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Family Business Succession: What’s Motivation Got to Do With It?
Abstract
Family businesses represent 80% of global business structures, but the low rate of successful transgenerational succession can have drastic implications for employees and local economies. A 12-year longitudinal study of 89 Canadian family businesses revealed that successors’ confidence and perceptions of incumbent support predicted successor intrinsic motivation to take over the business, which in turn predicted whether the business was successfully transferred 12 years later. Incumbent support and intrinsic motivation mediated the relation between incumbent trust in the successor and successful business succession. This study demonstrates the dual importance of incumbent and successor psychological states in determining succession outcomes.
... Succession, as an essential manifestation of the specificity of the family business, generally concentrates on the future and continuation of the activity and expresses the transfer of the enterprise from one generation to the heir (Gagné et al., 2021). When defining succession, special attention is paid to its specific dimensions: the object of the transfer between generations, mainly encompassing property, resources, ownership, management rights, leadership, responsibility, power, and control (Bertschi-Michel et al., 2020;Yuan, 2019), the process of transfer, including specific stages, such as planning, preparation, and execution of the transfer (Ge & Campopiano, 2022;Sheridan et al., 2021), relationships as well as strategic and complex socialization mechanisms between actors (mainly incumbent, successor, family, and nonfamily members) involved in the succession process (Bozer et al., 2017;Devins & Jones, 2016), results of the transfer process, such as the satisfaction of the parties involved in the succession, the positive performance and viability of the company, growth, and longevity of family businesses, and other development changes (e.g., new ideas, entrepreneurial orientation, improved innovativeness, sharing of knowledge) (Baltazar et al. 2023;Porfírio et al., 2020). ...
... The results obtained are of great importance for research in the field of succession of family businesses (Gagné et al., 2021;Ge & Campopiano, 2021), as well as the relationship between succession and innovation in these entities (Baltazar et al., 2023). Suddaby and Jaskiewicz (2020) defined this research problem as managing the tension between continuity and change in family business. ...
... Examples of such companies are well documented and presented in the literature (Flören & Jansen, 2011;Koiranen, 2002;Kuta et al., 2017;Lofts, 2019;O'Hara, 2004). However, according to experts, a very risky is the third (i+2) and especially fourth (i+3) business generation, which represents only a few percent (2-3%) of companies founded by the first generation (i) (Bozer et al., 2017;Gagné et al., 2021). This fact is difficult to verify in the Czech Republic and Poland because the transmission of the family companies from the first (i) to the second (i+1) generation is in progress. ...
Aim/purpose – This paper aims to introduce and describe a new paradigm (model) of evolutionary dynamism of family business potential in the succession process and its empirical simulation in family enterprises from culturally close “post-socialistic” coun- tries: the Czech Republic and Poland. Design/methodology/approach – The conceptual basis for developing the evolutionary model of family business was our research on the sample of 235 small and medium-sized family enterprises from the Czech Republic and Poland. A practical experimental simu- lation of the model was carried out in 12 Czech and 19 Polish family companies. Findings – The proposed model is based on economic and natural laws, including opti- mization proportions of the golden ratio, laws of time economics, theory of innovation, and “Moore’s law.” This model allows us to simulate and analyze the pace of accelerat- ing innovation cycles and the dynamism of intergenerational changes of family business potential in the succession process. Research implications/limitations – The social and industrial revolution 5.0 is getting near and global economic, social, cultural, ecological, and other contemporary turbu- lences, built on the “microcosm optimization” of living matter, having two extreme marginal variants for the subsequent (evolutionary) development of family business: (a) an option of “harmony” or (b) an option of “tragedy.” One limitation of the model is its general nature, making it sensitive to outlier cases. Originality/value/contribution – The proposed model provides valuable analytical guidelines for family business succession and significantly highlights the role of intra- family dynamics in this process. It also represents a novel analytical approach to as- sessing and predicting the longevity of family business as well as an opportunity for the development of mixed research in family entrepreneurship. Keywords: Family entrepreneurship, family business, succession, innovation, potential. JEL Classification: L26, M21, O31, P47.
... Successors are aware, interested, and driven by entrepreneurship (Kurniawan et al., 2016). The successor's motivation aids the transition (Gagné et al., 2021). However, little study has explored the intrinsic motivation of family company successors based on motivation theory (Gagné et al., 2021), notably female successors (Akhmedova et al., 2020). ...
... The successor's motivation aids the transition (Gagné et al., 2021). However, little study has explored the intrinsic motivation of family company successors based on motivation theory (Gagné et al., 2021), notably female successors (Akhmedova et al., 2020). ...
... This research is essential since the succession of female entrepreneurs is a major impediment to family business viability and longevity (Gagné et al., 2021). How difficult they expect the generational shift will make an incumbent's choice of a woman (Wu et al., 2020). ...
Family enterprises are the most important contributors to Indonesia’s economic resilience. However, the issue of family business succession persists. Female heirs are capable of carrying on the family business. Female entrepreneurs and family business successors in Indonesia and around the world are uncommon. The motivations of female family business heirs will be investigated using self-determination theory. Interview protocols and Interpretative Phenomenological Analysis are used in this qualitative investigation. According to the study, female motivations for developing relationships and self-development exceed women’s autonomy. All three female informants desired cash guarantees as well as repayment to their parents and the family business. Self improvement and family business collaboration are the third motivational trajectory. According to the study, family business players must create possibilities for Indonesian female entrepreneurs’ successors to have careers, build skills, and continue the family business in order for them to feel financially secure and motivated to take over the family firm.
... Succession is often accompanied by years of collaboration while power is being transferred from one generation to another [3]. The founding entrepreneurs have built the firms from scratch and accumulated substantial wealth, yet intergenerational inheritance has become a real and critical challenge they must face [4,5]. ...
... Driven by intergenerational motivation, entrepreneurs are more likely to take risks and exhibit long-term orientation, which can be attributed to altruistic behavior toward future generations [9]. [4] find that entrepreneurs' perceptions affect their interactions with successors and change their skills and motivations. Therefore, entrepreneurs' willingness to hand over their firms may affect their own choices and the promotion of their family firm's digital transformation. ...
... The intrinsic motivation of successors is also an important factor. Commitment from family members is a key determinant of family firms' survival and longevity, helping to support long-term survival goals and firm success [4]. With strong organizational commitment, family firms are able to review and respond to uncertainty, even under dynamic environments [53]. ...
... Hasil penelitian menunjukkan bahwa family business exposure berpengaruh signifikan terhadap komitmen afektif dan intensi suksesi, komitmen afektif berpengaruh signifikan terhadap intensi suksesi, dan gender memoderasi pengaruh family business exposure terhadap komitmen afektif, sedangkan generasi pertama tidak memoderasi. Gagne et al., (2019) menelaah pengaruh tentang suksesi bisnis keluarga, yang terkait dengan kepercayaan, persepsi otonomi, keyakinan suksesor, motivasi intrinsik suksesor dan hasil suksesi. Responden adalah 89 orang kanada yang memiliki bisnis keluarga. ...
... Jika hubungan terjalin dengan baik dan kepercayaan semakin meningkat maka kerjasama akan semakin baik sehingga suksesi bisnis keluarga dapat berjalan dengan baik. Hasil penelitian sejalan dengan Wijaya et al. (2018) dan Gagne et al. (2019) bahwa kepercayaan yang diberikan kepada suksesor akan mendorong kerjasama yang lebih baik dengan predesesor dan menambah dedikasi suksesor sehingga suksesi bisnis keluarga dapat berjalan dengan lancar. Kepercayaan juga penting untuk tetap menjalin hubungan yang positif dengan suksesor yang juga merupakan anggota keluarga. ...
In a family business, the issue of succession becomes important to keep the family company survive. There are two important things that play a role in family business succession, namely trust and affective commitment. This study aims to examine the effect of trust and affective commitment on family business continuity success. Research respondents were 87 college students of Ciputra Family Business, which were taken by purposive sampling method. The analysis used is multiple regression analysis. The results of the F test hypothesis indicate that the regression model used in the study is declared feasible. The results of the t-test analysis show that the variables of trust and affective commitment partially have a significant positive effect on family business continuity success for Cipoutra. It can be concluded that higher trust and affective commitment will increase the success of family business succession.
... From a management perspective, there is no universal solution for realizing a succession in family businesses (Melin and Nordqvist, 2007;Sentuti and Cesaroni, 2020;Sharma et al., 1997;Zellweger, 2017) in which the business leadership is completely transferred to a new owner (Gagné et al., 2021). In general, incumbents first have two basic alternatives for business succession. ...
... At first glance, it is remarkable though that family business research has so far mainly focused onin light of our resultsthe rather small proportion of owners who bring their plans to reality than on those who do not. After all, the succession process is among the biggest challenges for family businesses (e.g., Corona, 2021;Gagné et al., 2021;De Massis et al., 2008;Handler, 1994;Morris et al., 1997;Porfírio et al., 2020;Pyromalis and Vozikis, 2009) and is not as straightforward as owners assume after they decide to exit (Meier and Schier, 2014). At a closer look, the lack of research on actual outcomes of family business succession planning is largely due to the limited availability of suitable data. ...
Family business successions are commonly considered as one of the most critical events of any family business. Yet, despite extensive research, current evidence on the actual extent to which family busi-ness owners accomplish, adapt, or even abandon their initial succession plans is astonishingly still lack-ing. This paper addresses this issue by overcoming some methodological limitations of previous re-search on family business successions. The results provide robust insights into a wide mismatch be-tween desire and reality regarding family business succession planning. Thus, transgenerational contin-uation of family businesses should not be taken for granted. A considerable proportion of business own-ers abandon their initial succession plans, do not realize the succession in the intended timeframe, or close their business ultimately. There is also a remarkable number of unintended business transfers which have received little attention in research to date.
... "From shirtsleeves to shirtsleeves in three generations." This is, unfortunately, a popular expression that describes what happens to roughly 90% of family businesses, namely, they fail under the control of the third generation or even the second one (Ward, 1987;Porfírio et al., 2020;Gagn e et al., 2021). This statistic is a huge problem considering that family businesses contribute to 80% of global GDP and create 50%-80% of jobs in the majority of countries . ...
... Family business scholars have dedicated considerable efforts to understanding how to ensure continuity and a smooth succession, intended as the process in which the control of the business is transferred from the previous generation to the next one (e.g. Gagn e et al., 2021;Handler, 1994;Le Breton-Miller et al., 2004;Lee et al., 2003). This great attention stems from the fact that transgenerational control is one of the defining characteristics of family businesses (Chua et al., 1999) as well as one of the most important goals (if not the most important) of an EF (Zellweger et al., 2012a). ...
Purpose
Given the limited understanding of the process of transgenerational entrepreneurship and that knowledge is a fundamental antecedent of entrepreneurial endeavors, this study aims to shed light on how entrepreneurial families (EFs) nurture entrepreneurship across generations, which knowledge is required within the EF to spur new entrepreneurial activities, and how is this knowledge acquired.
Design/methodology/approach
Considering the paucity of empirical evidence on the topic under investigation and the related exploratory nature of this study, the authors adopted a qualitative approach by conducting a case study on an Italian wine-making family business.
Findings
The case analysis reveals that EF members are required to acquire different types of knowledge at different generational stages to spur new entrepreneurial activities, specifically technical knowledge in the second generation and business knowledge in the third generation. Moreover, the data analysis shows two mechanisms, namely, trust among generations and role separation, that, during both generational transitions, enabled and empowered the younger generations to exploit their knowledge to explore entrepreneurial opportunities and engage in new entrepreneurial activities.
Originality/value
This study provides novel insights into the role of knowledge in transgenerational entrepreneurship, particularly looking at knowledge acquired by EF members across generations. Accordingly, this research contributes to the literature streams of transgenerational entrepreneurship, knowledge management in family businesses and broader knowledge management research.
... Gersick and colleagues (1997) identified the development of an entry process for the next generation as one of the primary challenges of family business. Succession requires communication, agreement, and cooperation of incumbent, successor, and family to achieve satisfaction (Gagné, Marwick, Brun de Pontet, & Wrosch, 2021;Sharma et al., 2003). As Dyck et al. (2002) described it, the family business succession process is like a relay race baton transfer. ...
... However, as relay race runners may occasionally drop the baton while attempting a handoff, the same is true of intra-family power transfers. Incumbent attitude, successor attitude, and succession planning all influence the succession process (de Alwis, 2016; Gagné et al., 2021;Sharma et al., 2003). The incumbent must be accepting of succession, willing to transfer power, and nurturing and supportive of the successor (de Alwis, 2016; Sharma et al., 2003). ...
Transgenerational succession is a primary aim of family businesses. The succession event often has consequences for the employees of the firm. A particular risk is employee turnover in the aftermath of transgenerational succession. Understanding the factors that retain employees in the wake of a succession event is of vital importance. The model presented here offers insight into the importance of successor characteristics and the trust that they evoke in fostering family business employee retention. This work has significant implications for how to maintain efficiency after a succession event for family business scholars and managers alike.
... "From shirtsleeves to shirtsleeves in three generations." This is, unfortunately, a popular expression that describes what happens to roughly 90% of family businesses, namely, they fail under the control of the third generation or even the second one (Ward, 1987;Porfírio et al., 2020;Gagn e et al., 2021). This statistic is a huge problem considering that family businesses contribute to 80% of global GDP and create 50%-80% of jobs in the majority of countries . ...
... Family business scholars have dedicated considerable efforts to understanding how to ensure continuity and a smooth succession, intended as the process in which the control of the business is transferred from the previous generation to the next one (e.g. Gagn e et al., 2021;Handler, 1994;Le Breton-Miller et al., 2004;Lee et al., 2003). This great attention stems from the fact that transgenerational control is one of the defining characteristics of family businesses (Chua et al., 1999) as well as one of the most important goals (if not the most important) of an EF (Zellweger et al., 2012a). ...
... A low rate of successful succession can have diverse implications for business continuity and performance (Gagné et al., 2021). Metrics expressing the success (or failure) rate of the generational renewal process are important; however, it is crucial to understand the factors influencing these numbers and data. ...
Purpose: The study aimed to analyze research on succession in family businesses that applied Grounded Theory (GT) method and propose a research agenda.Methodology: A systematic literature review was conducted using Scopus and Web of Science databases. Data analysis was carried out using two distinct approaches: the first explored the conceptual and theoretical aspects of the studies, while the second focused on the application of the GT method.Findings: The analyzed studies examined succession from different perspectives, identifying four thematic clusters: Family Businesses, Successors, Family, and Grounded Theory. This research explored succession stages and processes, successor development and leadership, family roles and influence, as well as intergenerational communication, conflicts, and decision-making. Based on these clusters, a research agenda was developed that offers insights into the field of family business succession through the application of the GT method. Despite the extensive literature, studies that generate theories or strictly adhere to the fundamental principles of GT remain scarce.Research implications: This study highlights research opportunities through the application of the GT method, contributing to a deeper understanding of the succession process in family businesses and the formulation of sustainable business policies.Originality: This study outlines pathways for future research in this field based on the four identified thematic groups, addressing research gaps, providing insights, and fostering continued investigations to support the development of family businesses.
... An improved family business means improved well-being, but motivational factors and management basics need to be considered when starting to build one (Gagné et al., 2021). Blending family attributes with management will help to form a family business (Combs et al., 2020), by focusing on the effects of religious orientation on business and family, as well as on the values, norms, and goals that exist in the family business system, you will gain a more meaningful understanding between religious beliefs and sustainable ethical behavior in family businesses (Astrachan et al., 2020). ...
PKK members need to take advantage of their opportunities and potential to run a family business professionally. This community service (PPM) aims to motivate and increase the entrepreneurial spirit of PKK cadres to run a family business so that it can improve welfare. PPM is carried out with technical training in the form of lectures, discussions, practices, and assistance on family business management, which is carried out at the Village Hall and visits to production sites. The training participants consisted of 25 cadres and 10 Dasa Wisma. The implementation time is for 4 (four) months, namely from September to December 2023. The results show an increased understanding of the use of business opportunities, entrepreneurial spirit, and the desire to change to meet the demands of competition. Furthermore, support from the village government, and PKK Administrators. Village-owned enterprises (VOEs), and universities were needed to improve management capabilities, facilitate PIRT and halal certification, as well as assist in managing family businesses. The importance of this PPM is to provide knowledge, motivation, and assistance so that family businesses are guaranteed sustainability.
... f) Incumbent's Support and Intrinsic Motivation: In the context of family businesses, "incumbent's support" refers to the current leader's actions to foster the successor's autonomy and competence, which enhances the successor's intrinsic motivation to take over the business. This relationship is highlighted in a study by Gagné et al. (2021), which found that such support positively influences the successor's motivation and the likelihood of successful succession. In a family business the support of the incumbent leader is required to transfer his knowledge, past learnings, lessons, and skills (Nwuke & Adeola, 2023). ...
The present study was done to evaluate the causal relationship amid the enablers of successful transition of management succession in family-owned business in South Asian Nations. This was an empirical study where owners of family-run business across various South Asian countries were interviewed. In this study we used the Decision-Making Trial and Evaluation Laboratory (DEMA-TEL) approach to examine the causal relationship among the twelve variables which were identified by examining the existing literature. The findings of the research demonstrated that formal education, well defined succession plan, early affiliation in business etc. formed the cause group and .shared vision for future, active involvement of the successor/s in the succession process, tacit knowledge transfer,building trust and credibility in successors and competence over gender etc.formed the effect group.
... Previous studies were conducted using relevant variables among family businesses; the earliest is succession and its role in family firms (Davis and Tagiuri, 1989;Gagne et al., 2021;Handler, 1994;and Ramadani et al., 2017). Other aspects studied include organizational theory and management (Benavides et al., 2013), intergenerational characteristics in family firms (Dagnino and Pinna, 2017), women in family business (Ratten et al., 2018), entrepreneurial thinking (Hnatek, 2015), and innovation in family firms (De Massis et al., 2013). ...
While the resilience and success of family businesses in India has been remarkable, there have been no efforts to measure the mindset of the owner-managers of such firms. This study seeks to develop and test a scale to measure the entrepreneurial mindset in family firms. For this, a sample of 426 key informants (second and third-generation family business owners) from 213 firms, with two respondents from each firm have been taken. The study employed a quantitative approach by administering a survey questionnaire to key participants who are family business owners in the sports goods industry in India. Structural equation modeling was employed to confirm the reliability and validity of the entrepreneurial mindset (EM) scale. The study reveals critical aspects of the entrepreneurial mindset that are related to an entrepreneur's cognitive thinking and behavioral actions. It finds a significant positive relationship between entrepreneurial mindset and business performance in family firms in India. By measuring the entrepreneurial mindset of family firms in India, this study contributes to a better understanding of the factors that lead to their success.
... This desire or hope can be applied through the careful and thoughtful planning and preparation of leaders for the next generation, as it will impact the longevity of the company (Porfírio, et al., 2020). Succession planning for leadership is part of human resource planning, which in its implementation must be aligned with the company's strategy so that the main objectives of the planning are achieved (Gagné, et al., 2021). This research measures success with several indicators, namely passion, competence, talent, vision, and empathy (Jabeen & Oudah, 2018;Liu, 2018). ...
Batik is a cultural product in Indonesia. However, the batik industry is still identically with the Central Java region. Batik Trusmi Cirebon is a batik product that has a long history in Central Java. The Cirebon batik industry is managed from generation to generation, and has the potential to become a developing batik industrial area. This study aims to determine the influence of succession strategy on marketing capability and competitive advantage, and its implications for marketing performance. This study involved 42 respondents of batik business actors. The model analysis tool used was SEM. The results of the study showed that the succession strategy significant affect marketing capability. Succession strategy has a significant effect on competitive advantage. Marketing capability has a significant effect on competitive advantage. Marketing capability has a significant effect on marketing performance. Competitive advantage does not have a significant effect on marketing performance. Succession strategy has a significant effect on competitive advantage through marketing capability. Succession strategy has a significant effect on marketing performance through marketing capability. Succession strategy has a significant effect on marketing performance through competitive advantage. Marketing capability has a significant effect on marketing performance through competitive advantage. Succession strategy has a significant effect on marketing performance through marketing capability and competitive advantage. Thus, the succession strategy plays a crucial role in enhancing marketing performance at Batik Trusmi Cirebon.
... Researchers find that parental behaviors significantly influence the succession process in family enterprises. For instance, negative parental role modeling can deter successors' intentions, while factors like successor confidence and perceived support are crucial for their motivation to take over the family business (Gagn e et al. 2021;Roman ı et al. 2022). Effective succession planning and family learning mechanisms that emphasize clear parental preference, preparation for the role, and the transfer of knowledge and values, are the key factors in fostering a positive environment for business continuity and encouraging successors to consider leadership roles (Martin-Cruz et al. 2020; Schr€ oder, Schmitt-Rodermund, and Arnaud 2011). ...
... Cumpre destacar, ainda, o fato de que existe uma variedade de perspectivas que influem sobre a construção e evolução de processos sucessórios no contexto de organizações familiares. Dentre esses elementos, destaca-se: o planejamento da sucessão; a escolha de potenciais sucessores no âmbito da família empresária; aspectos educacionais e de formação profissional de sucessores; a socialização e a construção da credibilidade e legitimidade de sucessores; o envolvimento e o comprometimento de sucessores com o projeto da empresa familiar; o grau de interação e a qualidade do relacionamento entre fundadores, predecessores e sucessores; a particularidades estratégicas, organizacionais e familiares associadas à transferência da gestão e da propriedade da empresa familiar para futuras gerações da família empresária; as possibilidades de introdução de iniciativas empreendedoras e inovativas no negócio, promovendo renovação e crescimento da empresa familiar; e a busca pela longevidade e sobrevivência da organização familiar (Brockhaus, 2004;Fletcher, 2004;Cadieux, 2007;Borges & Lescura, 2012;Zellweger, Nason, & Nordqvist, 2012;Richards, Kammerlander, & Zellweger, 2019;Gagné et al., 2021;Umans et al., 2021;Volta, Borges, & Cappelle, 2021;Cisneros et al., 2022;Costa, Zen, & Spindler, 2022;Magrelli et al., 2022;Baltazar et al., 2023;Borges & Okubo, 2023). ...
O objetivo deste artigo consiste em mapear a produção científica sobre sucessão em empresas familiares no Brasil. Para tanto, considerando o marco de trinta anos de publicações sobre processos sucessórios, buscou-se resgatar a evolução dessa produção ao longo do período analisado, identificando o estado atual, os padrões da pesquisa, e possíveis tendências das investigações sobre o tema. Nesta revisão de escopo da literatura, foram identificados um total de 161 artigos publicados em periódicos e nos eventos da ANPAD. Os trabalhos foram agrupados em três eixos principais: a construção do processo de sucessão; aplicação de modelos teóricos de análise; e a associação teórica entre sucessão e outros temas de pesquisa. Com isso, buscou-se reunir evidências para a identificação dos principais padrões e particularidades da investigação sobre sucessão, e para a proposição de tendências em potencial que podem contribuir para a formação de uma agenda para a realização de novos estudos sobre o tema no Brasil, contribuindo para o avanço e desenvolvimento futuro do campo nacional de estudos sobre empresas familiares.
... Leaders are strong determinants of employees' successful adoption of lean and green practices (Potosky and Azan, 2023;Van Dun and Wilderom, 2012;Tortorella et al., 2019). In family-owned firms the direction of the business is heavily dependent on top managers, who are typically family members or those with close ties to the owning family (Fries et al., 2021;Gagn e et al., 2021;Efferin and Hartono, 2015;Maharajh et al., 2023). Moreover, as such leaders tend to perpetuate family values and visions through their firms, the success of family-owned firms largely relies on the behaviours of their leaders (Fries et al., 2021). ...
Purpose
This longitudinal study focuses on the specific behaviours of both top and other leaders in family firms that are implementing lean and green practices in order to contribute to the sustainability transition.
Design/methodology/approach
Over the course of two years and two months, longitudinal comparative case research was carried out within two Indonesian family firms in the logistics and transportation business. Data were collected via of 86 interviews, 37 observed meetings within the firms and 12 work floor visits. The thematic analysis approach was based on the “fuller full-range theory of leadership”.
Findings
Over time, the leaders at various hierarchical levels learned to diversify their behavioural repertoire; solely exhibiting the transactional or transformational leadership style was not effective for employees’ adoption of lean and green practices. Instead, the leaders had to integrate the behaviours from the transactional, transformational and instrumental leadership styles.
Originality/value
This study explores the extension of leaders’ behaviours over time. Our findings result in two propositions that theoretically explain the evolved behaviours that steered the organisational transformation towards a lean and green firm. Given its context (i.e. Indonesian family-owned logistics firms), this study offers insights that might generalise to similar family firms in other Asian countries.
... Family businesses are the most common type of business in the world (Ernst and Young, 2018;Ratten et al., 2023), which contribute greatly to the economic development of countries (Carbone et al., 2022). Family businesses generate jobs for a large part of the world's population, helping in the economic prosperity of the country (Gagn e et al., 2021). The role of the family business in the economy is shaped by cultural traditions and new social attitudes with new technologies changing the way a family business is conceived (Ratten, 2023). ...
Purpose
The impact of technological transformations in all sectors is undeniably significant, especially in fitness family business. The aim is to examine the digital transformation perceptions of fitness centre employees and the effects of perceived empowerment on their job performance in family business in Turkey.
Design/methodology/approach
The sample was 334 fitness centre employees. Four variables were evaluated (digital transformation, meaning competence, self-determination and job performance), and PLS-SEM was used.
Findings
The digital transformation process in the fitness sector can be considered as an important factor in terms of creating new business ventures. Our results showed that digital transformation perceived by family business employees had a significantly influence on the meaning competence of the employees. Also, the meaning competence of employees was a mediator between the digital transformation and job performance.
Practical implications
Managers of family businesses must take into account that an appropriate digital transformation of their products and/or services has an impact on the meaning competence of their employees. Thus, through increased competence in employee performance, the digitization of family business fitness will lead to higher employee performance and productivity.
Originality/value
This study innovates by linking digital transformation as a factor influencing the coach's own motivation and self-perceived competence in the use of technology to their job performance.
... Problems with intergenerational continuity and succession (especially between the first and the second generations) has been recognised as a principal reason for high failure rate in many family businesses (Cabrera-Suárez & Martín-Santana, 2012;Gagné et al., 2021). In most contexts, family businesses face many challenges to ensure the successful transfer of leadership and management (Cabrera-Suárez & Martín-Santana, 2012). ...
By analysing cultural and institutional forces in the Chinese context, this chapter examines daughters’ succession in Chinese family businesses and proposes three directions for future research. Our review shows that Chinese daughters’ roles are complex and shaped by a web of unique cultural, economic and societal influences which are not fully recognised in existing research. While there has been a steady increase in women’s involvement and entrepreneurial activity in family firms due to rapid economic growth, young Chinese women still face substantial difficulties in terms of managing work-life balance, overcoming gender bias during succession, and progressing to leadership roles. Moreover, our analysis also reveals the challenges Chinese family businesses are currently facing and daughters’ potential contributions in shaping future business development. We conclude by arguing that current institutional influences often set competing and confusing goals in the balance of gender equality, economic development, and family sustainability.
... One of the entrepreneurial environments is the family environment, which plays a vital role in determining the future, mainly a student who wants to start a business (Urbano et al., 2020). Especially if students have a family business, it is supported for entrepreneurship (Gagne et al., 2021). Because they can learn entrepreneurship from the family business environment. ...
Measuring intentions or intentions in establishing a new business (new venture creation) needs to be done because in starting a business, various initial decisions are significantly related to forming business goals and strategies that can later determine the direction, sustainability, and growth of a business. The purpose of this study was to determine the influence of entrepreneurship education and entrepreneurial environment on entrepreneurial intentions through entrepreneurial motivation in private vocational school students in Mojokerto Regency. The population in this study was 233 students of Private Vocational School in Mojokerto Regency-Data collection using closed questionnaires. Data analysis techniques use descriptive statistics and Structural Equation Modelling Partial Least Squares (SEM-PLS). The results showed that 1. There is a direct influence of entrepreneurship education on entrepreneurial motivation; 2. There is an influence of the entrepreneurial environment on entrepreneurial motivation; 3. There is a direct influence of entrepreneurship education on entrepreneurial intentions; 4. There is a direct influence of the entrepreneurial environment on entrepreneurial intentions; 5. There is a direct influence of entrepreneurial motivation on entrepreneurial intentions; 6. There is an indirect influence of entrepreneurship education on entrepreneurial intentions through entrepreneurial motivation; 7. There is an indirect influence of the entrepreneurial environment on entrepreneurial intentions and entrepreneurial motivation
... According to the model, as business families strive to complete the first intrafamilial succession, they need to accomplish a series of activities and decisions that may lead to the passing over of the baton to the next generation (the domain of 'common construction'; Cater et al., 2016). Interconnected with this process, however, they also need to redefine the personal relationships between the family membersmost importantly, the one between the incumbent and the successor (domain of 'shared identity'; Bernhard & Labaki, 2021;Gagné et al., 2021) and to reflect on and shape their interpersonal agreements and framework of codes (domain of 'family rules'; Kubíček & Machek, 2020;von Schlippe & Frank, 2013). At the core of the three-domain process is 'negotiating relationship(s),' whereby multiple negotiations involve family members' efforts to balance their multiple needs for closeness, differentiation, reciprocity, emotional stability, and shared time perspectives in all three domains and the respective themes. ...
This article identifies how relationship-regulation processes between family members support or hinder the succession process in family businesses during first-generation succession. We analyzed interviews with incumbents and successors from twelve first- generation family firms. We found that intrafamily succession is driven by relational negotiation processes organized around three main domains: negotiating the shared identity of the incumbent and successor, their shared construction regarding succession, and shaping the family rules that frame the process. In the proposed theoretical model, their common construction is represented by the metaphor of a bridge built ‘brick by brick’ as a result of their relationship regulation processes. Relationship negotiations around shared identity served as a basis for their common construction, while negotiations on family rules shaped its framework. Findings suggest a dynamic and relationship-oriented approach to succession wherein the role of planning is not central and relationship negotiations regulate the achievement of the succession.
... Drawing from the stakeholder theory, Sharma et al. (2001) proposes that satisfaction with the succession process considers factors such as "the (1) propensity of the incumbent to step aside, (2) the successor's willingness to take over, (3) agreement among family members to maintain family involvement in the business, (4) acceptance of individual roles, and (5) succession planning" (Sharma et al., 2003a). The incumbent's support of the successor and the successor's willingness were essential factors in successful succession outcomes (Gagne et al., 2021). On the other hand, dissatisfaction with the succession process could result in conflicts that would adversely affect firm performance. ...
Purpose
The complexity of succession in family firms is multifaceted and can sometimes lead to turbulence. While structured succession strategies offer a roadmap for smoother transitions, intergenerational differences in family small and medium-sized enterprises (SMEs) can lead to varied interpretations of an effective succession blueprint. This study synergizes the strategic entrepreneurship framework with the socioemotional wealth (SEW) perspective to probe into how formalized succession planning impacts performance in family SMEs. Furthermore, it delves into the mediating role of succession satisfaction, especially in family firms characterized by pronounced SEW and helmed by CEOs from different generational cohorts.
Design/methodology/approach
Employing a comprehensive dataset from 1,833 global family businesses, this research utilizes bootstrapping regression models to discern the intertwined effects of mediator and moderator variables and their statistical significance.
Findings
The main findings suggest that succession satisfaction does matter for a good succession process and that succession plans work only in family firms with a high degree of SEW and that are led by older family CEOs (e.g. baby boomers).
Practical implications
The results offer fresh perspectives on succession processes, with a particular focus on how to improve the satisfaction of millennial family CEOs.
Originality/value
The study uniquely combines strategic entrepreneurship and SEW to offer a holistic view of succession planning, highlighting satisfaction’s mediating role and SEW’s moderating influence. Additionally, it pioneers the incorporation of generational cohorts into the succession discourse.
... Many entrepreneurs advocate for learning from other family-owned enterprises. Furthermore, the concept of a family business might include reaching a common vision predominantly held by family members, assuring the business's continuity across generations (Gagné et al., 2021;Holte, 2019). In summary, a family firm is often defined by family members' ownership and leadership, with some stressing emotional attachment. ...
The COVID-19 pandemic has posed significant challenges for family businesses around the world, forcing them to adapt to the "new normal." In family businesses, succession planning is critical for ensuring continuity and growth. The objective of this study is to look into how company leaders in Malaysia have implemented succession planning in previous research. It examines the context of Malaysian family businesses, focusing on the critical elements of succession planning and the challenges that business leaders face. A semantic approach was used in this study to focus on surface-level themes based on participants' explicit statements. The study's findings reveal that, although formal succession planning is recommended, informal practices are prevalent in Malaysian family businesses, impeding effective generational transfer. Limited scholarly research in Malaysia underscores the necessity for more structured and well-documented succession planning strategies. The study emphasises the value of formalisation, urging family businesses to consider succession planning as a strategic investment. Cooperation between incumbents and successors is critical for fostering innovation and competitiveness, both of which are required for adapting to changing market dynamics. This article concludes by emphasising the importance of structured succession planning approaches for Malaysian family businesses. By addressing these issues and embracing formal strategies, family businesses can secure their legacy, ensuring their continued success and contribution to the economy.
... Family business succession Family businesses are important contributors to the economy of the world and account for close to 80% of global business (Gagn e et al., 2021). Thus, what happens to them can impact the economy around the world. ...
Purpose
Although succession planning can be important for the continuity of family firms, not all family business have the opportunity to engage in this planning. Sometimes, these organizations face crisis events that may trigger an intra-family succession. However, what happens when there is an unplanned succession? Are family businesses doomed to fail? This project aims to explore unplanned successions that are triggered by crisis and the impact that this can have on post-succession financial performance. The authors also examine the moderating role of successor characteristics (i.e. education and previous work experience) on this relationship.
Design/methodology/approach
The ideas were tested using data from 151 publicly listed family firms in China.
Findings
The findings indicate that having a crisis driven intra-family succession does not always result in lower post-succession performance. It is only successions that are triggered by market crises that negatively impact financial performance after the unplanned succession. In these instances, the education and previous experience of the successor moderate the negative relationship between market crisis succession and financial performance such that having more experience and a college education diminishes these negative effects on performance.
Practical implications
The results point to the importance of the preparation of the next generation in helping family firms navigate unplanned successions. The findings indicate that education and previous work experience of the successor can help a family firm manage a crisis.
Originality/value
This study continues to build the understanding about unplanned successions and the important role that successor preparation can have for the success of the family firm.
... Family business scholars have long sought to understand firm continuity across generations (Cruz et al. 2013;Gagné et al. 2019;Long and Chrisman 2014). The successful transition of the business from one generation to another is an integral prerequisite to firm continuity (Nordqvist et al. 2013). ...
Inspired by an aging agripreneur population and the economic importance of fishing and cocoa production, this study examined the mechanisms and challenges of succession planning by selected cocoa farmers and fishers in Ghana. The research approach was quantitative, and the design involved a descriptive cross-sectional survey involving a convenience sample of 141 cocoa farmers and fishers. Upon fulfilment of normality test requirements, analysis of means confirmed an aging agripreneur population. The predominant succession planning mechanism was relay succession. Fishers acknowledged pair trawling, closed season policy and depletion of fish stock to constitute the three leading challenges of succession planning. Cocoa farmers identified limited availability of committed successors, cost of training a successor and time constraint as the top three succession planning challenges. Per principal component analysis, the leading cluster of the fishers’ succession planning challenges constitutes direct factors. That of the cocoa farmers is an interplay between direct and indirect factors. Persistence of these challenges would heighten the tendency of the enterprises to ‘die’ upon the demise of the agripreneurs and threaten the sustainability of the two industries. Sustenance of the industries would require extensive long-term public policy on making the sectors attractive to the youth, for instance through mechanization support and tax incentives.
This study aims to highlight the perceptions of entrepreneurship students in Indian private universities towards factors that affect women's entrepreneurial success in the future. The study adopted an exploratory way to explore the factors affecting women entrepreneurs in family businesses. The data for the study was collected from students studying in higher education institutions by conducting interviews using the interpretative phenomenological analysis (IPA) technique with 26 respondents. The institutions were finalized based on their record for running entrepreneurship programs at the postgraduate level. The study provides a base for developing nations with non-egalitarian contexts to encourage women to join family businesses.
This paper theorizes how the parent-child relationship influences a child’s intentions for internal succession versus external entrepreneurship. Drawing on insights from family science literature, we examine the emotional and cognitive dimensions of this relationship and their impact on a child’s intentions. We propose that the impact of the parent-child relationship on a child’s intention will vary based on the child’s gender and self-competence. We further delineate that the effects of the child’s gender and self-competence will be moderated by different cultural contexts, including “son preference” and coparcenary cultures. By doing so, this study enhances our understanding of the critical roles that parents and cultural contexts play in shaping children’s attitudes toward internal succession and external entrepreneurship, while also highlighting the unique ways through which familial relationships influence a child’s choice in sustaining family firms and preserving an entrepreneurial mindset across generations.
Individuals are the driving force that sustains and helps a company succeed (Mura et al., 2021). Previous research from the organizational behavior domain sustains that management’s emotions are of great importance in the performance of organizations (Lee et al., 2023; Minárová et al., 2020). The role of emotions in an organization is highlighted by Reynolds and Vince (2004) who sustain that “Every organization is an emotional place because it is a human invention, serving human purposes and dependent on human beings to function” (p. 443). In family businesses (FBs), the strength of family bonds and the inclusion of certain family members in the management and work process, strongly impact the organizational processes (Babet, 2020). Worldwide, FBs constitute the dominant organizational structure, with more than 60% of global businesses, contributing over 50%–75% of the gross domestic product (GDP), and workforce employed in any state (Gagné et al., 2021). The specificity and uniqueness of the FB are given by the different reasons that support a family and non-family firm (Chaudhary et al., 2021). The main characteristics are represented by socioeconomic wealth (Craig & Newbert, 2020), strong and trustful relationships between managers (Cunningham & McGuire, 2019), long-term orientation (Chaudhary et al., 2021), strongly connected with their traditions, values, and culture (Minárová et al., 2020), and respect for their business reputation, often associated with family reputation (Beck & Prügl, 2018).
Purpose
This study aims to investigate the factors influencing successful and unsuccessful succession in Pakistani family-owned businesses (FOBs), with a focus on the interplay between formal governance practices and socio-cultural dynamics. By examining key elements in succession planning and leadership transition, the study offers insights tailored to the unique challenges faced by FOBs in emerging markets such as Pakistan.
Design/methodology/approach
Employing a multiple case study approach, this research examines generational transitions across ten Pakistani FOBs. Data were collected through semi-structured interviews with key family members involved in the succession process, with thematic analysis applied to identify patterns.
Findings
The findings indicate that proactive succession planning, formal governance mechanisms and thorough successor training are critical for achieving smooth leadership transitions in Pakistani FOBs. Companies that implement structured governance and clear succession processes experience fewer internal conflicts and greater business continuity. However, socio-cultural factors, such as seniority-based preferences and gender biases, present significant obstacles, often complicating the transition process. Additional challenges include resistance to modernized strategies, and sibling rivalry strongly influence succession outcomes in the Pakistani context and highlight the need for culturally sensitive governance approaches to improve business continuity.
Practical implications
Practical implications for family-owned businesses include early succession planning, structured governance mechanisms and comprehensive training for successors. Establishing family councils can minimize conflicts and align family goals. Addressing cultural biases, such as gender and seniority preferences, encourages merit-based succession, ensuring smoother transitions. These strategies enhance continuity, reduce disruptions and support sustained growth, particularly in culturally influenced contexts like Pakistani family-owned businesses.
Originality/value
By examining succession dynamics within the context of an emerging economy such as Pakistan, this study provides valuable insights into the unique cultural and organizational challenges facing FOBs. The findings enrich the understanding of succession in family enterprises and extend current knowledge on the influence of socio-cultural factors in business continuity.
Although family businesses represent the most common type of organization in the world, few survive as such after the second generation in the family - the succession process being one of the main factors influencing this result. This article delves into the understanding of the dynamics in family businesses during the succession process based on three theoretical frameworks: organizational identity, boundary theory, and role theory. A set of propositions elaborated from these frameworks are presented and applied to a qualitative case study of a small Peruvian family business through the interpretative analysis of the entrepreneurial narratives that affected its succession process. The conclusions and development of the case contribute to the existing literature on how roles are assumed in family businesses, allowing the family to work with the evolution of organizational identity in a successful business succession.
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Aunque las empresas familiares representan el tipo de organización más común en el mundo, son pocas las que sobreviven hasta una tercera generación, siendo el proceso de sucesión uno de los factores principales que influye en estos resultados. Este artículo profundiza el entendimiento de las dinámicas en las empresas familiares durante el proceso de sucesión, tomando como base tres marcos teóricos: la identidad organizacional, la teoría de contornos y la teoría de roles. Se presentan un grupo de proposiciones elaboradas a partir de estos marcos y se aplican a un estudio de caso cualitativo de una pequeña empresa familiar peruana, a través del análisis interpretativo de las narrativas empresariales que afectaron su proceso de sucesión. Las conclusiones y desarrollo del caso contribuyen a la literatura existente sobre cómo en las empresas familiares se asumen roles que permiten a la familia trabajar con la evolución de la identidad organizacional en una sucesión exitosa del negocio.
Family businesses are distinguished by their ability to be passed down through the generations and due to their stable business characteristics give a positive impetus to the sustainable development of the economy and employment. Furthermore, due to their unique advantages, such as cost reductions and the ability to overcome difficult conditions by mobilizing internal resources during financial crises, family firms stand out as resilient to economic shocks. Therefore, at a time when the global economy's financial stability and security are under threat, family companies are seen as highly efficient entrepreneurial activities and is one of the modern economy's backbones.
The study looks at the roles of family businesses in the global economy, along with some of their characteristics, as well as the key criteria used in classification of them and the impact of necessity motives on the creation of family enterprises. We can conclude that the primary factors utilized in determining these firms are ownership, family members' engagement in the management of the business and representation in the top management of the firm, and business transfer by generation.
Purpose
Although leadership style plays a critical role in succession planning practices and succession success, empirical examination of its influence on the relationship between succession planning and success of succession in family-owned SMEs has received little attention in the literature. This study examines the interactive effect of the various types of leadership styles as internal branding mechanisms on the success of succession in family-owned SMEs.
Design/methodology/approach
We analyzed the data from 124 managers/CEOs of family-owned SMEs that have at least transitioned beyond one incumbent leader using SPSS Version 29.
Findings
The result shows that succession planning practices are positively associated with succession success. It further shows that leaders who brand themselves as transformational and participatory leaders have a positive, significant interactive effect on the relationship between succession planning activities and succession success. The positive relationship between succession planning activities and succession success is dampened when managers rely too heavily on a transactional leadership style. Both autocratic and laissez-faire types of leadership have no significant interactive effect on the relationship.
Originality/value
The study is distinct from past studies. Until now, knowledge about the interactive effect of the various leadership styles as internal branding mechanisms on the relationship between succession planning practices like coaching, mentoring, job rotation and training and succession success in family-owned businesses remains limited. Theoretically, the study is pioneering in the sense that it is among the first studies that extends internal branding to succession planning in family-owned businesses. The study enlightened our understanding of how the various leadership styles and internal branding mechanism influence succession success in family-owned SMEs.
Even though the contemporary theories date back to the 1980s and 1990s, immigrant entrepreneurship is still considered a nascent field. In the last decade, influx of immigrants moving from the Middle East towards various destinations renewed the attention of researchers in the field and encouraged them to investigate different aspects of immigrant entrepreneurship. Family business phenomenon among migrant enterprises is the foremost of these research strands. A plethora of research pointed out the significance of embeddedness of immigrant entrepreneurs in their family. This chapter focuses on the family business framework among the immigrant-owned entrepreneurial ventures, the role of family on resources, succession plans, challenges, social relations and future pathways. To illustrate these points, in-depth interviews were conducted with eight migrant restaurateurs located in İzmir. Findings revealed that family businesses and migrant enterprises are deeply intertwined in many aspects. Succession plans appear to be vague and ambiguous for migrant restaurateurs in İzmir. Moreover, family plays an important role in acquiring various resources. Lastly, challenges faced by the migrant entrepreneurs can be overcome with the help of family members.
Transgenerational entrepreneurship entails the proactive development of a self-sustaining family-owned business that can be passed down through multiple generations, whereas family business succession refers to the transfer of business ownership and management to the next generation through inheritance. Choosing a successor in small and medium-sized enterprises requires a more comprehensive approach than in larger corporate firms due to fewer potential successors. The purpose of this research is to identify the challenges and factors that incumbents must consider when selecting a successor and implementing a succession plan. The study identifies challenges such as the involvement of an informal family member in the selection process, internal conflicts between the family and the business, the incumbent’s attachment to their leadership legacy, and the successor's readiness to assume responsibility. When it comes to succession planning, education, competence, demographic factors, relationships with family members and incumbents, experience, integrity, birth order, and primogeniture are all important factors to consider.
Existing literature suggests that family ownership (FO) reduces exploratory innovation (ERI). Contrary to this conventional view, some family firms are among the world's innovation leaders. Our study aims to reconcile this discrepancy by examining the role of restricted and extended socioemotional wealth in the relationship between FO and ERI. We posit that while FO may inhibit the capacity for ERI due to rigid mental models and cognitive convergence, it fosters the willingness for ERI owing to a long-term orientation. We argue that FO exhibits an inverted U-shaped effect on ERI. Empirical evidence from 938 Chinese-listed family firms between 2011 and 2021 supports our hypothesis. Our findings indicate that FO's influence on ERI is not uniformly detrimental and that a moderate level of FO can promote ERI. Additionally, the latter generational stage (GS) attenuates the inverted U-shaped curve, implying that family firms in the latter GS may exhibit lower levels of ERI. This study offers theoretical and practical insights into FO and technological innovation research domains.
The influence of business incubation systems on family businesses in African economies has not been thoroughly investigated despite the potential contribution of family businesses to Africa’s economic expansion and the attainment of development goals outlined in the Africa Development Agenda 2063 and the Sustainable Development Goals. Therefore, this study investigates the potential benefits that family businesses in Africa can derive from engaging in business incubation. This study utilised an integrative literature review methodology to investigate the research question. Twenty-three peer-reviewed articles were systematically selected from the Scopus, Web of Science, and Google Scholar databases using the following combination of phrases: “family business” and either “business incubation” or “business incubator”. The findings suggest ways to create a mutually beneficial relationship between family businesses and business incubators to improve long-term sustainability, promote collaboration, facilitate knowledge transfer, and foster an entrepreneurial ecosystem. It also recognises challenges, such as cultural alignment in family businesses. Business incubators in Africa can improve the sustainability of family businesses, such as during the succession, by offering support, resources, and guidance. The South African experience is a role model for the rest of the continent, in this regard. Future research should broaden the sources beyond the three databases utilised, including non-peer-reviewed sources such as grey literature, and extend the focus beyond developing economies.
Microfoundations research, generally conceptualized as explaining macro concepts and relationships in terms of micro-level behaviors and interactions, has been argued as critical to knowledge-building. Thus, we reviewed the family business literature to assess the state of microfoundations knowledge. Results indicate most research does not examine all microfoundational links. In addition, much of the research lacks a theoretical foundation. To provide structure to guide future inquiry, we offer theoretically-driven directions for family business research for each microfoundation link. This will help prevent microfoundations knowledge from developing in a disjointed manner, and allow future research to build more systematically.
Based on data from the Global University Entrepreneurial Students’ Spirit Survey (GUESS) 2018 project, this study examined the relationship between parental support factors and next-generation members’ succession intention and investigated the mediating effect of next-generation members’ commitment to the family firm. The results of the structural equation modeling analysis showed a mediating effect of next-generation members’ commitment to the family firm on the relationship between parental support and next-generation members’ succession intention. Specifically, normative commitment negatively mediated the relationship of succession intentions with parental career-related modeling and verbal encouragement. We employed social exchange theory to examine why these relationships occur. The findings of this study extend our knowledge of the parental support factors that potentially increase next-generation members’ commitment and succession intention.
Entrepreneurship and the family are fast becoming the linchpin of contemporary societies, especially since the global economic crisis of 2008 and the COVID-19 pandemic. Entrepreneurs confirm that support from family in addition to resources developed by the family has contributed to their ability to be resilient in crises and grow sustainable businesses. Policymakers thus need to create a favourable environment to enable societies to derive the benefits of the interplay between entrepreneurial activities and family support in times of crisis. This chapter aims to contribute to an understanding of how an integration of family resources into entrepreneurship positively influences socioeconomic development and fuels resilience and sustainability. As the environment continues to be volatile, uncertain, complex, and ambiguous globally, this chapter provides a theoretical and practical understanding of the interplay between family and entrepreneurship, in generating socioeconomic development, through resilient and sustainable entrepreneurial activities.
The existing body of literature on family business studies has expanded considerably. However, despite numerous literature reviews in past research, certain aspects, such as the evolving conceptual patterns in the field and the theories that guide it, remain unexplored. This article aims to uncover the conceptual patterns and theoretical foundations shaping the field, highlighting influential sources, institutions, countries, and authors within the realm of family businesses. The research utilizes bibliometric analyses and qualitative content analysis. Our findings determined that family business research produced its first theoretical studies between 1996 and 2004 (the first period), focusing on management, altruism, and agency issues during this period. During this period, agency theory dominated the field. In the period 2005–2013 (second period), we identified the following as emerging concepts in the field: diversification, entrepreneurship, family capital, family values, family involvement, relationship conflict, stewardship, succession, commitment, and psychological ownership. The dominant theories during this period were agency theory, resource-based theory, management theory, and institutional theory. In the third period, the prominent topics are the following: dynamic capabilities, stewardship, familiness, family dynamics, non-family employees, top management team, governance, trust, sustainability, corporate social responsibility, family management, family ownership, social capital, internationalization, corporate entrepreneurship, entrepreneurial orientation, family influence, knowledge sharing, board of directors, succession planning, succession process, emotions, gender, family control, and heterogeneity. In this period, in addition to the theories in the previous period, Socio-Emotional Wealth theory, social identity theory, social capital theory, stakeholder theory, and upper echelon theory are dominant in the field. The article concludes with recommendations for future research directions.
Purpose
The aim of this paper is to develop and test a behavioral theory of chief executive officer (CEO) succession and its performance consequences in family firms. Building upon performance feedback and slack research, the study hypothesizes that the effect of selecting a non-family outsider CEO on post-succession firm performance is contingent upon pre-succession firm performance aspirations level and the available slack resources.
Design/methodology/approach
The hypotheses are tested using a panel of 430 CEO successions in Italian family firms.
Findings
The findings show that a non-family outsider CEO is particularly valuable when performance resides far below aspiration levels, and there is a high availability of slack resources.
Originality/value
The study provides novel insights of the benefits and drawbacks of selecting non-family outsider CEOs offering behavioral-based theoretical explanations of performance consequences of CEO successions.
Purpose
This study seeks to fill a gap in the literature by examining the role of family firm succession in shaping the firm's approach to financialisation, which has received limited attention in the previous research. In addition, the study explores the influence of factors such as clan culture, concentration of control and generational differences on the relationship between succession and financialisation.
Design/methodology/approach
Data were based on a sample of 7,023 firm-year observations, compiled from the listed family firms in China's A-share. Several tobit models are used for analysing the data and testing the hypotheses.
Findings
Family firm succession is negatively related to the level of financialisation, and this relationship is influenced by clan culture, concentration of control and the stage of succession. Specifically, a higher clan culture, a greater concentration of ultimate control by the controlling family member and the dominance of the first generation in management strengthens the negative relationship between family firm succession and financialisation.
Originality/value
This study offers new insights into the consequence of family firm succession on a new area of the firm's strategy, i.e. financialisation. The study further advances the understanding of family firm succession by considering the role of clan culture, the concentration of control and the stage of the succession process.
Purpose
There are many factors that contribute to a person's career choice. The decision of whether or not to join the family business is certainly most influenced by parents. The aim of this research is to determine how much of an impact parents have on their next-generation family members' (NGFMs) decision to join the family business.
Design/methodology/approach
Following a positivistic paradigm, a cross-sectional design was followed using a quantitative, self-administered questionnaire through a judgemental sampling technique. A structured questionnaire was distributed to South African respondents who have parents who own a family business. The data were analysed using Statistica.
Findings
The results indicate that parental style, culture, self-efficacy and parental identification were found to influence the NGFMs' intention to join the family business significantly. Their decisions can be influenced by several factors, and parents can better manage these aspects by being aware of these influencing factors.
Practical implications
Given the imminent ageing of a large cohort of senior leaders, this research adds to the body of knowledge by highlighting the necessity for committed, willing and ready next-generation family members (NGFMs) to ensure efficient succession in family businesses. Therefore, effective management is required for succession-planning, particularly from the perspective of the successor.
Originality/value
This study, therefore, responds to calls for more in-depth quantitative studies on family businesses in general and on Black-owned family businesses in South Africa in particular. This study will evaluate the significance of parent influence on NGFMs to join Black family-owned businesses in South Africa. This research will assist family business owners and their families in understanding their children's intentions, designing and evolving an appropriate system to instill necessary traits, skills and attitudes in the children, preparing them for upcoming challenges, adding new perspectives to the family business and ensuring its profitability and long-term growth.
The purpose of this research is to study empirically the effect of autonomy in joining and legitimation of succession towards successors’ commitment to a family business. This research is conducted with a sample of 109 successor family businesses at the UC Family Business Community. The research shows that autonomy or the freedom in making choices has a significant effect on forming affective commitment, while legitimation also has a significant influence at a lower level. Autonomy in joining or freedom in making choices has a significant effect to form normative commitment, while legitimation of succession also has a significant effect at a lower level. Thestudy further shows that legitimation must be supported by autonomy to form an affective commitmentto the successor.
Purpose
This study explores the different survival strategies employed by family-owned small and medium-sized businesses in Nigeria. The study delves into the dynamics of ensuring business continuity from founders to successors and identifies the success factors that can facilitate seamless leadership transition outcomes.
Design/methodology/approach
This study utilised a qualitative multiple-case study approach, with the population consisting of founders from three medium-sized family businesses in Nigeria. Semi-structured interviews were the primary data collection tool used in the study. Furthermore, company documents were analysed to gain further insights into the leadership transition strategies employed in the selected businesses.
Findings
Successful transition and survival of family businesses are dependent on the founder's desire and support for transition, successor preparation, building trust and credibility in successors, and instilling a clear vision for the business.
Research limitations/implications
The study's findings will provide valuable insights to leaders of family-owned SMEs, specifically in the development of effective leadership transition action plans. It should be noted that the study is limited to three family-owned businesses in two locations in Nigeria, which may restrict the generalisability of the findings. Despite this, the study offers novel contributions to the current literature by presenting practical strategies for achieving the survival of family businesses in an emerging economy.
Originality/value
This study proposed strategies for business survival, continuity, sustainability and seamless leadership transition for small and medium-sized family-owned businesses. Importantly, the study recommends action plans for present and prospective family business leaders to deepen succession pathways.
Leader autonomy support (LAS) refers to a cluster of supervisory behaviors that are theorized to facilitate self-determined motivation in employees, potentially enabling well-being and performance. We report the results of a meta-analysis of perceived LAS in work settings, drawing from a database of 754 correlations across 72 studies (83 unique samples, N = 32,870). Results showed LAS correlated strongly and positively with autonomous work motivation, and was unrelated to controlled work motivation. Correlations became increasingly positive with the more internalized forms of work motivation described by self-determination theory. LAS was positively associated with basic needs, well-being, and positive work behaviors, and was negatively associated with distress. Correlations were not moderated by the source of LAS, country of the sample, publication status, or the operationalization of autonomy support. In addition, a meta-analytic path analysis supported motivational processes that underlie LAS and its consequences in workplaces. Overall, our findings lend support for autonomy support as a leadership approach that is consistent with self-determination and optimal functioning in work settings.
Electronic supplementary material
The online version of this article (10.1007/s11031-018-9698-y) contains supplementary material, which is available to authorized users.
Next-generation engagement is a key contributor to the success and continuity of family firms. Family relationships are an important factor in shaping such engagement. However, we know little as to how this engagement process unfolds, especially during the formative years of next-generation members. Using the principles of social cognitive theory and drawing on the career development, organizational behavior, and family business literature, we theorize the indirect influence of perceived parental support and psychological control on next-generation engagement in family firms through the mediating variables of self-efficacy and commitment to the family business. We discuss several possible avenues to test and extend this model in future research.
The purpose of this paper is to develop a conceptual model to explain and predict how organizational goals are transformed into organizational behavior. Using the theory of action phases as the overarching framework to explain how organizations and employees commit to goals and successfully pursue them, in conjunction with self-determination theory to explain the development of goal commitment at the individual level, a motivational model of organizational goal pursuit is proposed. This model takes into consideration mission and strategic goal development, organizational-level implementation intentions in the form of strategic plans and dynamic capabilities, individual goal internalization, and implementation plans at the individual level. These goal phases are proposed to be affected by the attraction, selection, socialization and management of organizational members. The model can serve to develop knowledge in the area of behavioral strategy by integrating motivational considerations into strategic management models.
Self-determination theory (SDT) conceptualizes basic psychological needs for autonomy, competence, and relatedness as innate and essential for ongoing psychological growth, internalization, and well-being. We broadly review the literature on basic psychological need satisfaction at work with three more specific aims: to test SDT’s requirement that each basic psychological need should uniquely predict psychological growth, internalization, and well-being; to test whether use of an overall need satisfaction measure is appropriate; and to test whether the scale used to assess basic psychological needs influenced our results. To this end, we conducted a meta-analytic review of 99 studies with 119 distinct samples examining the antecedents and consequences of basic need satisfaction. We conclude with recommendations for addressing issues arising from our review and also identify points for future research, including the study of need frustration and culture, integrating the basic needs with other motivation theories, and a caution regarding the measures and methods used.
Competent research methods and data analysis are essential components for the progression of family business research. To identify and evaluate empirical trends, and make suggestions for future research, we examine 319 empirical articles published in Family Business Review since 1988. These studies are compared with 146 family business research articles published in top-tier journals not dedicated to family business research over the same timeframe. While we substantiate growth in rigor and sophistication, we address specific family business research challenges regarding construct validity, generalizability, causality, temporality, and multilevel issues. Suggestions are provided for future empirical research across six major topical areas.
Family business and human resource management scholars suggest that firms whose leaders experience affective commitment are more likely to achieve their goals. Building on self-determination theory, we propose a model in which parent-founders promote affective commitment in child-successors by supporting their psychological needs for competence, autonomy, and relatedness within the family business. We conclude by exploring the ethical implications of different parenting approaches in encouraging intrafamily succession.
Family businesses (FBs)enterprises that are significantly influenced by family members and kinship tiesare ubiquitous and play a crucial role across all world economies. Because of the embeddedness of family and business systems in FB, these organizational forms are theoretically distinct from their non-family counterparts. Curiously, FBs have been largely overlooked in the organizational behaviour (OB) literature. The limited available research at the interface of OB and FB highlights the importance of FB as a unique context to advance OB theories, and of OB as a promising discipline to increase our understanding of FB. In a selective review of literature focused on the four topics of values and goals, leadership and power, trust and justice, and conflict, we discuss how insights from the general theory of communal and exchange relationships open exciting avenues for research at the FB-OB interface. Rich fruits of intellectual harvest await scholars who focus on behavioural research in FB.
Self-determination theory proposes a multidimensional conceptualization of motivation comprising autonomous and controlled forms. Whereas autonomous motivation relates positively to individuals’ optimal functioning (e.g., well-being, performance), controlled motivation is less beneficial. To be able to use self-determination theory in the field of organizational behaviour, the Multidimensional Work Motivation Scale was developed and tested using data from 3435 workers in seven languages and nine countries. Factorial analyses indicated that the 19-item scale has the same factor structure across the seven languages. Convergent and discriminant validity tests across the countries also indicate that the psychological needs for autonomy, competence, and relatedness as well as the theoretically derived antecedents to work motivation (e.g., leadership and job design) are predictably related to the different forms of motivation, which in turn are predictably related to important work outcomes (e.g., well-being, commitment, performance, and turnover intentions). Implications for the development of organizational research based on self-determination theory are discussed.
The objective of this study was to assess the determinants of the readiness of the senior generation owner-managers to finally transfer the management and control of the family business to the younger generation. Data from 504 questionnaires linked to 81 family businesses were collected and analysed. An Oblimin oblique rotation was carried out on the principal components of the exploratory factor analysis. Five factors with eigen-values greater than one, explaining 62.64 per cent of the variance, were extracted. These five factors describing the theoretical dimensions of the dependent variable were: the senior generation owner-manager’s readiness to let go, and the independent variables of retirement planning, perceived suitability of the successor, estate planning, and the perceived liquidity of the business after the transfer. No significant practical differences relating to these five factors could be found between the perceptions of male and female respondents, the senior and younger generation family members or family members involved in medium-sized or small businesses. Practical recommendations are suggested to ensure a smooth final transfer of the management and control of the business to the younger generation family members.
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In this article, a framework is provided for analyzing conditions that lead to positive or negative relations between trustworthiness and formal control in the context of manager-subordinate relationships, a domain often discussed controversially in the literature. In analyzing the relationship between managerial formal control and subordinates' trustworthiness, the author draws on self-determination theory. Self-determination theory is useful in showing how to link characteristics of organizational regulation (i.e., managerial formal control) with individual intentions (i.e., subordinates' intentions to behave in a trustworthy fashion). Subsequently, empirical findings related to formal control and trustworthiness are integrated into this framework to deduce a set of propositions that can be tested in the future.
This research examines data collected as part of a 10-year case study of the creation and evolution of organizational control during organizational founding. Past research has taken a cross-sectional approach to examining control use in mature, stable organizations. In contrast, this study examines organizational controls during the founding period and takes a longitudinal perspective on organizational control. By examining how organizational controls are created and evolve through specific phases of the founding period, the research also provides new data and insights about what drives shifts in the use of various types of control. Specifically, this research sheds light on the role of imbalance among formal and informal controls as the key driver of shifts in control configurations, and provides a step toward making organizational control theory more dynamic.
Because involving lower echelon employees in decision making requires risk on the part of managers, we suggest that certain contextual features must be in place for managers to be more willing to do so. We hypothesize that managers’trust in employees, and two impersonal substitutes for trust—performance information and incentives—will increase managers’ involvement of lower echelon employees in decision making. Managers’involvement of lower echelon employees is further hypothesized to enhance organizational performance. Path analysis of survey data from the automotive industry provides support for the hypotheses.
This article examines the relationship between managerial trust and employee empowerment. Hypotheses derived from leader-member exchange (LMX) theory suggest that the quality of leader-member relations mediates the linkage between managerial trust and employee empowerment. Data from 128 manager-employee dyads from 13 organizations support this model. Whereas previous research has pointed to the influence of organizational and social structural variables on empowerment, this research shows the importance of manager-employee relationships on perceived empowerment. Implications for researchers and managers leading empowerment initiatives are discussed.
A longitudinal study of family business leaders nearing retirement age examined the effects of goal adjustment capacities (disengagement and reengagement) on retirement planning. Goal disengagement predicted taking concrete steps to prepare retirement, whereas goal reengagement was related to having positive retirement expectations. Family business leaders with high goal reengagement capacities who trusted their successor’s abilities set an earlier retirement date than others. Leaders with poor goal disengagement capacities who did not trust their successor were unable to improve their retirement expectations over time. This study shows the importance of psychological variables in the retirement planning process of family business leaders.
Are there variations in behaviors and leadership styles of next generation family members or descendants who join their family business due to different forms of commitment? Evidence from a dual respondent study of 109 Canadian and Swiss family firms suggests that descendants with affective commitment to their family firms are more likely to engage in discretionary activities going beyond the job description, thereby contributing to organizational performance. Next generation members with normative commitment are more likely to engage in transformational leadership behaviors. Both affectively and normatively motivated next generation members use contingent reward forms of leadership. A surprising finding of this study is the binding force of normative commitment on positive leadership behaviors of next generation members. This study empirically tests the generalizability of the three-component model of commitment to family businesses, a context in which different forms of commitment may play a unique role.
This study addressed the nature and functioning of relationships of interpersonal trust among managers and professionals in organizations, the factors influencing trust's development, and the implications of trust for behavior and performance. Theoretical foundations were drawn from the sociological literature on trust and the social-psychological literature on trust in close relationships. An initial test of the proposed theoretical framework was conducted in a field setting with 194 managers and professionals.
Effect sizes are underappreciated and often misinterpreted—the most common mistakes being to describe them in ways that are uninformative (e.g., using arbitrary standards) or misleading (e.g., squaring effect-size rs). We propose that effect sizes can be usefully evaluated by comparing them with well-understood benchmarks or by considering them in terms of concrete consequences. In that light, we conclude that when reliably estimated (a critical consideration), an effect-size r of .05 indicates an effect that is very small for the explanation of single events but potentially consequential in the not-very-long run, an effect-size r of .10 indicates an effect that is still small at the level of single events but potentially more ultimately consequential, an effect-size r of .20 indicates a medium effect that is of some explanatory and practical use even in the short run and therefore even more important, and an effect-size r of .30 indicates a large effect that is potentially powerful in both the short and the long run. A very large effect size (r = .40 or greater) in the context of psychological research is likely to be a gross overestimate that will rarely be found in a large sample or in a replication. Our goal is to help advance the treatment of effect sizes so that rather than being numbers that are ignored, reported without interpretation, or interpreted superficially or incorrectly, they become aspects of research reports that can better inform the application and theoretical development of psychological research.
Nordstrom and Jennings (2017) provide an in-depth view of the Hutterite Brethren community to theorize family business practices and their association with familial well-being. Drawing from self-determination theory, we extend their model to provide additional theoretical development regarding the role of task and enterprise practices in satisfying basic needs (autonomy, competence, and relatedness), promoting motivation, and fostering family member well-being. Although the Hutterite community’s practices likely facilitate high levels of competence and relatedness, there is potential for autonomy need deficits. As such, we address areas for future research regarding need fulfillment and well-being in family businesses.
Family businesses represent a major economic factor in western economies.This paper illustrates the significance of and problems involved with succession in family businesses on the basis of empirical data on Austria and Germany. The paper presents a number of ideas on the systems of the family and the business from both interdisciplinary and dynamic perspectives and sheds light on generation changes in detail. Finally, a number of recommendations are made for future dynamic/systemic research on succession.
Bitter personal experience and meta-analysis converge on the conclusion that people do not always do the things that they intend to do. This paper synthesizes research on intention–behavior relations to address questions such as: How big is the intention–behavior gap? When are intentions more or less likely to get translated into action? What kinds of problems prevent people from realizing their intentions? And what strategies show promise in closing the intention–behavior gap and helping people do the things that they intend to do?
What do entrepreneurs become when they have a long-term personal relationship, get married, and/or have children? Their businesses mature Into family firms. What do entrepreneurial study centers do when they realize the above? They see an opportunity to start a family business program. What do accounting and legal firms do to try to reach this market? They sponsor a program. What happens to a psychologist, turned entrepreneur professor, who becomes Involved in a family business program? He Is resurrected as a family business professional. The focus of this paper Is the lessons learned during the journey towards developing a unique family business program as part of an entrepreneurial studies center In a major research university.
Many decisions are based on beliefs concerning the likelihood of uncertain events such as the outcome of an election, the guilt of a defendant, or the future value of the dollar. Occasionally, beliefs concerning uncertain events are expressed in numerical form as odds or subjective probabilities. In general, the heuristics are quite useful, but sometimes they lead to severe and systematic errors. The subjective assessment of probability resembles the subjective assessment of physical quantities such as distance or size. These judgments are all based on data of limited validity, which are processed according to heuristic rules. However, the reliance on this rule leads to systematic errors in the estimation of distance. This chapter describes three heuristics that are employed in making judgments under uncertainty. The first is representativeness, which is usually employed when people are asked to judge the probability that an object or event belongs to a class or event. The second is the availability of instances or scenarios, which is often employed when people are asked to assess the frequency of a class or the plausibility of a particular development, and the third is adjustment from an anchor, which is usually employed in numerical prediction when a relevant value is available.
Family firms are thought to pursue nonfinancial goals that provide socioemotional wealth, but socioemotional wealth is feasible only with family control of the firm. Using prospect theory, we hypothesize that socioemotional wealth increases with the extent of current control, duration of control, and intentions for transgenerational control, thus adding to the price at which owners would be willing to sell their firms to nonfamily buyers. Findings from two countries show that current control has no impact, and duration of control has a mixed impact. However, intention for transgenerational control has a consistently positive impact on the perceived acceptable selling price.
In this study, we view the contracts of top managers from an integrated agency theory-trust perspective, arguing that two conditions reflecting CEO risk bearing, top management team (TMT) behavioral uncertainty and CEO vulnerability, are negatively related to a CEO's perceptions of TMT benevolence toward him-/herself, which in turn influence the protective features of TMT contracts. Model tests on data from 122 family-owned firms in Spain support our hypotheses overall. Agency theory may be enhanced by accounting for a CEO's perceptions (as principal) of TMT benevolence and for the effect of those perceptions on contracts with TMT members (as agents).
Explains how to recognize, anticipate, and solve the problems created by the cultures of family firms as they grow and mature. Shows how culture can determine the success or failure of the firm based on comparative case studies of a wide range of successful and unsuccessful firmsincluding small businesses, new and well-estalbished firms, and such large corporations as Du Pont and Levi Strauss.
Distinguishing sufficient conditions from necessary conditions is crucial in both theoretical and empirical studies. We propose that the sufficiency condition for family involvement to produce family-oriented particularistic behavior in a firm requires the presence of both ability and willingness. We demonstrate how the omission of this sufficiency condition in commonly used theoretical models employed to explain how family involvement affects firm behavior can result in theoretical limitations and empirical indeterminacy. Finally, we discuss how considering both ability and willingness can lead to better theory, more generalizable empirical findings, and help explain heterogeneity among firms with family involvement.
Goal setting in family firms is very complex due to the interplay between family and business systems. However, this topic is largely overlooked in family business research. In this qualitative study of goals and goal formulation processes among 76 organizational members across 19 family firms, we identify goal diversity as a direct consequence of the overlap between the family, ownership, and business systems. We found that goal diversity is expressed more strongly in the proximity of generational transitions, triggering social interaction processes through which organizational members contrast their goals. Our findings suggest that different types of social interactions lead to different behaviors, with familial social interactions being more effective than professional social interactions in managing goal diversity toward the formation of collective commitment to family-centered goals.
The purpose of this study was to empirically investigate the relationship between psychological need satisfaction and intrinsic motivation as proposed by self-determination theory. Three competing hypotheses regarding the relations between need satisfaction and intrinsic motivation were tested: additive, synergistic, and balance. Two cross-sectional studies involving 1,254 employees from a broad range of Norwegian service organizations partly supported the first two hypotheses. Although the relationship between satisfaction of the needs for autonomy and relatedness with intrinsic motivation were significant, the one with satisfaction of the need for competence was not. Instead, competence was only related to intrinsic motivation when autonomy was high. Implications for practice and future research are discussed.
This paper presents a model of trust and its interaction with information flow, influence, and control, and reports on an experiment based on the model to test several hypotheses about problem-solving effectiveness. The subjects were managers and the independent variable was the individual manager's initial level of trust. Groups of business executives were given identical factual information about a difficult manufacturing-marketing policy problem; half the groups were briefed to expect trusting behavior, the other half to expect untrusting behavior. There were highly significant differences in effectiveness between the high-trust groups and the low-trust groups in the clarification of goals, the reality of information exchanged, the scope of search for solutions, and the commitment of managers to implement solutions. The findings indicate that shared trust or lack of trust apparently are a significant determinant of managerial problem-solving effectiveness.
Succession in owner-managed firms is rarely planned. Furthermore, it rarely occurs during the lifetime of the owner-manager. Even when it does, it is often ineffective. Although the literature cites various explanations as to the problems associated with succession in owner-managed firms, these explanations lack a coherent and encompassing theory to explain its dynamics. The author proposes that the issue of succession in owner-managed firms be viewed under the prism of extraversion, a psychological attitude that may help clarify succession's most fundamental features and explain the factors underlying its process.
We introduce a personality inventory designed to measure six major dimensions of personality derived from lexical studies of personality structure. The HEXACO Personality Inventory (HEXACO-PI) consists of 24 facet-level personality trait scales that define the six personality factors named Honesty-Humility (H), Emotionality (E), Extraversion (X), Agreeableness (A), Conscientiousness (C), and Openness to Experience (O). In this validation study involving a sample of over 400 respondents, all HEXACO-PI scales showed high internal consistency reliabilities, conformed to the hypothesized six-factor structure, and showed adequate convergent validities with external variables. The HEXACO factor space, and the rotations of factors within that space, are discussed with reference to J. S. Wiggins' work on the circumplex.
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