The Paradox for the Family Firm CEO: Owner Age Relationship to Succession-Related Processes and Plans

Posted: 9 Nov 2009

See all articles by James P. Marshall

James P. Marshall

Indiana University

Ritch Sorenson

Texas Tech University - Area of Management

Keith Brigham

affiliation not provided to SSRN

Elizabeth Wieling

affiliation not provided to SSRN

Alan Reifman

affiliation not provided to SSRN

Date Written: 2006

Abstract

Many family firms fail to transitionsuccessfully to second and third generations. This study considers theories andmodels of succession planning. Succession planning is examined as attitude andoutcome variables. The study argues that adding demographic (age of the familybusiness owner) and behavioral (conflict management and leadership) variablescan improve existing theoretical frameworks. It was hypothesized that CEO age has direct and indirect influences onsuccession planning. Research is based on survey data from 205 U.S. familybusiness owners. A structural equation model was used to examine relationshipsamong the variables. It was found that older owner age is positively associatedwith the development of formal succession plans. However, increased age is associated with approaches to conflict managementand competitive conflict thatlimit development of formal successionplans. Increased age is negatively associated with cooperative conflict, whichitself is positively associated with the importance of succession planning,which was positively associated with formal succession plans. Although not related to age, it was found that autocratic and relationalleadership were positively related to the importance of succession planning.Overall, results indicate that both demographic and behavioral variables affectthe extent of succession planning and should be included in succession models.Concludes with practical applications for practitioners for promotingsuccession planning in family businesses. (TNM)

Keywords: Behavioral traits, Succession planning, Family firms, Succession, Management techniques, Conflict management, Age, Leadership styles, Chief executive officers (CEOs)

Suggested Citation

Marshall, James P. and Sorenson, Ritch and Brigham, Keith and Wieling, Elizabeth and Reifman, Alan, The Paradox for the Family Firm CEO: Owner Age Relationship to Succession-Related Processes and Plans (2006). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN: https://ssrn.com/abstract=1502454

James P. Marshall

Indiana University ( email )

107 S Indiana Ave
100 South Woodlawn
Bloomington, IN 47405
United States

Ritch Sorenson

Texas Tech University - Area of Management ( email )

United States
806- 742-2173 (Phone)
806- 742-2308 (Fax)

HOME PAGE: http://management.ba.ttu.edu/Faculty/RSorenson.htm

Keith Brigham

affiliation not provided to SSRN

No Address Available

Elizabeth Wieling

affiliation not provided to SSRN

No Address Available

Alan Reifman

affiliation not provided to SSRN

No Address Available

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