A Knowledge Framework for Understanding Small Family Business Succession Process

IUP Journal of Knowledge Management, Forthcoming

Posted: 29 Jul 2008 Last revised: 24 Jan 2011

Date Written: July 29, 2008

Abstract

Business succession in family firms has been one of the most investigated topic through theoretical, empirical and anecdotal studies (Sharma, 2004). However, we argue that this bulk of literature seems to neglect the role of the most intangible source of competitive advantage of firms: knowledge. At the same time, small family firms, although representing most part of the firms and facing higher risks of failure due to succession, did not receive much interest (Ventor et a., 2005). The present study attempts to contribute to the literature shedding some lights on the business succession in small family firms informed by an intellectual capital perspective. The paper develops a theoretical model drawing from intellectual capital literature (Mouritsen, 2004; Rastogi, 2003) and knowledge management concepts of knowledge repository (McGrath and Argote, 2000) and knowledge transfer (Szulansky, 1999).

We assume that business succession is a process during which the intellectual capital modifies, with the risk of a slump loss due to the incumbent retirement, and so it needs to be managed. In particular, knowledge transfers through the interaction among the incumbent, the successor and the organisation. This theoretical result illuminates how small family firms can maintain and increase their competitive advantage during the succession process, reducing the risk of failure.

Keywords: Family firms, knowledge, intellectual capital, succession

JEL Classification: M10, M13

Suggested Citation

Bracci, Enrico, A Knowledge Framework for Understanding Small Family Business Succession Process (July 29, 2008). IUP Journal of Knowledge Management, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1184620

Enrico Bracci (Contact Author)

University of Ferrara ( email )

Via Voltapaletto, 11
Via Voltapaletto, 11
Ferrara, Ferrara 44121
Italy

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