Impacts of succession in family business

Abstract

Purpose -While many studies in family business research focus on mono-causal impacts of succession, the purpose of this paper is to employ a systemic approach to analyze dynamic effects of intra-family succession on multiple business areas in family-run companies. Design/methodology/approach -A system analysis using a participatory approach was conducted for a reference family-run company operating in the horticultural retail sector in Germany. The Vester Sensitivity Model, supplemented with principles from system thinking was used to identify key variables related to intra-family succession. Findings -Expert input and analysis of variable co-occurrence revealed key variables associated with succession such as "strategic planning," "productivity" and "financial flexibility." Dynamic interactions among various business areas were identified by simulating interventions in succession trajectories. In particular, key variables such as "conflicts between family and work" and "organizational climate" turned out to be highly sensitive to changes during a succession process. Practical implications -The concept and design of this system analysis tool will allow practitioners such as company managers and business consultants to better understand complex interrelations within companies and provide additional guidance with regard to critical events like business transfer. Originality/value -The present study uses system thinking to analyze succession and its dynamic and time-lagged impacts on affected business areas in family-run companies for the first time. Repeated application of the systemic approach presented here to real-world business cases will gradually improve the tool and the quality of information it provides.

Internal managerial succession in family companies

“…The most publications on family business succession appeared in the United States and Canada. In Europe, German-speaking countries (Gabriel & Bitsch, 2018), as well as Spain (Casillas, Mereno-Cerdan & Lopez, 2015) and Italy (Ruggieri, Pozzi & Ripamonti, 2014) dominate in this aspect, which confirms the thesis that the effective involvement of the next generation of the family is a sign of the generational survival of the family business (Benavides-Velasco, Quintana-Garcia & Guzman-Parra, 2013;Santora & Sarros, 2008). An important source of inspiration in planning succession are the examples embedded in the reality of the functioning of family businesses in countries such as Germany (Klein, 2004), China (Wang, Pei & Liu, 2014), India (Budhiraja & Pathak, 2018) or the Middle East (Deloitte, 2017).…”

Family businesses in North Macedonia: evidence on the second generation motivation and entrepreneurial mindset

“…Succession aspects in family business still remain an attractive topic for study (di Belmonte et al , 2016; Gabriel and Bitsch, 2019; Ramadani et al , 2020b; Short et al , 2016). The owners permanently will think on the transfer of the authority, ownership and management to the next generation, they should retire, and because of this, succession always will attract researchers to study it (Caputo and Zarone, 2019; Ip and Jacobs, 2006; Kleinsorge, 2010).…”

Sucessão e conflitos: proposições de pesquisa acerca das empresas familiares

“…The relationships and interactions among these members impact every phase of planning and the results of a succession (Saxena, 2013). Conflicts related to family versus work are extremely difficult to resolve even after a succession process has been successfully implemented (Gabriel & Bitsch, 2019). Thus, the way conflicts are constantly managed can determine the quality of organizational results (Borges & Lima, 2012).…”

“…The recent literature shows important findings linking succession with the longevity of family businesses, according to Gabriel and Bitsch (2019), however, it is emerging that there is progress in understanding the phenomenon of conflicts and their impact on succession. Thus, this article contributes to the discussions that seek a better understanding of the complex dynamics that permeate the succession process in family businesses.…”