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

Abstract

Examines the factors that affect the perceived successof the succession process in a family business.For purposes of thisanalysis, a family business is defined as a business in which the same familyhas ownership, intends to pass the business to the next generation, and workstoward the formal or implicit vision of the business. Factors identified in previous literature include the willingness of thesuccessor to take over the business, the preparation level of the successor,and the relationship between the owner-manager and successor. These factorswere used to develop a questionnaire and corresponding model.Small andmedium-sized family businesses in South Africa were the focus of thisanalysis. Results show that the willingness of the successor to take over the familybusiness has a large impact on not only the perceived success of the successionprocess but also on the continued profitability of the business. Additionally,the belief of those surveyed is that working elsewhere, having a formaleducation, and receiving mentoring from a non-parent allows the successor to bemore competent and more likely to grow the business.(SRD)

Keywords: Succession, Family firms, Operator ownership, Commitment, Family-work relations, Interpersonal relations, Executive succession