To succeed or not to succeed: A multiple perspectives literature review of research in family business succession.
IFERA 2010, Scilly, 28th June-1st July, 2011.
Publisher's URL: http://www.ifera2011.com/
The literature on family owned businesses (FOBs) has highlighted the unique challenges that face this form of organisation, and one of the most important issues concerning the FOB is the challenge of management succession. According to a survey of 272 top executives of family firms done by Chua, Chrisman, & Sharma (2003), succession was found to be the number one concern. Succession is one aspect which gives FOBs their distinctiveness and is suggested by Ward (1987) to be a defining factor: “we define a family business as one that will be passed on for the family’s next generation to manage and control” (Ward, 1987: 252). Research indicates that although succession planning is one of the most significant factors that determine the continuity of the FOB from one generation to the next generation, many family firms do not plan succession (Dyer, 1986; Lansberg, 1988; Ward, 1987). The statistics show a bleak picture with only one third of family businesses surviving into the second generation, and only 10-15% making it into the third generation (Birley, 1986; Ward, 1987), with poor successions as the source of the problem (Le Breton-Miller, Miller, & Steier, 2004). Lansberg (1988) suggests that the decline of family owned businesses can have a wider impact on society with serious social and economical consequences. The continuity of family firms is of particular interest as they represent a significant proportion of employment and GDP in many capitalist countries (Ward, 1987). McGivern (1978) suggests that in the UK, management succession was almost equal to financial failure as a major cause of FOB failure, and according to demographic research carried out by Shanker and Astrachan (1996: 117), it is predicted that 3 million US family businesses alone will be forced to transfer ownership in the next 15 years, therefore the imminent challenge of effective succession planning is of great concern, which is reflected in the dominance of succession in family business studies (Brockhaus, 2004).
The literature is varied yet fragmented, therefore this review will organise the succession literature into four constructive themes analysing the research done on succession through the perspectives of the 1) individual, 2) organisation, and 3) the family, and 4) issues surrounding methodology will be discussed, and recommendations for further research for each perspective will be made. The aim is to highlight the unique multi-dimensional aspects that can implicate the succession process, and to integrate all the perspectives and stakeholders involved into a conceptual model that can capture the dynamic realities facing family firms in the succession process.
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