Top PDF Using the family business succession, resourcebased

Using the family business succession, resourcebased

Using the family business succession, resourcebased

Closely related to the concept of family business culture is the term familiness. Familiness may be defined as interac- tions between family members, the family unit itself, individ- uals, and the business that lead to positive synergies; this cre- ates competitive advantages for the firm (Habbershon, Williams, and MacMillan 2003). Chrisman, Chua, and Sharma (2005) took the definition one step further by suggesting that families form firms to do just this—to institutionalize their unique resources and capabilities for financial, and in some cases, nonfinancial motives in a strategic management theory framework. The social element of the family is of major importance in understanding why family firms organ- ize and persist over time, from one generation to the next. Nordqvist (2005) looked at the behavioral effects of top man- agement teams from a familiness perspective and cited this as a unique advantage.The topic of familiness was important enough for Entrepreneurship Theory & Practice to devote an entire issue to the topic in May 2005. In the opening arti- cle of the special issue, Chrisman, Chua, and Steier (2005) call for more research to further define familiness by understand- ing the conditions that lead to this phenomenon, the forma- tion of family firms, and why they are successful.This article is an attempt to answer this call, in part, to the black box question of success and succession.
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Succession in Horticultural Family Businesses

Succession in Horticultural Family Businesses

Based on a literature review, Massis, Chua and Chrisman (2008) developed a model of factors impeding a  previously  intended  intra‐family  succession.  They  presented  three  direct  causes:  (i)  all  potential  family  successors  declined  leadership  of  the  business;  (ii)  the  dominant  coalition  rejected  all  potential  family  successors;  and  (iii)  the  dominant  coalition  decided  against  family  succession  although  acceptable  and  willing potential family successors were available. In addition, they identified five categories of preceding  factors:  (i)  individual  factors;  (ii)  relationship  factors;  (iii)  context  factors;  (iv)  financial  factors;  and  (v)  process  factors.  Based  on  an  analyses  of  thirteen  prior  empirical  studies,  Spelsberg  (2011,  p. 229)  presented  six  essential  factors  for  the  success  of  succession:  (i)  motivation  of  the  predecessors  to  hand  over;  (ii)  motivation  of  the  successors  to  take  over;  (iii)  competence  of  the  successors;  (iv)  harmonious  interaction  within  the  family;  (v)  sound  economic  condition  of  the  family  business;  and  (vi)  employees’  respect for the successors. Groth and Rüsen (2016) divide the succession process into nine phases, which,  in  their  opinion,  every  entrepreneurial  family  has  to  go  through.  Systematically  working  off  the  specific  matter  of  each  phase,  with  the  involvement  of  all  parties  to  the  process,  conflicts  are  avoided.  They  consider constant communication throughout as crucial for its success and created the “Wittener Modell”  to describe the different phases in the course of business succession  
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Strategy for succession in family owned small businesses as a wicked problem to be tamed

Strategy for succession in family owned small businesses as a wicked problem to be tamed

ways likely to be some deliberate aspect to emergent and adaptive strategy and vice versa. At the heart of a strategic approach to succession in a small family busi- ness lies the involvement of family members and other stakeholders in decision making processes and the ef- fective communication of the process and outcomes to all involved in the future of the business. A process of individual and collective learning appears to be a key aspect of solving wicked problems with much of that learning (at least in the initial stages) focused on what the actual problem is (Roberts, 2000). Communication and involvement of family and wider business stake- holders can help inform and better understand the com- plexity of the problem and ways in which it might be addressed although there may be a tendency for power and decision making to be concentrated amongst a se- lect few in many small family businesses and the extent of an inclusive approach will be contingent upon spe- cific circumstances. Camillus (2008) cautions against such groupthink in the taming of wicked problems and recommends the involvement of a wide range of stake- holders as one way in which this can be minimised. In the family business context this may include non-family members and trusted external advisors such as account- ants or solicitors. Assumptions need to be questioned and future scenarios should inform the directions that small family businesses take in developing strategies for succession. To maintain and create a sense of fam- ily business identity it is important to hold on to and not lose sight of its purpose. Strategies for succession in small family businesses that seek to address wicked problems may of necessity entail some trial and error and a degree of experimentation as to what might work. As wicked problems change according to the solutions put forward to address them, their shape and form of the problem is never a constant. We argue that thinking about the problem of succession planning in this way leads to an alternative approach to strategy, founded on social planning processes to engage multiple stakehold- ers, understand hidden assumptions, to create a shared understanding of the problem and to foster a joint com- mitment to possible ways of resolving it.
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To succeed or not to succeed: A multiple perspectives literature review of research in family business succession

To succeed or not to succeed: A multiple perspectives literature review of research in family business succession

A more underdeveloped perspective in succession is that of the family, which is evident in Table 1, where key sources in this research stream are relatively sparse compared to that of the individual and organisation. However, using the perspective of the family can uncover complex issues and resistance to succession planning, which make FOB successions particularly difficult compared to that of executive successions. According to Barnes & Hershon (1976) family transitions and business transitions usually occur together, therefore succession planning does not typically happen until the founder and spouse has reached the last stage in the life cycle when they are around sixty years old. Lansberg (1988) suggests that succession planning is particularly difficult at this stage for couples as the change of status, fear of retirement, and loss of independence force them to deny the need to deal with or openly discuss succession issues. His study found that the spouse had a significant influence on how the family dealt with succession, as they too may also suffer from the inability to let the business go because it has also become a major component of their identity too. Spouses could influence the family to not openly discuss succession planning to avoid disrupting family life by emotionally shielding the family from potentially upsetting issues such as preferential treatment of children, and they also resisted external consultant help as this could “violate the privacy of the family and expose the family’s dirty laundry to public view.” (Lansberg, 1988: 128).
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The Impact Of Performance Family Business Implement Succession Planning: Study In SMEs Melaka, Malaysia

The Impact Of Performance Family Business Implement Succession Planning: Study In SMEs Melaka, Malaysia

Other than that, the developing of family firm in Malaysia creates the performance of sales and profit. From of this perspective, PwC Malaysia (2015) implements ‘Global Family Business Survey 2014 Focus on Malaysia’ that approve the percentages of growth in sales on 2013 are 64 %. Hence, 66% and 16% steady percentages of aims to growth over next five years and aim to grow quickly and aggressively in next five years respectively (PwC, 2015). End up, the good performance will gain good management in family business and run smoothly with a good succession planning.
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Factors affecting succession planning in Small and Medium Enterprises (SMEs) in Zimbabwe: a case study of Harare

Factors affecting succession planning in Small and Medium Enterprises (SMEs) in Zimbabwe: a case study of Harare

Most businesses in Zimbabwe are started as family businesses and thrive under the guidance of the founding member (Nyamwanza et al, 2018). Approximately 80% of the businesses in Zimbabwe are classified as family business and are mainly small to medium sized (Sikomwe et al, 2012). Succession planning appears to be left to chance by many family owned firms (Rue & Ibrahim, 1996; Leon-Guerrero et al, 1998; Mandl, 2004) due to the emotions generated by the process as incumbents face their mortality and other family members confront the inevitable need for change (Beckhard & Dyer, 1983; Dyer, 1986; Lansberg, 1988; Le Breton-Miller et al, 2004; Sten, 2004). By their very nature, most SMEs are family businesses (Esuha & Fletcher, 2000). Succession is a challenge to family businesses particulary the trans-generational handover (Royer et al, 2008). In a typical small or medium sized family – owned firm, there is unlikely to be any consensus on when succession is going to take place (Motwani et al, 2006). The planning of succession is a very complicated matter and often makes the founder or the predecessor reluctant to do so. This reluctance can be a result of worries that the firm will default, reluctance to handover control on company, fear of losing self-identify, or even jealousy or rivalry towards their successor (Utami, 2017). Only three studies have looked at succession planning in Zimbabwe, for example, Sikomwe et al (2012), Nyamwanza et al (2018) and Dumbu (2018). However, these studies have not addressed the issue of succession planning in the context of SMEs and yet SMEs in Zimbabwe, as noted by Sikomwe et al (2012); play a pivotal role in the economic and social spheres. This study seeks to uncover those factors which affect succession planning in SMEs in Zimbabwe. The paper will go a long way in assisting and encouraging, especially Zimbabwean SMEs owners on the need to have a well organized succession plan, otherwise business continuity after death or retirement of founder or owner may become a perennial problem in SMEs in Zimbabwe.
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The family business succession paradox : maintaining family control through empowerment and inclusion of external actors

The family business succession paradox : maintaining family control through empowerment and inclusion of external actors

Based on the analysis of the interview questions, mentoring is deemed a useful and often used tool to cope with the succession process in German family businesses. The differences are not only found in the degree and form of how mentoring is used, but strongly vary on who is being mentored and who is not. This varies from using mentoring explicitly only in a family context, to using it to develop employees outside of the family. The two largest companies, measured by the number of employees, in the sample both explicitly expressed that both formal and informal mentoring were being used in their companies. This strengthens the argument that Inzer and Crawford (2005) made, that the usage of both the formal and informal mentoring helps achieve the best results. Interestingly, contrary to the smaller companies, mentoring was explicitly stated to be used also on members outside of the family. Both of these companies further distinguished themselves through the presence of extensively planned leadership and personnel development systems. These are characterized by actively observing, screening and then targeting high potential individuals that are then placed into mentoring relationships. The fact that this assignment happens purposefully by a third party, that is neither mentor, nor protégé makes the fall under formal mentoring, as Murray (2001) introduced. These individuals are then further educated and developed through the use of other leadership development tools. For both of these companies, the concept of what exactly mentoring is defined as did not have to be explained. Both had knowledge of the tool and were aware of the difference between formal and informal mentoring. Additionally, it was emphasized that management itself was also responsible for identifying promising individuals and then creating a mentoring relationship. The other
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Governance Mechanisms and Processes of Succession: a study on the influence of the elements of corporate governance in the direction of the succession process in a family business

Governance Mechanisms and Processes of Succession: a study on the influence of the elements of corporate governance in the direction of the succession process in a family business

Assim, acredita-se que este estudo possa ter oferecido duas contribuições: 1 a verificação da influência positiva dos mecanismos de governança sobre a condução do processo de sucessão em[r]

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The influence of the banking crisis on the lending behaviour of banks towards family business succession

The influence of the banking crisis on the lending behaviour of banks towards family business succession

According to Mr. X there is a difference in financing between family and non-family firms because family firms can use the company succession facility and by that, keep the bank out of the firm, and non-family firms cannot. In case of non-family take-overs there is, in most cases, a need for external financing by for example a bank loan. An important factor in these cases is what the wishes are of the previous owner. Does he/she have the desire to reinvest in the company or not? Mr. X mentions a fellow company in which the former owner has a subordinated loan in the company which he sold to a third party outside the family. The rest of the financing demand was covered by the bank. The bank has sought to terminate the loan after six years unless the former owner would invest in the company again. A supervisory board was placed inside the company and the rent of the building towards the former owner had to be reduced. The negative spill in these acquisitions is often the bank. If you can keep them outside the business you can stay flexible and make your own decisions.
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Succession Planning Management (SPM): A Case Study of Vietnamese Family Owned Business in Australia

Succession Planning Management (SPM): A Case Study of Vietnamese Family Owned Business in Australia

The emerging contextual SPM factors in Case D highlighted that the founder YC started her business in Australia to provide an income for her young children and to enable integration into the culture of a new country. This process assisted in the recovery of the lifestyle that she lost when fleeing Vietnam. The founder worked extremely hard to support her three young daughters and the difficulty of running the business, day-to-day living and being a widow compounded parenting. The successor (youngest daughter) HP and one of her other sisters assisted their mother where they could. Both had their own career paths until the successor decided to leave her corporate career and take over the business from her mother. The decision by the successor, to change careers, is consistent with other successors who have worked in different business environments prior to returning to the family business. They returned with improved business and management processes that have enabled the family business to grow and provide a sound commercial business structure. This knowledge may be crucial when the family business is operating in more than one domain, for example franchised or multiple business sites. Both the founder and successor have strong views of maintaining family ownership of the business. Of cultural importance for both, was that the family business provides financial security for future generations, respect and recognition from both the Vietnamese and Australian communities as well as the opportunity to be self-employed. The point of financial security for generations was highlighted in the grooming of the successor’s son to eventually succeed her as the owner manager of the businesses that his grandmother started. The emerging relational SPM factors in Case D highlighted that the family has a strong view on relationships within the family, staff, external suppliers and for the wider community with the successor stating,
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To be or not to be : how family firms manage family and commercial logics in succession

To be or not to be : how family firms manage family and commercial logics in succession

Finally, our study suggests that family firms pursuing a “detached approach” fail to agree on how to make important decisions, thus threatening firm continuity. It is in this group of family firms that we observed the emergence of potentially unresolvable tensions between family and business logics across generations. Filtering mechanisms are used to keep the next generation’s family logic out of the family firm, even though succession by the next generation is desired by the incumbent owner-manager’s generation. The division and separation of the family across generations (i.e., the family culture was disjointed across generations) impedes communication (Sharma, Chrisman, & Chua, 2003), making it virtually impossible for family succession to occur. The intergenerational differences also strengthen the incumbent’s reluctance to let go of the leadership position (Bennedsen, Meisner Nielsen, Pérez-González, & Wolfenzon, 2007) and his/her perceptions of being indispensable to the firm (De Massis et al., 2008). In all of these cases, the leadership style was authoritarian. The detached approach supports organizational paralysis, which results from the inability to agree on an approach to competing logics across generations, and can reduce the legitimacy of an organization and its access to resources, thereby threatening firm continuity (e.g., Raaijmakers et al., 2014).
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Succession of Family Firms and Accounting Conservatism

Succession of Family Firms and Accounting Conservatism

From a practical point of view, at present, Chinese family firms have ushered in the peak period of the intergenerational succession. The next 10 to 20 years is key era for the entrepreneurs to pass on the controlling rights to the next gener- ation. In fact, there are not many firms that can continue to be successful in business management, the situation of family firms’ succession is not optimistic. How to successfully complete the intergenerational succession and realize the continuous operation of family business is an urgent problem to be solved. This paper discusses the changes in the quality of accounting information before and after the succession of family business power, and successors’ response to the sharp decline in corporate value, which has important practical significance for predicting the governance direction and future development prospects of family enterprises under the leadership of new generation.
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The Influence of Intergenerational Succession of Family Business on Its Performance—Taking Enterprise Innovation as a Mediating Variable

The Influence of Intergenerational Succession of Family Business on Its Performance—Taking Enterprise Innovation as a Mediating Variable

As two generations that grow up in different environments, there have differ- ences between them in world outlook, values, and various preferences and beha- viors, and the differences will affect their daily operation, strategic development decisions and so on. In 2013, Guo Chao pointed out that differences of founders and successors of family businesses in values would have an influence on various innovations and transformations of enterprises. In the process of intergenera- tional succession, to protect social emotional wealth of families, maintain con- trol power over enterprises and safeguard family ties, the first generation could control financial interests by reducing research and development expenditures so as to make the second generation improve their performance as soon as poss- ible and direct inside and outside stakeholders to pay attention to short-term profits and neglect long-term benefits. In addition, the desire for a rapid victory of the second generation due to their legitimacy disadvantages make their stra- tegic decisions tend to promote projects with low risks, short time limit and rapid paybacks and invest less resources to innovation activities with high risks, relative long time limit and slow paybacks [14]. Furthermore, social capitals of the second generation are generally inferior to that of the first generation while social capitals of entrepreneurs have a significant influence on enterprises to ob- tain new development tendency, technical information and financial support. The shortage of the second generation in social capitals will also give rise to in- sufficient innovation investment. In the turbulent stage of intergenerational succession, family businesses would often show their tendency to risk aversion and reduce their capital input in research development [15]. In 2015, the study by Jana Hauck and Reinhard Prugl discovered that succession of internal lea- dership recognized by family businesses had a negative influence on innovation investment of enterprises [16]. Based on this, the essay put forward the following assumption:
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Support for Business Succession in the European Union

Support for Business Succession in the European Union

In 2002 it was estimated that during the following 10 years, as many as 1/3 of enterprises from 15 countries of the then European Union made transfer of ownership, however, this indicator ranged from 25 to 40% in individual member states. In absolute numbers this indicator amounted to about 610 thousand small and medium-sized enterprises, out of which nearly a half employs workers (about 2.1 million workplaces) (the European Commission, 2002, p.7). At the beginning of 2006, it was estimated for the EU countries that “even 690 thousand enterprises a year should find new owners – these enterprises, although small and medium-sized in majority, give 2.8 million workplaces in total” (the European Commission, 2006b, p.5). The quoted data show unequivocally that the question of continuity of enterprises, especially family ones, is one of the key problems which will make competitiveness of economy and the dynamics of workplace forming impaired if not solved. The enterprise ownership transfer is a chance for „survival” for many, mainly family firms.
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CEO Succession: Choosing Between Family Member or Outsider?

CEO Succession: Choosing Between Family Member or Outsider?

Proponents of internal successions (family CEOs) stress that the family CEOs have greater knowledge of the firm, and their established social networks (Chung, Lubatkin, Rogers & Owers, 1987). Internal candidates provide a smooth transition and stability because they are well acquainted and have anticipated in developing the existing corporate strategy (Carlson, 1961). Internal successions also promote loyalty and reputation, thus, the family CEO has a strong incentive to ensure a firm’s profitability (Davis, Schoorman & Donaldson, 1997). Experts claim that family-owned and managed firms achieve higher performance than professionally managed (Monsen et al., 1968; Daily & Dollinger, 1992, Ang et al., 2000). Family members often hold key positions in family companies. Owner-managed companies achieve 75% higher profit (ROE) than outside-CEO that managed the companies (Monsen et al., 1968). A study in the US by Anderson and Reeb (2003) evidenced that family companies have higher Tobin’s Q and ROA when family members serve as the CEO than outside CEOs. Villalonga and Amit (2006) conducted a study on the performance of family companies and non-family companies in the US. The findings show that family ownership only creates value when the founder serves as the CEO or as Chairman with a hired CEO. Experts found that family companies that intend to keep the business for future generations perform better than non-family companies. The study found that the family CEO plays an important role in governing family companies, and family members serve as managers (Miller & Breton-Miller, 2006). Based on accounting performance measures, Anderson and Reeb (2003) results indicate that family companies perform better when the founder is the CEO, but not under the descendant’s management. Daily and Dollinger (1992) reveal that outside-CEO managed companies are larger, older and follow more aggressive strategies. In contrast, family-owned companies are smaller and use less aggressive strategies, but achieve higher performance than outside-CEO who managed the companies.
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Succession Planning Towards Business Sustainability Based On Knowledge Management

Succession Planning Towards Business Sustainability Based On Knowledge Management

Knowledge management is divided into two which are explicit knowledge and tacit knowledge. So the objective of the study is to identify the effective ways of transferring tacit knowledge to the next generation family members. Moreover, the study also investigated the relationship between tacit knowledge and business sustainability. To be sustained in the business, the study also identified barriers occur in the process of transferring the knowledge in succession planning.

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Family Planning - Review

Family Planning - Review

<Company> specializes in helping families navigate generational wealth management. We focus on asset protection, business succession planning, and tax efficiency to keep families intact and prosperous. Our mission is to help families minimize conflict between heirs, foster family unity, and ensure values are passed down from parents to future generations.

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Impact of Successor’s Personality Traits on Small & Medium Enterprise (SME) Family Business Succession

Impact of Successor’s Personality Traits on Small & Medium Enterprise (SME) Family Business Succession

It has been defined by (Ibrahim, Dumas, & McGuire, 2015) defines the family business in a way that family business is owned by the members of the family and they follow the same thought policies and strategy as learned by family and transferred to them. Most crucial issue in the family firms is succession. A proper succession process presents family businesses an opportunity to choose the competent and effective leaders that can revitalize their businesses. (Setiono, 2016) claims that inability to efficiently direct and arrange the transfer of business to the other generation in a proper channel are the main descriptions for the extreme collapsing frequency in first and 2nd generation of family-owned businesses. There are so many studies that explain the succession planning as important process planning. It is a fact that family businesses have lower survival rate, 1/3 businesses continue to exist for the 2 nd generation & only 15% gets life for the 3 rd generation.
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The weakness of strong ties : sampling bias, social ties, and nepotism in family business succession

The weakness of strong ties : sampling bias, social ties, and nepotism in family business succession

In order to better understand how leaders make sense of the complex information they are faced with, a model was developed that illustrates the mental framework that helps leaders analyze the situation in terms of causes, goals, and relevant case-based knowledge (Mumford et al., 2007). In their model, Mumford and colleagues discuss five critical conditions related to leader cognition: (a) choice optimization, (b) complexity and ambiguity, (c) novelty, (d) resource accessibility, and (e) lack of social/structural support. Essentially, they argue that cognition is related to leader performance under these conditions. One can clearly see how a succession decision for a family business owner would be characterized by many of these conditions due to it’s high-stakes, rarity, and emotional nature, thus making it a fitting domain to study. Other studies also suggest that biases resulting in escalating commitment and failure to appropriately weight variables (Dörner & Schaub, 1994; Schwenk, 1995; Tversky & Kahneman, 1974) influence leader decision-making at all levels. At the start of the decision making process, there may already be family members being considered which makes escalating commitment to these individuals quite likely. This suggests that one can help leaders to make better decisions by de-biasing the way they process the available information so the eventual decisions are more in line with what a rational actor should do (Bazerman, 2006).
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FAMILY BUSINESS FOUNDERS’ INFLUENCE ON FUTURE SURVIVAL OF FAMILY BUSINESSES

FAMILY BUSINESS FOUNDERS’ INFLUENCE ON FUTURE SURVIVAL OF FAMILY BUSINESSES

The origin of a family business and its founder determines its success and transition across generations. There is increasing evidence that family businesses continue to move progressively from the founders to the next generations of ownership (Aronoff, Astrachan, Mendosa & Ward 1997). To transit their businesses successfully, founders spend much time empowering their successors with appropriate leadership skills, management skills and governance mechanisms (Lansberg 1999:24; Ward 2004:7). In their study of family succession, Gersick, Lansberg, Desjardins and Dunn (1999) found that some business founders invest much energy in a pool of siblings to equip them will appropriate skills to propel their businesses to the future. Such capacity building enables businesses to have multiple successors and reduces chances of failure. The approach has increasingly led to many brothers and sisters running family businesses (Ward, 2004).
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