The Impact of Family Governance on the Sustainability and Continuity of Family Businesses in Botswana

Abstract

Academic discussion on corporate governance and its related issues are clearly visible in any country with active capital markets. This suggests that good governance is a crucial factor for ensuring economic development. Of concern is the lack of continuity after the first generation of ownership and control. However, few studies can be found relating to smaller family businesses. With the aim of contributing to this knowledge gap, this study aimed at identifying the impact of family governance on the sustainability and continuity of family businesses in Botswana. A sample of 144 family-owned businesses based in Gaborone and Francistown participated in the study. Pearson r correlation was used to measure the relationship between the variables of the study. The results showed that there is a weak positive relationship between family governance and the sustainability and continuity of family businesses in Botswana. It was recommended that mechanisms must be put in place in order to enlighten the benefits of having Board of Directors and to implement effective governance structures and systems to sustain the businesses in the market beyond generations.

Governance characteristics and sustainable longevity of family firms: the role of long-term orientation

“…This can be explained by the fact that these enterprises have a simple governance structure with unified ownership and management. Moreover, the majority of family SMEs are still young and belonging to the first generation and therefore the need for family involvement in the business is less recognized (Nordvisqt et al ., 2014; Tadu and Chiguvi, 2019). The small size of the effect of governance on the sustainable longevity of family businesses is explained by the fact that Tunisian SMEs have a monistic leadership structure, hence the need for governance structures is less recognized (Hammouda, 2017).…”

“…, 2011; Memili et al ., 2017). Previous studies showed that there is a need for good family governance structure to promote the survival of family SMEs (Tadu and Chiguvi, 2019; Al Rawaf and Alfalih, 2023). Our findings are relevant for both Tunisian practitioners and policy-makers to improve the governance practices of family SMEs in order to enhance their sustainable longevity.…”

“…, 2011). Additionally, research into both governance and longevity has been criticized due to its lack of focus on small- and medium-sized family business (SMEs) and has primarily focused on large or listed family firms (Tadu and Chiguvi, 2019). Hence, this is another reason for this study.…”

“…This relationship is often vague and previously limited to a few correlational studies (Fahd-Sreih and Djoundourian, 2006; Fahd-Sreih, 2009; Oudah et al. , 2018; Tadu and Chiguvi, 2019), without any mediation or moderation.…”

“…Previous studies on this topic used governance only as a binary variable and did not take into account unobservable variables through indicators (Cho et al, 2018;Gallucci et al, 2020). This relationship is often vague and previously limited to a few correlational studies (Fahd-Sreih and Djoundourian, 2006;Fahd-Sreih, 2009;Oudah et al, 2018;Tadu and Chiguvi, 2019), without any mediation or moderation.…”