we examined the preparation process for daughters as successors in family firms in the United States. In-depth interviews were conducted with eighteen daughters and their parent mentors (nine mothers and nine fathers) using a qualitative case study approach. We identified a reciprocal social exchange process between parent mentors who provided resources and daughters who acquired the knowledge to become successors in their family firms. Significant elements in the preparation process included: positive childhood experiences, choosing and earning a relevant college degree, the daughter’s autonomous decision to enter the family firm, guided on-the-job training, and counsel and advice to overcome the crucial issues of male gender bias and the burden of childcare responsibility. The significance is highlighted of differences that exist between mothers and fathers as mentors regarding understanding the daughters’ position in the firm and communication.

가업승계와 승계유형이 기업의 이익조정과 조세회피에 미치는 영향

Succession in family business by inheritance or gifting of the ownership plays an important role in the economic development by maintaining company’s sustainability through the transfer of internal business expertise and accumulated technology. Nevertheless, the ownership transfer process in the Korean family businesses has largely been hindered by the imposition of a high inheritance tax. In this context, this study analyzes the level of earnings management and tax avoidance before and after the ownership succession in these companies. In particular, the family business succession is classified into ownership succession and management succession in order to highlight the difference in the level of earnings management and tax avoidance. The study conducts a multiple regression analysis for a sample of 9,361 firm-year observations of external audit companies from 2004 to 2018 to present the following results. First, the level of earnings management falls after the succession of family business. Second, the decrease in the level of earnings management after succession is greater for the ownership succession than for the management succession. Third, there is little impact on the level of tax avoidance by the succession of family business. Lastly, the ownership succession in family business tends to be accompanied with higher level of tax avoidance than the management succession. These results suggest that family business succession is likely to lead to stable management performance in the long-term perspective, while the taxable benefits in the succession process may not be effective for the Korean family businesses. In addition, it is suggested that the levels of earnings management and tax avoidance can be differed by the type of family business succession because succeeding managers tend to pursue different goals depending on the type of succession. This study will provide useful information to various stakeholders regarding family business succession and encourage the smooth transmission of family businesses to the younger generation in Korea.

Relationship coordination between successor and top management team in family business under the background of social embeddedness: a case study of trans-generational entrepreneurship

PurposeAiming at the key issue of interpersonal interaction process between successors and top management teams in the context of family business trans-generational entrepreneurship, this paper aims to explore the motivation, action and results of interpersonal conflict between these two subjects mentioned above.Design/methodology/approachThis paper uses grounded theoretical research methods based on the research objects of three family businesses with both inheritance and transformation needs.FindingsMotivation difference, mediation mode and relationship utilization, that is, the successor and top management team take the goal-orientation, interest orientation and rational tendency as the starting point for relationship coordination. Then it mediates the interpersonal conflicts through compromise, collaboration and compliance, and ultimately provide successors with resources, opportunities, capabilities and motivation advantages to promote trans-generational entrepreneurship. Second, the path of relationship coordination comes from the background of social embedding, that is, the motivation difference comes from the embedding of motivation seeking, the mediation mode comes from the embedding of mediation elements and the relationship utilization comes from the embedding of relationship optimization. The research conclusions not only provide a theoretical framework for family businesses to solve the problems of interpersonal conflicts faced by family businesses but also have practical guiding significance for the trans-generational entrepreneurship.Originality/valueThere are two theoretical contributions in this study. First, the research starting point of social embeddedness theory from the perspective of interpersonal relationships at the microlevel is revised. Since Granovetter (Granovetter, 1985) put forward the theory of social embeddedness, its research scope has been gradually expanded, but the mainstream research in the past focused on analyzing the social network embeddedness of enterprises to obtain social capital from the macro- and meso-level (Nahapiet and Ghoshal, 1998). In fact, this may deviate from the essential interpretation of Granovetter’s theory of social embeddedness, while this study returns to the study of interpersonal relationships. Second, a theoretical model of relationship coordination for successors and top management team is put forward in general. On the basis of the motivation, action and result of interpersonal interaction between the successor and top management team, the interpersonal coordination action path and embedded logic during trans-generational entrepreneurship of family businesses are revealed, which enriched the research scope of social embedded theory in family business.

Influence of Successors’ Entrepreneurial Competencies on Performance in Family-Owned Small and Medium Enterprises in Arusha City, Tanzania

This paper examines attributes of successors’ entrepreneurial competencies such as risk-taking propensity, ability to exploit business opportunities, innovation and commitment in family businesses in Arusha City, Tanzania. A cross-sectional research design was employed using a quantitative survey approach, in which two hundred family business successors provided data for this paper. The data were analysed using the Hierarchical Regression Model to assess the influence of successors’ entrepreneurial competencies on the performance of family-owned SMEs. The findings indicate that successors’ risktaking propensity and the ability to exploit business opportunities influence the performance of family-owned SMEs. The paper concludes that familyowned SMEs managed by successors who can take calculated risks and are also able to exploit business opportunities are in a good position to realize better performance in terms of net profit. It is recommended that family business founders should build their successors’ entrepreneurial competencies.

Perceptions of succession planning in family-owned businesses

ABSTRACT India has the third highest number of family-owned businesses (FoBs) globally, yet their intergenerational survival is at risk. The country faces a steep decline in female labor force participation and a “youth bulge,” with 54 percent of the population below the age of 25. The postpandemic era has necessitated the need for small and medium-sized enterprises to reinvent themselves to adapt to the fast-paced digital landscape. The perceptions of human capital and the inclusion of women in family business succession planning are often ignored. The aim of this study is to investigate the relationship of nonfamily employees and gender inclusivity on the survival of family-owned businesses. The authors propose a more inclusive culture in the FoB landscape as they undertake an ethnographic study to review literature between 2017 and 2022 while highlighting the impact of organizational culture to achieve gender egalitarianism and aid the United Nations Sustainable Development Goals.

The Effects of Family Firm CEO Political Ideology on Successor Choice

Integrating upper echelons theory and socioemotional wealth (SEW) literature, this study examines how family CEOs’ political ideology influences their decisions on family firms' successor choices. Using donations records to measure CEO political ideology, we test our ideas on a sample of 157 family CEOs from S&P 1500 firms from 1991 to 2021. We show that a family CEO's political ideology regarding conservatism has a significant positive effect on the probability of choosing a family member as a successor. In addition, the SEW endowment (family control and management) mediates the positive relationship between CEO conservatism and intrafamily succession. By showing that CEO political ideology manifests in family business succession, we contribute to research on family business succession, CEO political ideology, SEW, and upper echelons theory.

Cut or Close in? Examining Social Relations from Stakeholders Perspective Towards Family Business Success

Stakeholder social support is integral to the thriving of the succesors in a family business. The paper aims to develop an understanding about the provisions of social nudge that influence the support of stakeholders (viz., life partner, investor, community of entrepreneur, expert, venture partner and employee) towards the role of successor in the family business. Implicit in many discussions of congruence of gender roles and job roles is the idea of perceived incongruity between the female gender role and leadership roles. We address whether this intuition is supported by the empirical data in the context of 218 family businesses i.e., 1,308 stakeholders. The role is understood in terms of the gender role congruity of the successor, in simple words, the effect of the gender of the successor in shaping the social support from stakeholders. Network Relationship Inventory-Social Provisions Version (NRI-SPV) (Furman & Buhrmester, 1985) is used to conceptualize social provisions and thus, is used to measure stakeholders’ social nudge. The results imply that social nudge comprises of antagonism as negative quality and affection, nurturance and reassurance of worth as positive quality. The positive and negative social nudge by the stakeholders along with the gender effect determines the support of stakeholders towards the family business successor. Moderation analysis further reveals that gender influences the stakeholders’ positive and negative qualities.

Contradictions between Founders and Successors in Taiwan’s Family Business Inheritance: A Qualitative Study

Abstract The family business is among the oldest forms of business organization. Taiwan’s family businesses have been continuously operating with family control for decades. This study investigates how to reduce future barriers to succession and especially to focus on the issue related to existing contradictions between founders and successors. This study adopts a qualitative research, carrying out in-depth interviews with four aspects composed of succession plan, connections and conflicts, willingness of successor, and competence of successor, and using four pairs of father and son as our research sample. By exploring how high-quality relationships could be developed between next-generation family businesses’ leaders, the findings result of this study contributes to a finer-grained understanding of successful intergenerational succession in SME family businesses. JEL classification numbers: B55, C83, L21. Keywords: Family business, Inheritance, Succession plan.

Avoiding the Best Practices Trap in Family Business Succession

Avoiding the Best Practices Trap in Family Business Succession

Developing and Sustaining a Successful Family Business: A Solution-Focused Guide by Louis Cauffman

Developing and Sustaining a Successful Family Business: A Solution-Focused Guide by Louis Cauffman

Intergenerational succession mode and selection mechanism of female successors in Chinese family businesses

This study explains the modes of intergenerational succession by female successors in Chinese family businesses and the selection mechanism. In view of the family businesses to which females (daughters) belong, this paper proposes five types of intergenerational succession modes of family businesses, namely the kindred-based succession by the daughter, kindred-based succession by others, joint succession by the daughter and her siblings, joint succession by the daughter and her husband (son-in-law), and succession by a professional manager. By means of case analysis, this study also explores the driving forces for choosing a proper model from the above five succession modes, including family structure, the father’s and business owner’s attitudes, and the daughter’s attitude toward succession, etc. This paper contributes to the domain of the intergenerational succession mode by ‘female (daughter) successors’ in Chinese family-owned businesses theoretically and practically.

Model for the success of family business succession in Bangkok and its metropolitan

Family businesses in Thailand are part of the country's economic development and are essential for Thailand's GDP. For many years, the family businesses have been strengthened by a family constitution that focuses on the succession of the business to a new generation that comes from family members. The study was conducted in Bangkok and its metropolitan to assess the considering factors that impact the business success of the family. The leaders of the traditional family business have no business succession planning, their successors lack potential, and they have no positive attitudes towards the family business. As a consequence, the succession of the family business was unsuccessful. Both quantitative and qualitative methods were utilized to achieve this study’s set objective. This study used multi-stage sampling as a quantitative research method. The sample comprised 560 people who were heirs of family business entrepreneurs from the second generation to the present age in Bangkok and its metropolitan areas. The study results found that the technology, innovation, attitude of family members, responsibility of family members, leadership, potential, and family constitution significantly participate in the family business succession process. The study contributes practically and also to literature.

Family Business Succession Planning at PT. X

The purpose of this research is to know succession planning from the second generation to the third generation in PT. X. This research is descriptive quantitative, which is research that produces descriptive data in the form of written or spoken words from informants and understands the behavior of individuals and groups that can be observed. The data obtained were collected and analyzed by interview and observation to six informants from PT. X is three of the second generation, and three of the third generation with triangulation analysis techniques. The result of this research the role of succession in the third generation of PT. X which includes pre-succession, succession planning, and succession management is already at the pre-succession stage that can support the sustainability of PT. X so that the company's condition can run well.

Quantitative and Qualitative Inquiry into Family Business Succession Planning

Quantitative and Qualitative Inquiry into Family Business Succession Planning

Complexity of Family Businesses in El Salvador: A Structural Equation Model

Family businesses play an important role in sustainable development in Latin American countries, providing economic benefits and leading to a reduction in violence. Until now, family businesses, their characteristics, and the factors that influence their economic development have not been studied in this region. Identifying the appropriate variables contributing to successful family businesses in this region and clarifying the relationships between these variables are important for developing a management model that supports the stability and growth of these businesses and their influence on sustainable development in the region. To this end, this study aims to understand the complexity of family businesses classified as small and medium-sized companies located in San Salvador, El Salvador. This study represents a first approximation and application of this model in one of the representative economies of Latin America. Our literature review allowed us to establish a basic management model incorporating the complexity of family businesses in this regional context. Using a partial least squares structural equation model (SEM-PLS) and a database of 181 family firms, we identify the variables that best explain the management model through the following structures: financial management, business management, family complexity, and company complexity. The results show that in conditions where high interest rates coexist with political conflicts and a complex economic situation, family businesses constitute a pillar for the development of the country towards sustainability. This study has practical implications for entrepreneurs and professionals. This research proposes a management model that allows us to identify the variables that increase or decrease the complexity of family businesses and guides entrepreneurs in taking concrete actions to reduce this complexity. In general terms, this model explains that financial performance depends on business management, the complexity of the family, and the complexity of the company. Finally, based on the results obtained in El Salvador, a clear direction for future research is established, through which it is possible to study the variables that may reduce the complexity of the family and the company in other countries with similar socioeconomic characteristics.

Entrepreneuring as emancipation in family business succession: a story of agony and ecstasy

ABSTRACT Following Alistair Anderson’s legacy of entrepreneuring as a process of becoming, this paper engages with entrepreneuring as emancipation in a family business context. Over a period of seven years, we witnessed the journey of a family business successor engaged in a challenging process of power transfer, ultimately leading him to leave the succession process to engage with entrepreneuring outside the family business, due to power struggles. We theoretically elaborate on this real-time, multi-informant, multi-generational and longitudinal single-case study to offer a novel understanding of entrepreneuring as emancipation from and through power by revealing the intimate connections of entrepreneuring with power, liberation and liberty encompassing as much agony as ecstasy.

Stakeholder identification and prioritization: The attribute of dependency

Stakeholder identification literature states that stakeholders with power, legitimacy and urgency over an organization should be prioritized. But, how can stakeholders be identified and prioritized when they lack awareness of organizational strategies? Unawareness, evident in internal issues, results in some stakeholders not having urgent claims and thus not considered priority stakeholders. To fill this gap, we draw on Resource-Dependency theory to introduce the operational attribute of resource-dependency. Our theorization is explored in the context of business succession in family businesses (FB). We examined and compared owners' views, against other stakeholder groups deemed, by them, important for the success of their organization. We used a multiple-case study design to study six Australian food manufacturing FBs. We found that stakeholder identification and prioritization accuracy improve when driven by the nature of the managerial issue (i.e., succession over market expansion) and the analysis of the organization’s levels of dependency on key individual stakeholders.

Immigration and Entrepreneurship in Chile during the Nineteenth and Twentieth Centuries

ABSTRACT Based on census records (both of total population and commercial-industrial), and an extensive review and synthesis of the secondary literature, this article analyses the importance and impact of immigration on the economic development of Chile, in particular on entrepreneurship and the changing composition of the main business groups of the country. We provide a sketch of the main entrepreneurs among the immigrant groups, according to countries of origin and sectors in which they operated, who emerged as influential modern entrepreneurs in the country during the nineteenth and twentieth centuries. We also show how some of these foreign entrepreneurs (and their descendants) contributed to the renewal of the economic elites of Chile during these two centuries, by focussing on some case studies of the leading members of the most successful family business groups.

Keberhasilan Transfer Pengetahuan dalam Suksesi Kepemimpinan melalui Pembelajaran Intergenerasional

<p><em>Succession process of the next family business generation becomes an interesting phenomenon </em><em>to be developed together with the process of adapting organizational knowledge. Organizational knowledge transfer is a difficult process in leadership succession. There are many factors that must be prepared in advance so that the business can achieve sustainability. This study uses a qualitative approach through in-depth interviews with several generations of successors in family businesses in Yogyakarta whose business scale is relatively the same. Triangulation of sources and member checks are carried out to ensure the validity of the data from this study. The result is that intergenerational learning has an important role in the succession process of family business leadership. Knowledge transfer in family business succession through intergenerational learning will facilitate the next generation in the process of adaptation to continue the previous leadership</em></p><p> </p>