Coherence between Values and Successor Socialization: Facilitating Family Business Continuity

Abstract

The problem of CEO succession is critically important yet unique and distinct from that of turnover at other levels. Research in management agrees with the findings in family business research regarding the preference for an insider as successor, more specifically a family insider. Successful family business continuity requires raising potential successors who will add value to the firm by seeking new opportunities and fostering entrepreneurship. Parties external to the firm are likely to view succession as a signal about the institution's future; this makes CEO succession a critical event for virtually every organization. In this paper the authors outline a model that presents the different coherent options for value transmission and successor socialization that facilitate family business continuity from first to second generation. The findings are grounded in combined qualitative and quantitative techniques applied to an extensive research project involving in-depth cross-case analysis. Based on the results, the authors identify issues that families and practitioners should take into account to maintain consistency during the succession process. Professionals can assist families in preparing for continuity by: 1) identifying family value systems; 2) analyzing the variables at play in the family-business system, and 3) proposing a coherent option of continuity that both family and business can pursue. The model presented in this paper is intended to help families and practitioners follow this path by pointing out coherent combinations of values and family business characteristics and different successor socialization processes.

Keywords: Family business, succession, values, succesors, socialization