Life After Succession in the Family Business: Is It Really the End of Problems?

Abstract

The succession processes in family business are well chronicled in the business literature. Most of the research focuses on the process of transferring power within the business-family. What has not been as closely examined is the after-succession environment that exists when the management and leadership of the family business are passed on to the next generation. This article addresses that organizational climate and the potential for additional problems in the business-family if post-succession issues are not identified and addressed and suggests some steps that will be helpful in producing complete succession success.

Coping with Growth Transitions: The Case of Chinese Family Businesses in Singapore

“…New opportunities must be explored and new business practices introduced. The cases showed that the successors had to establish their leadership, overcoming the problems and conflicts that accompany succession that are reported by Harvey and Evans (1995). In the Chinese firms, it appears that the successors must assume the central entrepreneurial role that their predecessors occupied.…”

The Influence of Successor-Related Factors on the Succession Process in Small and Medium-Sized Family Businesses

“…Central to many literature reviews is the notion that the quality of the relationship between the outgoing leader and the successor is a critical determinant of the success of the succession process (Brockhaus, 2004, p. 169; Chrisman, Chua, & Sharma, 1998, p. 19; Dickinson, 2000, p. 70; Lansberg & Astrachan, 1994, p. 40). A high‐quality relationship is characterized by a high level of trust, mutual support, open and earnest communication, and the willingness to acknowledge each other's achievements (Harvey & Evans, 1995, p. 10; F. Neubauer & Lank, 1998, p. 142).…”

“…Goldberg (1996, p. 186), Harvey and Evans (1995, p. 12), and Hume (1999, p. 22) point out that not only the satisfaction of various stakeholders with the succession process defines a successful succession, but also the successor's ability to keep the family business healthy by means of sustained growth and continued profitability. Santiago (2000, p. 20), taking a more holistic view, argues that if the leadership transition was so smooth that the change did not disrupt the family or the business, then the succession could be labeled highly successful.…”

In the Founder's Shadow: Conflict in the Family Firm

“…The little empirical research on this subject yields conflicting findings. Some researchers argue that succession has disruptive and often negative consequences for an organization in terms of conflict (Gouldner, 1954;Grusky, 1960;Harvey & Evans, 1995), whereas other researchers (e.g., Guest, 1962) suggest the oppositenamely, that succession may actually reduce conflict. However, as yet, there are no explicit studies examining the impact of the continued presence of the founder postsuccession on organizational conflict in the family firm.…”