Succession in family versus nonfamily SMEs: What influence does it have on performance?

Abstract

The literature on family SMEs usually shows a negative influence of succession on performance. Based on a behavioural approach, we identify several advantages of intrafamily succession that enhance value creation. In order to confirm the positive impact of intrafamily succession on performance, a matched pair research design is used to compare the effect of succession between 102 family and nonfamily SMEs. Our results indicate that intrafamily succession contributes to value creation in family SMEs. Moreover, intrafamily succession leads to higher levels of performance in comparison with nonfamily SMEs experiencing succession and ownership transfer. Copyright © 2014 ASAC. Published by John Wiley & Sons, Ltd.

Is small and medium-sized beautiful? The structure and evolution of family SMEs research

“…Muskat and Zehrer (2017), in a conceptual study, conclude that familiness and trust positively affect the relationships of power between the leader of the family firm and successor, while power imbalances within familiness can impact negatively on the transfer of tacit knowledge between generations. Comparing the succession effects between 102 family and non-family small family businesses, an empirical study by Colot and Bauweraerts (2014), based on a behavioural approach, demonstrates that family firm performance is positively influenced by intrafamily succession. In particular, intrafamily succession implies higher performance than non-family SMEs that experienced a transfer of ownership.…”

“…Contributions found a positive influence of intrafamily succession on small family business performance (Colot and Bauweraerts, 2014). Further research can analyse this relationship not only focusing on the succession of the first generation, but also in each stage of the intrafamily succession.…”

Effects of Context Factors on Post-Succession Performance of Family Businesses in Nigeria

“…Based on this view, Georgiou and Vrontis (2013) viewed and summarized contextual factors from the submission of other scholars into the following components as family dynamics, board of directors, incumbent-successor expectations, organizational performance, transfer of capital, organizational size and age, succession monitoring and reflective feedback. It has been proved that with regards to individualism and collectivism paradigm, individualistic oriented people will always tend to interpret and handle both family and business issues differently from collectivistic oriented people (Ye, Parris, & Waddell, 2013;Colot & Bauweraerts, 2014).…”

Does the origin of a succession CEO matter in the market value of innovation? Disentangling the origin of internal CEOs

“…Although there are a number of studies that have investigated how CEO origin, family businesses as a whole analytical unit, or family ownership influences innovations, the difference in how family heirs and unrelated internal successors affect innovation has been less explored (for a review, please see Karaevli, ; Massis, Frattini, & Lichtenthaler, ). As innovation performance significantly affects the competitive advantage and survival of a firm, it is particularly important for both scholars and professionals to understand how such performance is impacted by successor origin, and especially family heirs, due to the impact of family effect (Colot & Bauweraerts, ). In this study, by incorporating the perspective of family effect with upper echelons theory, we not only divided successor origin into external and internal categories, but also further disentangled the latter into unrelated internal and family CEOs, which provides a better understanding of the differences in the ways that unrelated internal successors affect innovation performance as well as the effects that family heirs have on innovation performance.…”