Nonfamily knowledge during family business succession: a cultural understanding

Abstract

Purpose Knowledge transfer plays a key role in the succession process. While much attention has been given to the passing of business knowledge form incumbent to successor, less is known about the use of nonfamily knowledge during this most crucial of family business events. The purpose of this paper is to look how knowledge from nonfamily employees is treated at times of succession. Importantly, it considers how the controlling family’s cultural background may influence nonfamily knowledge use, and subsequent implications for the succession process. Design/methodology/approach An exploratory comparative case study design is adopted in order to uncover the complex social and cultural dynamics around knowledge use. Four case studies are presented from family businesses of different, and contrasting, cultural origins. Data were collected using semi-structured interviews, observations and formal secondary data from the organisations, all of whom operate in the UK. Findings Findings reveal a complex picture, part influenced by the cultural dynamics of the family and part by business necessity. Specifically, power–distance appears as an informative cultural dimension, influencing how knowledge is used and nonfamily are perceived. While some family businesses privilege the knowledge from family, others see the need to build knowledge relationships more broadly. Originality/value This paper provides further evidence to the heterogeneity of family businesses. It moves beyond a processual explanation of succession to develop a more contextually aware understanding of the dynamics and sensitivities involved.

When is the right time for succession? Multiple cases of family businesses in Indonesia

“…In 1998, after the finish of his mechanical engineering school, this 27 years old son joined the family business and began working together with his 54 years old father. He was the eldest son, and in the Chinese family business, it was common that the eldest son would requisition the business from the father, although the founder had experienced and educated daughters (Wasim et al , 2018). In 2000, he was appointed to become the chairman of BP and became the third-generation leader.…”

“…The issue of this process is not an easy thing to be solved because there were many arduous decisions made to ensure business survival (Brockhaus, 2004). It symbolizes the most uncertain time in the life of a family business (Wasim et al , 2018). Most of the family businesses did not succeed in passing their ownership to the third generation.…”

“…The key implication of these stages is the process of developing successor readiness to receive the baton. Developing the successor readiness, includes knowledge transfer from the predecessor becomes an important moment of the succession process and essential asset for the good results of the succession (Wasim et al , 2018).…”

Institutional influences on entrepreneurial behaviours in the family entrepreneurship context: towards an integrative framework

“…Non-family knowledge during family business succession: a cultural understanding. Wasim et al (2020) offer an exploratory study of four cases of family businesses operating in the UK to understand how the (national) culture (according to Hofstede's four initial dimensions) of the business family affects knowledge sharing and knowledge transfer during the succession process. By studying firms operating in the same national institutional environment, but from different ethnic origins, the authors are able to underscore differences among business families, specifically differences related to family (ethnic) culture as informal institution.…”

“…Going beyond the dichotomous approaches embraced by previous research, Table II shows how different institutions complement and compete. We see, for instance, that national cultures permeate and are complemented by other elements and at other levels (reinforcement according to Scott, 2010 normative elements of a field relay this assumption of difference (Franco and Piceti, 2020) or cognitive-cultural elements on more micro-levels such as within the family reinforce them (Xiong et al, 2020). In collective cultures (or those self-perceived as such), the assumption of "we vs they" is relayed and reinforced on the family level, influencing, for example, which resources are shared and how (Estrada-Robles et al, 2020), and permeates the family firm to influence the process of legitimacy acquisition by the successor (Wasim et al, 2020).…”