Succession in family business: a multi-source perspective
2017-02-23T00:04:01Z (GMT) by
The purpose of this study was to examine generational succession in family business as it relates to four key protagonists: the incumbent, the successor, the family, and non-family influence. Santora and colleagues (2001, 2007, 2011) assert that succession planning in not for profits is growing in importance, but that much more work needs to be done in this area. Accordingly, this study was undertaken in order to address some of these gaps in the research as it applies to family business. Additionally, the research framework for the study was stewardship theory, which states that “[this] theory appears to be a suitable perspective in viewing the family as a resource because it depicts organizational members as collectivists, pro-organizational and trustworthy . . . when family members are stewards of their organizations, they are motivated to fulfill organizational goals and to maximize firm performance. Family firms are often depicted as relying on mutual trust, intra-familial concern, devotion to others and clan-based collegiality” (Eddleston and Kellermanns, 2007:549). The key variables under examination in this study were categorized into professional and personal domains, based on the approach proposed by Solomon, Breunlin, Panattoni, Gustafson, Ransburg, Ryan, and Terrien (2011). The research design and methodology was qualitative and used structured interview data collection techniques for the family business sample, and the Prospective Case Study (PCS) design of Bitektine (2007) for the student data collection phase. The study was conducted in six distinct phases: (1) analysis of current literature on family business; (2) the development of research questions; (3) preliminary pilot study confirming the assumptions and definitions of the previous phase; (4) a series of one-on-one interviews with family business owners; (5) 41 PCS Interviews substantiating the findings on phase four; (6) data analysis and write up. The sample selection criteria consisted of family businesses that had been in operation for a minimum of 25 years, and had or were about to experience generational succession, were owned by one family, employed non-family employees, and were still in operation. As a result, the one-on-one interview sample (Protagonist Interviews) consisted of 16 subjects made up of six incumbents, three successors, four non-family employees, and three independent advisors, all based in Melbourne. The follow-up PCS Interviews numbered 41 family businesses, and were subject to the same interview protocols used for the protagonist interviews. These PCS Interviews were carried out under strict researcher supervision by 41 undergraduate family business students enrolled in a family business unit in a major city-based research university, all of whom either worked in a family business or were family members of that business. In many cases, the students were themselves successors in their family businesses. The choice of the students was consistent with Campbell’s (1975:182) observation that “amateur” scientists are relevant and appropriate as professional social scientists in the collection of data with which they are familiar. The research highlighted both similarities and differences in personal and professional variables and their associated components for each of the four protagonists. The findings highlight the value of the family’s culture on the business, the effectiveness of structured protocols in decision-making processes, the capacity of nepotism to compromise transparent family business processes, the management of extended family members by family business leaders, and the importance placed on family cohesion during succession. The information from this study adds to the current literature and highlights the nature of the relationships in family businesses. The study also explores other perspectives on stewardship theory by balancing the interests both of the family and non-family stakeholders. The research also provides information for family business practitioners and independent advisors in the management of generational succession, thus potentially reducing the attrition rate of these valuable economic and social units. References Bitektine, A. (2007). Prospective case study design: qualitative method for deductive theory testing. Organizational Research Methods, 11(1), 160-180. Campbell, D. T. (1975). “Degrees of Freedom” and the case study. Comparative Political Studies, 8 (2), 178-193. Eddleston, K. A., & Kellermanns, F. W. (2007). Destructive and productive family relationships: a stewardship theory perspective. Journal of Business Venturing, 22 (4), 545-565. Santora, J., Caro, M., & Sarros, J. (2007). Succession in nonprofit organizations: an insider/outsider perspective. Advanced Management Journal, 72(4), 26. Santora, J. C., & Sarros, J. C. (2001). CEO succession in nonprofit community-based organizations: is there room for insiders at the top? Career Development International, 6(2), 107-111. Santora, J. C., Sarros, J. C., & Cooper, B. K. (2011). Australian and US perspectives of nonprofit executive succession planning. The Business Review, Cambridge, 18(2), 16-22. Solomon, A., Breunlin, D., Panattoni, K., Gustafson, M., Ransburg, D., Ryan, C., & Terrien, J. (2011). “Don't lock me out”: life-story interviews of family business owners facing succession. Family Process, 50(2), 149-166.