Family Business Succession: Evolutionary Economics Approach

Abstract

This study analyses family business continuity from founder generation to the 2nd generation in terms of succession in the context of evolutionary economics. Two literature bases; family business succession and evolutionary thinking in organisational and economic change, are reviewed and combined to provide insights to understand the nature of family business succession. Operation of the key evolutionary forces — variation, selection, retention and struggle — in family business succession are illustrated. Regarding variation, there is a concern for understanding the importance of having enough diversity within the family firm, since this diversity of routines and competences comprises the pool of variation from which to select when the environment changes. With regards to selection, there is a concern for understanding the risk of selection bias easily rooted in the family firm culture: are some variations favoured in the selection of operating, investment and search routines because of family relations, emotions and values, including decisions on who will succeed and who will own the firm in the future. Elaboration and investigation of these concepts may help to identify special characteristics of the "family firm species" that are either beneficial or risky for the survival in the evolutionary struggle.

Családi Vállalkozások Generációváltása, Mint Komplex Probléma – Oktatási Szempontból

“…A hétköznapokban kritikus dimenziónak mutatkozik a családtagok egymás közötti viszonyrendszere, valamint a család és az alkalmazottak közötti relációk sora. Ezek kezelésének a leghatékonyabb eszköze a stakeholderek közötti nyílt kommunikáció (KANSIKAS -KUHMONEN, 2008). Ugyancsak központi jellemző a tulajdonosi jogok kezelése (megtartása, átadása) és az azokból következő hatalmi eszközök direkt és szimbolikus hatása (CSIZMADIA et al, 2016).…”

Determining the contributory factors to successful succession and post-succession performance of family-owned SMEs in South Eastern Nigeria

“…A successor on the other hand is the family member who assumes managerial control and eventual ownership control of the family business after the founder has stepped down or has left the family business (Sharma, Chrisman & Chua, 1997). For the succession process to be successful, the work environment in the family business must directly or indirectly support the process (Kansikas & Kuhmonen, 2008;Sharma & Irving, 2005).…”

The role of management accounting in family business succession

“…Along these lines, Kansikas and Kuhmonen (2008) suggested the adoption of an evolutionary economics approach in understanding the succession process. A fruitful combination derives from a simple observation: succession is a crucial step in the life cycle of a family firm and, within this context, it essentially consists in managing changes over time.…”

“…Considering that the succession transition determines significant changes in family firms in terms of family relations as well as routines and rules (Kansikas and Kuhmonen, 2008), succession has been interpreted as a process of moving appropriate routines to the next generation and eliminating outdated ones.…”