In this study, owner-manager-related factors that can influence the succession process in small and medium-sized family businesses are empirically investigated. The study was conducted among 2,458 owner-managers and successors in 1,038 family businesses identified via a snowball sampling technique. A total of 332 usable questionnaires was returned. The dependent variable in this study, namely the ‘perceived success of the succession process’, is measured by two underlying dimensions, namely the ‘satisfaction with the process’ and ‘continued profitability of the business’. The empirical results indicate that the owner-manager-related factors that influence ‘satisfaction with the process’ are the ‘relationship between the owner-manager and successor’, the ‘owner-manager's trust in the successor's abilities and intentions’ and ‘family harmony’. The ‘continued profitability of the business’ is influenced by the ‘relationship between the successor and owner-manager’ and the ‘trust that the owner-manager has in his or her successor's abilities and intentions’. The willingness of the owner-manager to hand over the business is in turn influenced by the extent to which he or she has ‘interests outside of the context of the family business’ and has ‘trust in the successor's abilities and intentions’. The extent to which there is ‘harmony among the family members’ will influence the ‘relationship between the owner-manager and successor’. Based on these findings, recommendations for successful successions are offered.
AndersonR. E.GerbingD. (1988), in HairJ. F.AndersonR. E.TathamR. L.BlackW. C. (1998), Multivariate Data Analysis, 5 ed, Prentice Hall, Englewood Cliffs, NJ.
2.
AronoffC. E. (1998), ‘Megatrends in family business’, Family Business Review, Vol 11, No 3, pp 181–185.
3.
AronoffC. E.WardJ. L. (1992), ‘Family business succession: The final test of greatness’, Family Business Leadership Series, IMD Library, Lausanne.
4.
BarachJ. A.GantiskyJ. B. (1995), ‘Successful succession in family business’, Family Business Review, Vol 8, No 2, pp 131–155.
5.
BarnesL. B.HershonS. A. (1976), ‘Transferring power in the family business’, Harvard Business Review, Vol 54, No 4, pp 105–114.
6.
BirleyS. (1986), ‘Succession in the family firm: The inheritor's view’, Journal of Small Business Management, July, pp 37–43.
7.
BjuggrenP.SundL. (2000), ‘Organisation of successions of small and medium sized enterprises within the family’, Proceedings of the International Council for Small Business, 45th World Conference, 7–10 June, Brisbane, Australia (CDRom), pp 1–17.
8.
BjuggrenP.SundL. (2001), ‘Strategic decision making in intergenerational successions of small- and medium-sized family-owned businesses’, Family Business Review, Vol 14, No 1, pp 11–23.
9.
BrockhausR. H. (2004), ‘Family business succession: Suggestions for future research’, Family Business Review, Vol 17, No 2, pp 165–177.
BygraveW. D. (1997), The Portable MBA in Entrepreneurship, 2 ed, John Wiley and Sons, New York.
12.
ByrneC. S. (1998), ‘An investigation into the relationship between organizational commitment and the employees' perceptions regarding leadership practices and success’, unpublished doctoral thesis, Claremont Graduate University, California.
13.
CarlockR. S.WardJ. L. (2001), Strategic Planning for the Family Business, Palgrave Macmillan, New York.
14.
ChrismanJ. J.ChuaJ. H.SharmaP. (1998), ‘Important attributes of successors in family businesses: An exploratory study’, Family Business Review, Vol 12, No 1, pp 19–34.
15.
CiampaD.WatkinsM. (1999), ‘The successor's dilemma’, Harvard Business Review, Vol 77, No 6, pp 161–168.
16.
DancoL. (1980), quoted in HandlerW. C. (1994), ‘Succession in family businesses: A review of the research’, Family Business Review, Vol 7, No 2, pp 133–157.
17.
DancoL. A. (1982), Beyond Survival, Centre for Family Business, University Press, Cleveland, OH.
18.
DavisJ. A.TagiuriR. (1989), ‘The influence of life stage on father–son work relationships in family companies’, Family Business Review, Vol 2, No 1, pp 47–74.
19.
DessG. D.RobinsonR. B. (1984), ‘Measuring organizational performance in the absence of objective measures: The case of the privately held firm & conglomerate business unit’, Strategic Management Journal, Vol 5, pp 265–273.
20.
DickinsonT. M. (2000), ‘Critical success factors for succession planning in family businesses’, unpublished research report in partial fulfilment of a Master in Business Administration degree, Faculty of Business Administration, University of the Witwatersrand, Johannesburg.
21.
DonckelsR.LambrechtJ. (1999), ‘The re-emergence of family-based enterprises in East Central Europe: What can be learned from family business research in the Western World?’Family Business Review, Vol 12, No 2, pp 171–188.
22.
DumasC.DupuisJ. P.RicherF.St-CyrL. (1995), ‘Factors that influence the next generation's decision to take over the family farm’, Family Business Review, Vol 8, No 2, pp 99–120.
23.
FioritoS. S.LaForgeR. W. (1986), ‘A marketing strategy analysis of small retailers’, American Journal of Small Business, Vol 10, No 4, pp 7–17.
24.
FlemingP. D. (1997), ‘Case study – helping business owners prepare for the future’, Journal of Accountancy, May, pp 46–47.
25.
FoxM.NilakantV.HamiltonR. T. (1996), ‘Managing succession in family-owned businesses’, International Small Business Journal, Vol 15, No 1, pp 15–25.
26.
GaravanT. N.CinnéideB. ÓFlemingP. (1997), Entrepreneurship and Business Start-ups in Ireland – An Overview, Oak Tree Press, Dublin.
27.
GersickK. E.DavisJ. A.HamptonM. M. McCollomLansbergI. (1997), Generation to Generation – Life Cycles of the Family Business, Harvard Business School Press, Boston, MA.
28.
GoldbergS. D. (1996), ‘Research note: Effective successors in family-owned businesses: Significant elements’, Family Business Review, Vol 9, No 2, pp 185–197.
29.
GoldbergS. D.WooldridgeB. (1993), ‘Self-confidence and managerial autonomy: Successor characteristics critical to succession in family firms’, Family Business Review, Vol 6, No 1, pp 55–73.
30.
HairJ. F.AndersonR. E.TathamR. L.BlackW. C. (1995), Multivariate Data Analysis: With Readings, 4 ed, Prentice Hall, Englewood Cliffs, NJ.
31.
HairJ. F.AndersonR. E.TathamR. L.BlackW. C. (1998), Multivariate Data Analysis, 5 ed, Prentice Hall, Englewood Cliffs, NJ.
32.
HandlerW. C. (1989), ‘Managing the family firm succession process: The next-generation family member's experience’, unpublished doctoral thesis, University of Boston, Boston, MA.
33.
HandlerW. C. (1994), ‘Succession in family businesses: A review of the research’, Family Business Review, Vol 7, No 2, pp 133–157.
34.
HandlerW. C.KramK. E. (1988), ‘Succession in family firms: The problem of resistance’, Family Business Review, Vol 1, No 4, pp 361–381.
35.
HartlineM. D.FerrellO. C. (1993), Service Quality Implementation: The Effects of Organizational Socialization and Managerial Actions on Customer-Contact Employee Behaviours, Technical Working Paper, Report Number 93–122, December, Marketing Science Institute, Cambridge, MA.
36.
HarvestonP. D.DavisP. S.LydenJ. A. (1997), ‘Succession planning in family business: The impact of owner gender’, Family Business Review, Vol 10, No 4, pp 373–396.
37.
HarveyM.EvansR. E. (1995), ‘Life after succession in the family business: Is it really the end of problems?’Family Business Review, Vol 8, No 1, pp 3–16.
38.
HumeS. A. (1999), ‘An assessment of the risk of family business failure’, unpublished doctoral thesis, Antioch University, New Hampshire.
39.
IFERA (2003), ‘Family business dominate’, Family Business Review, Vol 16, No 4, pp 235–240.
40.
JöreskogK.SörbomD. (2003), LISREL 8.54 for Windows (computer software), Scientific Software International Inc, Lincoln, IL.
41.
LansbergI. S. (1988), ‘The succession conspiracy’, Family Business Review, Vol 1, No 2, pp 119–143.
42.
LansbergI. (1999), Succeeding Generations: Realising the Dreams of Families in Business, Harvard Business School Press, Boston, MA.
43.
LansbergI.AstrachanJ. H. (1994), ‘Influence of family relationships on succession planning and training: The importance of mediating factors’, Family Business Review, Vol 7, No 1, pp 39–59.
44.
LaubscherI. (1993), ‘An explorative investigation into the nature and scope of the relationship between the founder and successor in a family business with regard to succession’, unpublished Master's research report, Graduate School of Business, University of Stellenbosch, Stellenbosch.
45.
LeaJ. W. (1991), Keeping it in the Family – Successful Succession of the Family Business, Wiley and Sons, New York.
46.
LevinsonH. (1971), ‘Conflicts that plague family businesses’, in AronoffC. E.WardJ. L., eds (1991), Family Business Sourcebook, Omnigraphics Incorporated, Detroit, MI, pp 442–453.
47.
MaasG. (1999), ‘Family businesses in South Africa: A development model’, paper presented at the Saesba Conference, 30 July–1 August, Johannesburg, pp 1–15.
48.
MagrettaJ. (1998), ‘Governing the family-owned enterprise: An interview with Finland's Krister Ahlström’, Harvard Business Review, January/February, pp 113–123.
49.
MaloneS. C. (1989), ‘Selected correlates of business continuity planning in the family business’, Family Business Review, Vol 2, No 4, pp 341–353.
50.
MatthewsC. H.MooreT. W.FialkoA. S. (1999), ‘Succession in the family firm: A cognitive categorization perspective’, Family Business Review, Vol 12, No 2, pp 159–169.
51.
MorrisM. H.WilliamsR. W.AllenJ. A.AvilaR. A. (1997), ‘Correlates of success in family business transitions’, Journal of Business Venturing, Vol 12, pp 385–401.
52.
NeubauerF.LankA. G. (1998), The Family Business – Its Governance for Sustainability, Routledge, New York.
53.
PelhamA. M.WilsonD. T. (1996), ‘A longitudinal study of the impact of market structure, firm structure strategy and market orientation culture on dimensions of small-firm performance’, Journal of the Academy of Marketing Science, Vol 24, No 1, pp 27–43.
54.
PerriconeP. J.EarleJ. R.TaplinI. M. (2001), ‘Patterns of succession and continuity in family-owned businesses: Study of an ethnic community’, Family Business Review, Vol 14, No 2, pp 105–121.
55.
RyanC. (1995), ‘Are family businesses better?’Productivity South Africa, March/April, pp 11–13.
56.
SantiagoA. L. (2000), ‘Succession experiences in Philippine family businesses’, Family Business Review, Vol 13, No 1, pp 15–40.
57.
ScheinE. H. (1983), ‘The role of the founder in creating organizational culture’, Organisational Dynamics, Vol 5, No 1, pp 13–28.
58.
SeymourK. C. (1993), ‘Intergenerational relationships in the family firm: The effect on leadership succession’, Family Business Review, Vol 6, No 3, pp 263–281.
59.
SharmaP. (1997), ‘Determinants of the satisfaction of the primary stakeholders with the succession process in family firms’, unpublished doctoral thesis, University of Calgary, Canada.
60.
SharmaP. (2004), ‘An overview of family business studies: Current status and directions for the future’, Family Business Review, Vol 17, No 1, pp 1–36.
61.
SharmaP.ChuaJ. H.ChrismanJ. J. (2000), ‘Perceptions about the extent of succession planning in Canadian family firms’, Canadian Journal of Administrative Sciences, Vol 17, No 3, pp 233–244.
62.
SteigerJ. H.LindJ. C. (1980), ‘Statistically based tests for the number of common factors’, paper presented at the Annual Meeting of the Psychometric Society, Iowa City, IA.
63.
StemplerG. L. (1988), ‘A study of succession in family owned businesses’, unpublished doctoral thesis, The George Washington University, Washington, DC.
64.
SwoggerG. (1991), ‘Assessing the successor generation in family businesses’, Family Business Review, Vol 4, No 4, pp 397–411.
65.
TanW.FockS. (2001), ‘Coping with growth transitions: The case of Chinese family businesses in Singapore’, Family Business Review, Vol 14, No 2, pp 123–139.
66.
VenkatramanN.Ramanujam (1987), ‘Measurement of business economic performance: An examination of method convergence’, Journal of Management, Vol 13, No 1.
67.
WardJ. L. (1984), ‘Perpetuating the family business’, in AronoffC. E.WardJ. L., eds (1991), Family Business Sourcebook, Omnigraphics Incorporated, Detroit, MI, pp 77–79.
68.
WardJ. L. (2004), Perpetuating the Family Business, Palgrave Macmillan, New York.
69.
ZaleznikA.de VriesM. F. R. Kets (1985), quoted in HandlerW. C. (1994), ‘Succession in family businesses: A review of the research’, Family Business Review, Vol 7, No 2, pp 133–157.
