One of the most significant challenges to enduring family businesses is the process of passing the leadership of a firm from one generation to another. This article introduces game theory as a model for examining succession as a set of rational but interdependent choices made by individuals about a firm’s leadership. Its primary contribution is demonstrating the application of game theory to understanding the decisions and outcomes of succession events.

anagers face many challenges as they move through strategic and budget planning processes. Planning takes considerable time, and time spent in meetings or with spreadsheets distracts managers from their regular responsibilities. Some managers may even use the planning processes to achieve outcomes that create more personal benefits than advantages for the firm. For instance, during budgeting processes, managers may sandbag their projections in hopes of making bonuses easier to achieve, or they may inflate their projections to wrap up a lion's share of new capital expenditures. Others may perceive the entire budgeting process as just a poker game, replete with bluffs and big bets. This article highlights one specific problem with conventional planning processes: strategic planning and budgeting are often out of step with one another. In too many cases, budgets for allocating and spending money have little connection with business or operational strategies.

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Even though most SMEs operate in established industries, managers of these firms are not impervious to the fast‐moving changes in today’s business world. The author undertook a survey of SMEs to learn more about how they approached innovation. He found that, for innovation to pay off and become real, it must be nurtured and developed through top management commitment, the attention of smart and dedicated people, and tight integration between innovators and the firm’s strategic management.