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

Abstract

In this study, successor‐related factors that can influence the succession process in small and medium‐sized family businesses are empirically investigated. This study was undertaken in South Africa among 2,458 owner‐managers and successors in 1,038 family businesses. These respondents were identified via a snowball‐sampling technique. A total of 332 usable questionnaires were returned. The dependent variable in this study, namely, the perceived success of the succession process, is measured by two underlying dimensions: satisfaction with the process and continued profitability of the business. The empirical results indicate that the successor‐related factors that influence satisfaction with the process are, on the one hand, the willingness of the successor to take over and the relationship between the owner‐manager and successor, on the other hand. The continued profitability of the business is influenced by the willingness of the successor to take over the business, the preparation level of the successor, and the relationship between the successor and owner‐manager. The relationship between the owner‐manager and successor is in turn influenced by the extent to which interpersonal relationships in the family can be described as harmonious. Based on these findings recommendations for successful succession are offered.

Selling, Passing on or Closing? Determinants of Entrepreneurial Intentions on Exit Modes

“…Evidence from family firm research suggests that, the smaller the firm size, the less likely it is that descendants intend to take over the business (Stavrou, 1999). Venter et al (2005) argue that potential successors perceive small firms as not sufficiently rewarding in the future in financial as well as non-financial terms. Moreover, the probability of finding a suitable buyer is likely to decrease with firm size as well.…”

Succession Planning in Black-Owned Family Businesses: A South African Perspective

“…Venter et al (2005) argues that this option should only be provided when and if the offspring or potential successors are interested and possess the necessary qualifications. This concurs broadly with the data showing that the incumbents strongly considered the potential successors' passion and commitment towards the business when identifying them for the talent pool of the business.…”

“…The findings reveal that the closeness of the relationship between the two parties has a positive influence on successor selection. Venter et al (2005) states that chances of a successful succession improve when the relationship between the incumbent and the successor is grounded on mutual understanding concerning the future of business.…”

“…For the purpose of this study the definition by Venter et al(2005) will be adopted which states that "a family business is one that is owned by members of the same family to shape and/or pursue the formal or implicit vision of the business and where it is the intention of the family members to hand the business over to the next generation or where the business has already been handed over to a family member to manage and/or control. "…”

A power perspective on knowledge transfer in internal succession of small family businesses

“…By offering a power theoretical perspective, we respond to this particular gap in research, and advance theory to enhance the understanding how knowledge transfer behavior between predecessor and successor in small family business succession. This contribution is necessary, as the literature has identified two distinct gaps: first, there is little research on knowledge transfer in small family businesses' internal succession processes (Venter, Boshoff, and Maas, 2005;Wickert and Herschel, 2001;Massaro et al, 2016). Second, there is an existing gap in research that offers a contextspecific perspective on power in research on knowledge transfer.…”