Development of a new concept and definition of inheritance risk management in family businesses toward sustainability

Abstract

This paper examines how family businesses manage risks when transferring wealth across generations to ensure sustainability. It develops a thorough framework focusing on maintaining family legacies and business continuity. Key challenges identified include managing control, balancing interests, planning succession, preparing future leaders, and maintaining respect for leadership. The study uses a quantitative method to show that managing risks related to the owner's death is crucial. The findings suggest that managing inheritance risks and achieving successful transitions are vital for the sustainability of family businesses. Inheritance Risk Management (IRM) also helps mediate the impact of legacy risk management on sustainability. The paper recommends creating guidelines, launching awareness campaigns, offering specialized courses, and promoting family governance to improve business performance and social responsibility. Additionally, this research contributes to family business studies by enhancing understanding of inheritance risks and setting the stage for ongoing research and best practices development. These strategies aim to equip family businesses to meet current needs and future challenges effectively.