Mapping the successful succession process in family firms: evidence from Greece

Abstract

The succession process in family firms has by far been determined to be the most critical phase in the family business life-cycle (e.g. Morris et al. Journal of Business Venturing 18:513-531, 1997;Wang et al. 2000) and characterized as the period in which most family firm fatalities occur (Handler and Kram Family Business Review 1: 1988). This paper is an empirical study on Greek family firms and seeks to identify the critical success factors that have a major impact on the outcome of a generational transition in the leadership of the family firm. Based on an integrated conceptual framework proposed by Pyromalis et al. (2006), we test the impact of five factors, namely the incumbent's propensity to step aside, the successor's willingness to take over, the positive family relations and communication, succession planning, and the successor's appropriateness and preparation on both the satisfaction of the stakeholders with the succession process and the effectiveness of the succession process per se. The results provide a useful insight and confirm the importance of the aforementioned factors in the succession process by mapping a safe passage through the family business succession process, and by contributing not only to the overall family business literature but also generating strong arguments in favor of the family firm as an integral entrepreneurial element for a region's sustainable economic development.

Reducing the Hindering Forces in Intra-Family Business Succession

“…Previous literature has identified a long list of characteristics and factors that affect the process of succession and specifically the five critical success factors above identified by Pyromalis and Vozikis (2009). In the only research piece we found focusing specifically on the hindering forces of succession (Massis et al, 2008) it was asserted that there are three direct explanations and conditions inhibiting a successful intra-family succession in terms of effectiveness and family satisfaction with succession.…”

“…According to (Pyromalis and Vozikis, 2009), the successful succession process whether intra-family or extra-family, i.e., outside the family, entails succession effectiveness and satisfaction with succession by the rest of the family and nonfamily members. Their model focuses on five critical success factors that can influence and assist to a great extent the outcome of the succession process in a family firm: (1) The incumbent's propensity to step aside, (2) the successor's willingness to take over, (3) positive family relations and communication, (4) succession planning and (5) the successor's appropriateness and preparation (Fig.…”

“…These three direct conditions are directly or indirectly included into the (Pyromalis and Vozikis, 2009) conceptual model which pertains to any successful succession whether it is an intra-or extrafamily succession process, therefore it was decided that for this study purposes the broader (Pyromalis and Vozikis, 2009) conceptual framework will be employed rather than the narrower (Massis et al, 2008) model. This research will blend both theoretically and empirically the two conceptual models of (Pyromalis and Vozikis, 2009) assisting critical success factors and Massis et al (2008) inhibiting conditions as antecedents which impact the effectiveness and satisfaction with the succession process and in turn ultimately thwart or create a successful intra-family succession in a family farm. Our rationale lies in the study by psychologist Kurt Lewin who proposed in his seminal work on force field analysis (1937) that our chances of accomplishing something can be increased if we focus on reducing the factors that prevent the event from occurring rather than increasing the strength of the factors that assist this event (Fig.…”

Determining the contributory factors to successful succession and post-succession performance of family-owned SMEs in South Eastern Nigeria

“…Succession planning is very important in minimizing the risks inherent in transfer and continuity of the family business (Mejbri & Affes, 2012). It increases the level of satisfaction of the stakeholders as well as the financial performance (Amran & Ahmad, 2010;Nordqvist, Wennberg & Hellerstedt, 2013;Pyromalis & Vozikis, 2009;Sharma, Chrisman & Chua, 2003). The incumbent initiates and influences the succession process.…”

“…Successful succession is a function of the incumbent's willingness to plan for succession, progressive delegation of authority, acceptance of clearly specified roles, the incumbent's willingness to step aside, continued family involvement, and the successor's willingness to succeed. Most importantly, the selected potential successor must imbibe and exhibit behaviour which the incumbent desires and appreciates (Amran & Ahmad, 2010;Lansberg & Gersick, 2015;Pyromalis & Vozikis, 2009).…”