Successor Team Dynamics in Family Firms

Family Dynamics

One element of family dynamics is the presence of altruism. Schulze, Lubatkin, and Dino (2003) proposed that agency relationships in family firms are embedded in parent–child relationships found in the household and are therefore characterized by a willingness of family firm leaders to help family members without expecting an external reward, that is, altruism. Self-interest explains only some aspects of human behavior, not all (Steier, 2003). In family firms, owner-managers may attempt to satisfy their own needs and the objectives of the firm together. In this sense, altruism can mean placing the objectives of the business ahead of the self-serving objectives of the individual. Moreover, this feeling of altruism compels parents to care for their children in the family firm, for family members to consider the feelings and desires of other family members, and for children to reciprocate with loyalty and commitment to the family firm (Schulze, Lubatkin, Dino, & Buchholtz, 2001).

Other issues associated with altruism are that successors in the family firm may develop an increased sense of entitlement (Lubatkin, Durand, & Ling, 2007). However, parents are often expected to provide for all of their potential successors equally, even though they may have a preference for one child over another (Eddleston & Kidwell, 2012). Furthermore, children may take advantage of their parents’ generosity by free riding (leaving work for others to do), shirking (failing to provide appropriate performance), squandering the family’s money, and remaining dependent on their parents (Schulze et al., 2003). The family firm leader may seek to establish a stewardship culture, which is designed to promote the welfare of all stakeholders, including future generations and nonfamily employees (Le Breton-Miller, Miller, & Lester, 2011) to pervade the entire company (Pearson & Marler, 2010). However, even for the parents in this context, generosity is to some extent motivated by the desire to enhance personal welfare.

Predecessors and Successors

A good working relationship between the predecessor (incumbent) and the successor(s) is vital to any transfer of power (Cabrera-Suarez, De Saa-Perez, & Garcia-Almeida, 2001). Additionally, the predecessor (incumbent) must be willing to let go of the control of the business (Dyer, 1986). The predecessor must delegate authority and allow the successor(s) to make decisions and mistakes (Handler, 1990). Although control of the succession process may still reside mainly with the predecessor generation, the readiness of successors is also important (Brun de Pontet, Wrosch, & Gagne, 2007). An interested and capable successor is necessary for successful succession to occur (Birley, 2002).

Stavrou and Swiercz (1998) grouped the reasons that children of family business owners enter the business into four categories: family, business, personal, and market dimensions. The family dimension refers to behavior relating to family membership, dynamics, needs, values, relationships, and desires. The personal dimension concerns behavior related to individual needs, goals, and abilities. The business dimension concerns behavior related to the business practices and operations of the firm. Finally, the market dimension concerns employment opportunities in the business community for the offspring of the family business owner.

Evidence exists that the presence of a trusted successor may push the incumbent family leader to plan for succession (Sharma et al., 2003). The successor(s) must demonstrate the necessary skills, performance, and experience for leading the firm (Barach & Gantisky, 1995; Barach, Gantisky, Carson, & Doochin, 1988). The successor(s) need a thorough training regimen to acquire firm-specific knowledge and to develop his or her capabilities (Morris, Williams, Allen, & Avila, 1997). Exposure at a young age to the company allows successors to learn about the people and processes involved (Ward, 1987). Furthermore, the successor(s) must be willing and fully committed to the process (Barach & Gantisky, 1995).

Researchers report that the most important attributes for successors are integrity and commitment to the business (Chrisman, Chua, & Sharma, 1998; Sharma & Rao, 2000). Successors become committed to the family firm through four bases: affective (perceived desire), normative (sense of obligation), calculative (perceived opportunity costs), and imperative (perceived need; Sharma & Irving, 2005). Shepherd and Zacharakis (2000) assert that incumbents should structure the succession so successors feel as though they have invested their own time and money in the family firm. This investment by successors will lead to assignation of a higher value of the business and a stronger desire to retain the firm, rather than to sell it.

The Succession Process

Succession is more of a lengthy process than an event in which there is a management and ownership change (Handler, 1994) unless circumscribed by early or unanticipated death or disability of the incumbent or successors. Family business scholars have hypothesized various models concerning the process of succession (Barach & Gantisky, 1995; Churchill & Hatten, 1987; Handler, 1990; Longenecker & Schoen, 1978). Handler (1990) and Churchill and Hatten (1987) favored a four-stage model, while Longenecker and Schoen (1978) proposed a seven-step process of succession that begins with childhood and is highlighted by the entry of the successor into the family business at a lower level of management and later the ascension of the successor to the leadership of the firm. Successors are prepared or groomed for many years to accept their role of responsibility in the family firm. Handler (1990) describes the process of succession as a mutual role adjustment between the members of the incumbent and successor generations. The incumbent must relinquish power, and the successor must demonstrate the ability and desire to assume control of the firm.

Cater and Kidwell (2014) proposed a model of stages of successor group development in family firms, identifying the roles of the incumbent family leader and the successors. In Stage 1, the incumbent begins planning for retirement and searches for possible successors, while the successors are identified as candidates. In Stage 2, the incumbent assesses possible successors and the successors enter the business, learn to manage, and may compete with each other. In Stage 3, the incumbent chooses the successor group and reduces his or her leadership role and the successors are identified and chosen. In Stage 4, the incumbent exits from company leadership by retirement or death and the successors operate as a leadership group.

Decision Making in Teams

Organizational research indicates that the decision making of groups or teams is often superior to that of individuals because groups contain a wider range of viewpoints, can accumulate more facts and knowledge, and can consider more alternatives (Harrison, 1975). Compared to individual decision making, groups typically move at a slower pace, requiring more time to make decisions than individuals, which may be problematic when a rapid response is needed (Ebert & Mitchell, 1975). Groups and teams may be characterized as homogeneous (having similar qualities) or heterogeneous (diverse or having dissimilar qualities). Diversity is typically measured in demographic variables, such as race, ethnicity, gender, and age, or attributes, such as knowledge, skills, values, or tenure (Jackson, May, & Whitney, 1995). Research suggests that as diversity in groups and teams increases, affective consequences such as satisfaction and identification with the group decrease and conflict increases. Cognitive consequences such as the quantity and quality of new ideas increase with greater diversity (Milliken & Martins, 1996; Pelled, Eisenhardt, & Xin, 1999).

Family Business Teams

One way family teams can influence the functioning of the family firm is through the establishment of teams of sibling owners (Pearson et al., 2014). For example, Cater and Justis (2010) found eight factors or conditions that affected team or shared leadership in multigenerational family firms. Positive factors enhancing shared leadership included long-term orientation, close communication and shared understanding among group members, timely succession planning, and higher decision quality. Factors inhibiting the implementation and development of shared leadership included resistance to change, failure to release control by incumbent leaders, reporting relationship confusion, and increased decision time. Employing a case study analysis of six family firms, Cisneros-Martinez and Deschamps (2012) examined teams of siblings in the succession process, identifying them as entrepreneurial teams. Farrington et al. (2012) reported three variables—physical resources, skills diversity, and strategic leadership—to be significant determinants for the success (measured by financial performance and family harmony) of sibling teams in family firms. Cater and Kidwell (2014) found that excessive competition among successor group members hindered group effectiveness, whereas a pattern of cooperation, unified implementation of decisions, mutual agreement to share power, and development of trust enhanced successor leadership group effectiveness. Cater and Kidwell (2014) probed the concept of successor group governance, recognizing four variations of sharing power and authority: (1) disagreement and group destruction, (2) a dominant leader in an unequal group, (3) first among equals, and (4) complete equals.

Conflict in Family Businesses

Davis and Harveston (2001) divided conflict in the family firm into two categories: substantive (task disagreements) and affective (emotional issues). In their study, Davis and Harveston found an increasing level of conflict as firms move into second- and third-generation involvement. Additionally, family members may feel as though they are locked into the firm, which makes conflict more personal (Schulze et al., 2003). Kellermanns and Eddleston (2004) identified family firm conflict in three areas: tasks, processes, and relationships. Task conflict revolves around differences concerning the goals and strategies of the firm. Process conflict involves disagreement concerning the manner in which work is accomplished in a family business and which family members should perform the tasks. Moderate levels of task and process conflict can help a firm succeed, while very high or very low levels of task and process conflict work against the firm. Relationship conflict includes personal animosity and issues of compatibility that may spill over into negative emotions, such as annoyance and irritation. These problems may result in personal threats, political actions, and the building of factions in the firm. Kellermanns and Eddleston (2004) propose that altruism—a moral value by which individuals act in a beneficial manner to others without expecting an external reward (Schulze et al., 2001)—helps reduce relationship conflict in the family firm. By gradually working younger family members into the firm, listening to their ideas, and fostering incremental change, incumbent leaders also may reduce relationship conflict in the firm.

A study by Sorenson (1999) found that a collaboration strategy helped family business leaders manage conflict most effectively. Collaboration refers to finding a “win–win” situation in which both parties achieve their goals and requires time, effort, and good interpersonal skills. Accommodation and compromise strategies worked well to manage family issues, but competitive strategies yielded negative results.

In summary, there is a solid theoretical foundation of research on family dynamics and succession, and teams and conflict in family business. There have been studies done in the specific area of successor leadership teams in family firms (Cater & Justis, 2010; Cater & Kidwell, 2014; Cisneros-Martinez & Deschamps, 2012; Farrington et al., 2012; Pearson et al., 2014). However, gaps exist in this literature, and we seek to add to existing evidence in regard to the entrance of multiple successors into the family business, the formation of successor leadership teams, the positive or negative performance of those teams as evidenced by their continuity in the family firm or dissolution, and the resulting outcomes for their respective firms—survival, failure, or the opening of new family firms.

In-Depth Interviews

One of the authors conducted the in-depth interviews. These tape-recorded interviews were conducted individually with respondents at each family firm, totaling 48 participants. We transcribed about 36 hours of interviews, which varied in length from 30 minutes to 1½ hours, averaging 45 minutes each. The transcribed interviews totaled 487 pages, for an average of 10 pages per respondent.

Documents

The researchers asked respondents for company documents and requested newspaper and magazine articles, advertisements, and company catalogs. As necessary and appropriate, the authors gathered documentary information independently. Whereas observations and documents about each company were collected, these were supplemental in nature. The in-depth interview transcriptions formed the basis of the data analysis.

Positive Successor Team Performance

Although we separated the respondent firms in our study into a positive track and a negative track, it is important to note that we observed variance in the performance of the successor teams. We carefully studied the successor teams in the positive track of our study and recognized variance of performance among them. We analyzed the successor teams in terms of the four Cs—context, composition, competencies, and change capabilities (Dyer et al., 2013) as well the size and growth of the respondent companies. On these bases, we categorized the surviving successor teams as high performance, medium performance, or low performance. Three respondent companies in our study stand out as possessing high-performing successor teams: Company 2, Company 11, and Company 12. Medium-performing successor teams were found at Company 1, Company 3, Company 4, Company 7, Company 13, and Company 14. Low-performing successor teams were present at Company 6, Company 8, and Company 10 (see Table 5).

Another issue is the length of time that a successor team works together. When we considered the three highest performing companies and their successor teams (Companies 2, 11, and 12), we found that the successor team at Company 11 has worked together for 25 years, but the successor teams at Companies 2 and 12 have had changes and additions in the past 3 years. Yet these are the highest performing successor teams in our study. In medium-performing teams in our study, the successor team at Company 1 has been working together for 30 years although one member has just retired. At Companies 3, 4, 7, and 9, there have been changes in the composition of the successor teams in the past 5 years as well. Therefore, while it makes sense that teams that have worked together for many years will perform better, the successor teams in our study are different from most management teams because they have known each other their entire lives, and this may mitigate the importance of time working together.

A functional successor leadership may be formed when the elements of division of tasks, development of team members’ skills, establishment of a pecking order, and division of ownership are correctly managed by the predecessor and accepted by the successors. Then, the family business may follow what we call a positive track. In the positive track, successors work together cooperatively, and the firm continues to operate successfully and survive as a family business. “Because of the family business, I feel more connected and responsible for its success. I put a lot more of myself into this than if I were working somewhere else in a desk job,” commented Respondent A at Company 8. Once the successors have entered the business and formed a group, they must learn to work together. We found that the terms working together and getting along were used repeatedly to describe family business operations (see Table 3).

At Company 12, Respondent C related his experience working with his cousins:

I work with (my cousin) D—– at the operational level, more than the other cousins. We all work in the same hallway. We’re all in the same building, same hallway. We’re all pretty close. We see each other. . . . We work pretty well together.

Respondent D at Company 12 confirmed this assessment, “We do work well together. . . . There are times that everybody has their ideas and sometimes we don’t always agree, but there’s never been a fight about it. So we get along pretty well.” With individuals having different ideas, substantive conflict exists even in close families that work together. The important factor is that the conflict focuses on business issues and does not spill over into relationship differences and personal conflict.

There may be differences in personality and management style among the successors, but the sum effect should be a complementary management team. For example, Respondent A at Company 11 described the second-generation management team as follows:

They are almost polar opposites. . . . My dad was kind of the rebellious teenager and my aunt was the dutiful daughter, and then after college, they kind of flipped. My aunt is the fun, crazy aunt and my dad is the obliged son. So, they are very different, but they and I think all of my family gets along surprisingly well. They just aren’t confrontational, so even if they were mad at each other, you’d never really know.

In the positive track, respondent companies found ways to turn their family situations into successful business operations. Company 7, which was characterized by heavy family involvement with three generations and 35 family members, served as an excellent example of problem solving and decision making. The 77-year-old founder and family patriarch is “the captain of the ship. I think what’s kept us prosperous and what’s kept us going is that there is still a captain in this ship and we all answer to the captain when it comes down to,” explained Respondent A at Company 7. The successor team is treated equally. “It is equal because we get the same salary, every single one (of the successor team). Respondent A makes the same money that I make. Equal pay for everyone, even if one of us sells more,” explained Respondent C in Company 7. The family patriarch left daily operation of the company to the successor team. “He is still the boss. At each of the three restaurants, it is divided. That way nobody gets into each other’s business. Each one makes their own decisions, but overall, my grandparents make the decisions, specifically my grandfather,” stated Respondent B at Company 7. Finally, the family patriarch did help resolve conflicts among the successor team members. The family patriarch listened to his successors with regard to major decisions, and the family members responded by supporting family decisions even if they individually disagreed at first. Respondent C at Company 7 gave an example of this as follows.

My oldest brother came and told my father that this property (for restaurant number 2) was available. Then, we held a family meeting to discuss it. . . . When we bought this place, the only ones who wanted to do it were my oldest brother and myself. The others did not want to do it. If it weren’t for me and my oldest brother, we would not have this one. It was just me and him against my brother-in-law, my sister, and my brother.

The interaction among successor team members, problem solving, and decision making at Company 8 was highlighted by shared responsibility. Here the cousins of the successor team worked harmoniously. Although they could both do all the jobs necessary for their store and they did divide tasks among themselves, Respondent A at Company 8 explained,

We’re there together if we need to work on something or things happen where it’s busy and we need more people. . . . We definitely touch base every day and we work behind the scenes on blogs and e-mail blasts and ordering because things turn out better if we do them together.

Similarly at Company 10, the family was very close. “We depend on each other (father, mother, and brother), not other people. We are with each other all the time,” explained the younger brother, Respondent B at Company 10. The two brothers of the successor team worked well together and exhibited little sibling rivalry even though their parents had given ownership of the seafood restaurant to the older brother. This brother, Respondent A at Company 10, described the situation, “My parents have put everything in my name. Eventually, they will open another place and put it in my brother’s name. My parents will start retiring.” The parents had made one unsuccessful attempt to open another restaurant for the younger brother, so he seemed content to wait for his opportunity. In the meantime, the brothers share an apartment, and the younger brother stated, “My brother is my best friend. We have been very close since we were very young. Now, we have a good working relationship.” This serves as a refreshing example of brotherly love overcoming sibling rivalry as well as highlighting positive interaction and trust between the two generations at Company 10.

Working cooperatively together is a key to success for the successor teams in problem solving and making decisions. At Company 13, Respondent B replied,

As far as business decisions, we talk about it and . . . it’s not a vote, really. If it’s not unanimous, we don’t do it basically. . . . Even though two of us could outvote the other, we don’t. . . . We wouldn’t. . . . We still have to deal with each other as a family.

In the positive track, successors work together, learn cooperative decision making, and become increasingly committed to the family business. At Company 14, Respondent D stated,

Everyone was expected to do their part. And everyone wanted to do their part because we felt like we were working toward a goal together. And it brought out that we need to recognize the other personalities so that we can work together.

At many of the respondent firms, strong commitment was reported among the successors. “I believe that there is a high level of commitment to our company among the family members,” reported Respondent A at Company 13.

These observations lead us to propose the following:

Negative Successor Team Performance

Strong founders may establish a solid foundation for their company on the business side but at the same time sow the seeds for the fall of their business on the family side. In this article, we refer to this situation as the negative track. In the negative track, successors do not work together cooperatively, the successor team collapses, and the family business is closed. In this study, we found two negative track variations—one variation characterized by anger and hostility among family members leading to a blow-up of family relations and another in which interests among the successors diverged and a burnout or loss of desire to remain engaged in the family business occurred. Both of these negative track variations led to the closing of the family firm.

First, we report on Variation 1, in which we found two cases of sad misfortune, neglect, deceit, and dishonesty—human failures written on the family business stage. We discovered two highly regarded longtime family firms that provided excellent products and services for many years in their local communities that have either closed their doors today or split into smaller, weaker parts because of family issues.

In the negative track Variation 1, the family businesses were able to continue to operate as successors entered the firm. Successor groups were formed, but personalities clashed and working conditions deteriorated as individuals did not work well together. For example, at Company 5, an immigrant to America made his dreams come true by opening and successfully running a restaurant business for over 30 years. However, this gentleman passed away suddenly in 1975, leaving behind a 44-year-old widow and seven children (four sons and three daughters) with a very popular two-restaurant business. Respondent A at Company 5 recalled,

When he passed away we were amazed about the front-page story and the radio and television stories that they did about him. He helped a lot of people that we didn’t know about because he remembered what it was to be poor. . . . It was an honor to be a part of his life, I mean it was an honor to be his son.

All of the children worked in the family restaurant business “washing dishes and peeling garlic,” and three out of seven graduated from college. Their mother, who had been a stay-at-home wife, ran the operation “more as a mother than a businesswoman.” There were problems with employee theft of food from the kitchen and lack of accountability among family members, including incidents of company money used for personal home repairs and too much drinking among the sons. Although the children had operational knowledge of the restaurant, the premature death of the founder left a power vacuum because no leader or leaders of the successor group had been chosen. Respondents A and B and their two brothers did step up and manage the two locations. Respondent B at Company 5 recalled,

For many years, it was me and my youngest brother at Number 1 (the original restaurant) and then Respondent A and my oldest brother at Number 2 (the second restaurant). Sometimes my youngest brother would go back to Number 2. I had people that I thought I could depend on.

The second generation was able to manage the restaurants successfully and operate profitably for 30 years with their mother as the majority owner. By treating her children as equals, their mother maintained the family and the business keeping the conflict among her children at bay, but then she came down with dementia, leading to Alzheimer’s disease. “Momma’s sickness has gone on for 4 or 5 years at a cost of about $7,000 a month. Nobody thought about buying a long-term care policy,” explained Respondent A at Company 5.

So, while there was a group of successors, there was no designated or chosen leader or leaders. The predecessors did not assign specific roles for the successors, and the successors did not agree among themselves about those roles after their mother became disabled. This mismanagement by the first generation (both father and mother) contributed to problems in the second generation. Relationship conflict grew among the siblings, and a power struggle for control of the family firm took place. The oldest sister took matters into her own hands, by surreptitiously obtaining a power of attorney for her mother’s estate. Respondent A at Company 5 stated,

My oldest sister has split the whole family apart. I don’t talk with my sisters. . . . I don’t know if it was greed, or if this guy (brother-in-law) wanted control. To me, it was a conspiracy theory or something. The girls saw this money if you get rid of three or four of the boys. . . . Unaware to me, there was a Power of Attorney. The Power of Attorney was brought up and the sisters have control. . . . When Momma passes away, there will be World War III . . . . It is a bloodbath with family business.

The original family restaurant closed down in 2012 as problems arose with tax liability issues. One of the sisters opened another restaurant, using a variation of the original family restaurant’s name. One of the brothers opened a restaurant on his own and then closed it. Respondent A also opened his own restaurant in the same city and continues to successfully operate within a few miles of his sister’s restaurant.

Company 15 was a retail feed store, started in 1940. The founder’s son took over the business after his father’s death in 1977 and ran the business with his wife and two sons. The older son worked in the family business after school and during the summers until his graduation from college. Then, he entered the business full-time in 1981 and enjoyed a close relationship with his father. The father was the glue that held the family together in the business. Both of his sons entered into the business as an expected matter of course. With the father in charge, the brothers cooperated with each other. Then, the father passed away in 1996, and majority ownership passed to the mother. However, the embedded relationship conflict between the two brothers flared. Respondent A at Company 15 recalled as follows:

My brother never got to work early and I always did, which was fine. I like to get up early, but I also wanted to leave early. That caused a lot of conflict. He was supposed to get there at 7:00 a.m. So, I said that however late you get there in the morning, I will leave that early in the afternoon. I would work in the store by myself. I had been up since 5:00 and had been working since 5:30 or 6:00, so I was ready to go home. That caused a lot of conflict. One of my sayings is that if you can work with your family, you can work with anybody.

The younger son did not share the same work ethic or sense of responsibility to the family business. Periodically, the younger son would leave the family store and go to work for friends or relatives in other states. As the years passed, the mother became more partial to her younger son and did not want him to leave. Respondent A at Company 15 explained,

She kind of made him come back in 1995. We had a good month or so and then everything went back to the crappy way it had always been. It is hard to work with your family. . . . After we were together for a short time, we were at each other’s throat. . . . I have no relationship with my brother. It has never been wonderful. It is worse now than it probably ever was.

After 32 years working in the family store, Respondent A moved about 30 miles away to another city and opened a second feed store along with his wife in April 2003. Respondent A felt that geographic separation would ease the conflict with his sibling. He stated,

We all agreed that that was fine and we would open store number 2 over here. So, we moved over here and got settled and got our son in school. Then, my mother and brother decided that we were not going to do store number 2. They did not consult me or ask and did not really care. So, I said that I would do it by myself. I was not going back then. We had sold everything we had.

The mother and younger brother did not want the older son to use the family name for the second store and filed a lawsuit to prevent this. The older son and his wife operated the second feed store for over 10 years. “Prices of feed skyrocketed and the economy got pretty bad. We built the store over here, so we had a lot of overhead. We just kept struggling with it until we ran out of money.” The older son closed the second feed store. The mother continues to operate the original store, and the younger son has part interest in that store and another store in the area.

In both cases in the negative track Variation 1, we find factors leading to downward operating spirals and less than optimal outcomes for the family members involved. The incumbent-generation leaders failed to clearly designate a leader or leaders of the successor generation. Unresolved conflict, although kept at bay for years, surfaced and led to negative results. Relationship conflict led to dysfunctional behaviors (from theft to mismanagement to absenteeism), which were harmful to the profitability and survival of the family businesses. Ultimately, the successor groups were dissolved as individuals left or were forced to leave the family businesses. The inability to work together as a group led to the closing of the original family business in one case and the opening and subsequent closing of new family firms in other situations.

In Variation 2 of the negative track, we also found relationship conflict among family members, although the conflict was less severe and did not result in extremely dysfunctional behavior as in Variation 1. For example, Respondent A at Company 16 described the mild to moderate level of conflict among family members in their men’s clothing store as follows:

Some families get along and some don’t. There’s this conflict. Some families have hot-headed family members. Some families have just got tempers. . . . I was low-key and my dad was low-key and my cousin was medium, but his dad was the highest strung one there. We knew how to skirt around right where his hot points were and we didn’t mess with him. So you’d stay away from him but every once in a while you couldn’t help but push him. You’d take your little laugh and say, well, I’m not going to do that again. Just leave those shirts where they are if that’s the way he wants them.

Rather than extremely dysfunctional behavior, such as legal coups and moving to cut off the inheritance of other family members, we found that successor team members in Variation 2 tended to grow apart and desired to pursue different interests outside their family firm. The level of conflict slowly grew and led successor team members to become uncomfortable. At Company 16, the two cousins in the third generation operated the business successfully for several years, but changes occurred as one cousin’s sons entered the family business. Respondent A at Company 16 further explained,

So, you had three (the cousin and his two sons), more or less, plus one. Not that it was like that, but I got a little bit alienated even though my second cousins did not have any shares (of stock). My cousin was helping them and supporting them because they couldn’t do much on their own. So, there was a little frustration there on his part. And then I could feel us not quite as comfortable as before and the men’s clothing business was slowing down a little, and his sons needed a little more money.

Then, Respondent A at Company 16 found a new business opportunity. Another family member wanted to sell his school uniform business, and the respondent recognized an excellent chance to leave the men’s clothing store.

I figured my cousin would want in on the school uniform business too, but he didn’t want to because he wasn’t getting along with (the other family member). So I’d thought he’d want to be a partner, but yet when I asked him, he said no thanks.

In Variation 2 of the negative track, relationship conflict led successor team members to consider divergent interests, such as buying another local business (Company 16), leaving town to open another business (Company 17), or deciding to retire and sell the family business (Company 18). Also, sales and profits at the family firms began to dwindle. At Company 16, Respondent B explained,

It is just not worth it to work so hard and make very little money. In the early years, we made real money and then we started making half of that. We just started thinking we should try different things because we just couldn’t make money.

Although Variation 2 firm members did not experience the anger and hostility of Variation 1, their actions ultimately led to the dissolution of the successor team and then the closing of the business. Therefore, we propose the following: