Differences in management styles, levels of profitability, and performance across generations, and the development of the Family Business Success Model

Abstract

Purpose The purpose of this paper is to, first, investigate the differences between generations in family businesses and, second, develop and verify the Family Business Success Model ability to improve the probability of business success measured by perceived profits, growth and meeting the owners’ expectations. Design/methodology/approach Data were collected through questionnaires and personal interviews. Overall, 98 usable questionnaires were collected for statistical analysis with a response rate of 82 percent. Findings One-way ANOVA hypotheses testing of the variables found four significant differences between generations. Regression analysis found the Family Business Success Model to be significant. Family business owners can improve the probability of success by utilizing a team-management decision-making approach, effectively handling conflict effectively, formulating specific succession plans, developing strategic plans, using sophisticated financial management methods, dealing effectively with the founder’s influence and if they seek to grow, they should consider going public. Practical implications This study provides family business owners, managers, educators and public policy makers with the means to help family businesses survive and grow effectively throughout generations by using the Family Business Success Model. In addition, this study can help consultants and advisors of family businesses to understand the differences between the first, second and third generation family businesses from a holistic perspective and help them implement the family business model. Originality/value This study contributes to the literature as one of the few studies in the Lebanese emerging market that examines how the first, second and third generations of family businesses differ. More importantly, it develops a Family Business Success Model that improves the probability of success.

Passing on the legacy: exploring the dynamics of succession in family businesses in Pakistan

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“…From the strategic management point of view, these differences in strategy, structure, and goals must ultimately affect performance to be cogent (Chrisman et al, 2005). Several authors discovered a generally positive influence for family top management involvement on performance ratios (Basco & Rodríguez, 2011;Brenes et al, 2011;Maury, 2006;Sreih et al, 2019). In regard to these literature, the question of the study is to investigate whether the ownership and management structure of family business leads the business to higher performance or not?…”

The nexus of aging in family businesses

“…As to the family business survey of PwC ( 2016), the report indicates that only over 30 percent of all family enterprises ownership transfers the business to the successors. Given that, the succession, is a dynamic process by means of transferring the hold of the family business economy to a new successor (Yedder, 2018;Sreih et al, 2019) generally. Moreover, the sustainable growth of family businesses is to a large extent depended on the psychological motions of the parent founder toward the business objectives and employability of a suitable successor as the subsequent CEO (Camfield and Franco, 2019).…”

“…As to the family business survey of PwC (2016), an estimate indicates that only over 30 percent of all family enterprises ownership transfers the business to the successors. Given that, succession, in general, is a dynamic process to transfer the hold of family business economy to a new successor (Yedder, 2018;Sreih et al, 2019).…”