Socialization Patterns of Successors in First- to Second-Generation Family Businesses

Abstract

This paper focuses on the socialization of potential successors in family business and attempts to relate this process to values that founders intend to convey to the next generation. We found that founders' values condition potential successors' socialization and that there are two different phases common to all socialization processes. The first stage, characterized by family socialization and common to all founders' descendants, comprises value transmission and training. The second stage is characterized by business socialization and reserved only for the founder's potential successors. We also identified two models of socialization that pursue two different aims: (a) the Founder Homosocial Reproduction Model and (b) the New Leader Development Model. These socialization models are consistent not only with values that the founder intends to convey to potential successors but also with the founder's own business perception. We present and explain the distribution of these two models according to each group of founders. Finally, we reveal the content of what we call the founder's dependence paradox and the effect on the next‐generation socialization process.

Exploring the connections among spiritual leadership, altruism, and trust in family businesses

“…According to family business literature, love, and hope are witnessed if familiness is considered (Eshel et al 1998;Simon 1993) and are important matters for altruism and trust within the family, which, in turn, are also important factors to gain legitimacy in both family and business contexts to become a future leader (Garcia-Alvarez et al 2002;Chrisman et al 1998;Goldberg 1996). All of these components are very similar to the case with spiritual leadership (Eddleston and Kellermanns 2007), which is also expected to include altruism (Fry and Cohen 2009) accompanied by love and hope (Fry 2003).…”

“…Accordingly, most studies on the subject of family business leadership focus on succession (Sharma et al 1996), and the successor is usually a family member from the next generation (Handler 1994). In this case, the future leader, the successor, has to claim his/her own legitimacy not only within the business, but also within the family (Garcia-Alvarez et al 2002), with the current leader considered particularly (Dyer 1986). This trust-based legitimacy may be related to the future leader's financial contributions to the business (Goldberg 1996), the family's evaluation of the future leader's decisions about business issues and behaviors towards workers (Garcia-Alvarez et al 2002), the future leader's faith in the family business (Chrisman et al 1998), and the success of the current leader's mentoring of the future leader (Alayoglu 2006).…”

“…This plan is vital for business sustainability (LaChappelle 1997) because family members' business leadership is perceived to be parlous, as a source of conflict among family members (Finney 1999;Covin 1994;Handler 1990). To overcome this conflict, family constitutions that explain each family member's duties, responsibilities, and authority towards the business (Ankara Chamber of Industry 2005), co-leadership (Lansberg 1999), and the socialization of the future leader in the business environment (Garcia-Alvarez et al 2002;Iannarelli 1992) have been suggested.…”

“…Family business literature emphasizes leadership for sustainability (LaChappelle 1997) and contends that the selection of an appropriate leader is also vital to avoid intra-family conflicts (Garcia-Alvarez et al 2002;Covin 1994). An important feature of family business leadership is its strong dependence on mutual trust between the leader and the family members to avoid conflict (Cater 2006).…”

A study on the influence of family on family business and its relationship to satisfaction with financial performance

“…The successor, conversely, is already able to influence the business with his or her title as successor. The successor is also able to obtain shares from business activities by initiating employment at any position in the business [25], [26]. In time, the successor can become sufficiently qualified to take control of various business issues as he or she acquires knowledge and experience and subsequently increases his or her role in business activities [40], [46], [56].…”