Literature generally cites the low survival rate which family businesses face. Only 30 % of the companies further survive into the second generation, even only 15 % to 16 % into the third generation.
Although many researchers see the most potential reason for this within the lack of adequate planning when company-owner hand over their businesses to offsprings or external managers , there exist various further reasons. In general, academics offer within their works a wide range of reasons, internal as well as external caused factors, which strongly influence the success of the succession within family businesses. Further, they developed several models and academic approaches to build up the process of succession and the mentioned different influences within holistic approaches of succession in family businesses to enable companies a successful handing over.
Still, the situation in practice has not changed significantly since the current survival rate is steadily on a further low level. This could consequently reveal the hint of too little interaction between theory and practice respectively between academics and practitioners. Other branches showed the potential and the possible win-situations for both sides.
Therefore, the research objective of this paper is to work out, to what extent a unique theoretical model is able to build up all relevant factors influencing the succession as an integrated process in theory to project this onto family businesses in practice and to provide solutions for succession within these companies.
Table of Contents
1 Introduction
1.1 Research Objective
1.2 Procedure of Analysis
2 A Definition of Successful Succession
3 Influences Taking Place in the Succession Process
3.1 The Personal Influences
3.1.1 Successor Related Factors
3.1.2 Family Related Factors
3.2 The External Influences
3.2.1 Connection in the Process
3.2.2 Regional Related Influences
3.2.3 Unexpected Influences
4 The Importance of Several Influences
5 Conclusion
Research Objectives and Core Themes
The primary objective of this paper is to investigate whether a unique theoretical model can effectively integrate all relevant factors influencing family business succession and project these findings onto practical applications to provide actionable solutions for companies.
- Theoretical definitions of successful succession in family-owned businesses.
- Personal influences including successor-related factors and family-related dynamics.
- External variables such as regional differences, industry context, and unexpected events.
- The role of strategic planning and the prioritization of business versus family goals.
- The impact of cultural heritage, historic factors, and social norms on the succession process.
Excerpt from the Book
3.1.1 Successor Related Factors
In theory, published articles and books on succession in family businesses worked out the special importance of the successor’s role within the process of handing over a business. Motivation, given skills and education, personality and self-confidence, inside as well as outside work experience are named to be highly correlated to a successful succession process. Within this chapter, several influences clusterered in skills and education, personality and commitment as well as age and gender are discussed.
To be able to lead and guide a business, a sucessor has to possess a certain education and skills enabling him managing the company successfully. These are on the one hand theoretical skills, incorporating skills in financials, marketing, sales or strategic planning, but as well technical and interpersonal abilities. To strengthen this knowledge and to have first experiences in practice, on the other hand, a potential successor should be required to gain wide practical experiences. Being early involved within the own family business, the follower is able to profit from the inside point of view. To further benefit, the potential successor should secondly focus as well on gaining experience outside the family. In this case, the exchange of experiences, information and skills is to be stressed, since in most cases, this interchange results in a win-win situation for all participants.
Summary of Chapters
1 Introduction: This chapter highlights the low survival rates of family businesses and defines the objective of developing an integrated theoretical model for successful succession.
2 A Definition of Successful Succession: This section explores various definitions and indicators of success, emphasizing the satisfaction of stakeholders and the long-term viability of the firm.
3 Influences Taking Place in the Succession Process: This core chapter categorizes the complex array of internal personal factors and external environmental factors that impact the succession outcome.
4 The Importance of Several Influences: This chapter evaluates the significance of identified factors and suggests that planning, grounded in a shared vision, is essential for navigating the transition.
5 Conclusion: The author concludes that while theoretical models offer insights, a single universal standard for success is unattainable due to the unique cultural and familial circumstances of every business.
Keywords
Family Business, Succession, Successor, Management, Leadership, Strategic Planning, Personal Influences, External Influences, Cultural Heritage, Governance, Intergenerational Conflict, Business Viability, Stakeholder Satisfaction, Theoretical Model
Frequently Asked Questions
What is the primary focus of this research paper?
The paper examines the complex factors that influence the succession process in family-owned businesses, aiming to bridge the gap between academic theory and practical application.
Which two categories of influences are analyzed?
The influences are divided into personal factors, such as successor skills and family dynamics, and external factors, including regional, industrial, and unexpected variables.
What is the central research question?
The paper asks to what extent a unique theoretical model can integrate these varied influences to guide family businesses through a successful succession.
What methodology does the paper employ?
The author performs a systematic review and analysis of existing literature to identify and cluster key influences on the succession process.
What does the main body of the work cover?
It covers personal factors like successor motivation and family relations, as well as external factors like time, geography, culture, and unexpected accidents.
What are the key themes defining the work?
The work focuses on the importance of planning, the role of leadership, family harmony, and the necessity of adapting to specific cultural and industry contexts.
Does the paper propose a single solution for all companies?
No, the author explicitly concludes that a standard model is impossible because every family business operates under unique values, structures, and environments.
How is success defined in the context of family businesses?
Success is generally viewed as a combination of positive firm performance, business viability, and the satisfaction of the family and other stakeholders.
- Quote paper
- Niklas Kürten (Author), 2006, Application of a unique model to build up succession of family business in practice, Munich, GRIN Verlag, https://www.grin.com/document/79060
