Successor selection in family business using theory of planned behaviour and cognitive dimension of social capital theory: evidence from Ghana

Abstract

PurposeSuccession of family enterprises has been an issue of concern to a number of researchers, and extensive studies have been conducted on this. Transfer of family business from one generation to next has resulted in collapse of most family business in both developed and developing economies. This study looked at succession in family enterprise in Ghana using theory of planned behaviour (Ajzen, 1991) and cognitive dimension of social capital theory to know the intention of founder/incumbent to hand over the family business to an internal successor.Design/methodology/approachOur target population for this study is family businesses run in Ghana, Western region. Ghana is not having statistical database on family businesses; therefore, the study relied on the database of registered SMEs which was gotten from Registrar General's Department, Ghana. This is the government department that is in charge of registering business in Ghana. A sample of 596 was used and received a response rate of 60%. The study used structural equation model to find out how the variables correlate to discover the intention of the founder/successor on internal succession.FindingsIt was discovered that intention of founder/incumbent to hand over to an internal successor is predominantly determined by attitude, subjective norm, perceived behavioural control and cognitive dimension of the social capital. Trust does not influence the intention of founder/incumbent but attitude; this rejects the findings of most researchers.Research limitations/implicationsMost family enterprises were not registered, which made it difficult to reach out to all family businesses. This limited the authors approach to only the registered family enterprises.Practical implicationsFamily firms are the backbone of any economy, which comprise mostly of SMEs. Therefore, the understanding of succession by incumbents/founders as well as policymakers enhances firms' value and continuity.Originality/valueThe study was conducted in Africa, Ghana in particular, owing to the limited studies in this region.

Effect of social capital on agribusiness diversification intention in the emerging market

“…Furthermore, close connections to create trust in relevant local political organizations may also increase the agribusinessmen's goals toward diversifying their businesses. Besides, we agreed with the finding of Wu et al (2020) that trust in general does not directly affect behavioral intention. Therefore, we suggest the following hypotheses:…”

“…Finally, the perceived behavioral control is an individual's perception of the ability to do a particular behavior or an individual's perception of the difficulty in implementing the behavior (Ajzen, 1991). For the current study, perceived behavioral control is the respondents' perception toward diversifying agribusiness, which has a direct and positive impact on behavioral intention, as suggested by Ting et al (2016), Aleksandrova et al (2019), Lan and Luc (2020), and Wu et al (2020). We argue that this positive influence also exists in agribusiness.…”

“…Behavioral attitude for this study refers to the attitude to diversify agribusiness. Some prior studies showed that behavioral attitude positively affects behavioral intention (Murugesan and Jayavelu, 2015;Ting et al, 2016;Wu et al, 2020). Similarly, Liñ an and Chen (2009), JIC 23,1 Aleksandrova et al (2019), and Lan and Luc (2020) implicated a significant relationship between the attitude and intention of becoming a social entrepreneur.…”

“…Individuals may consider whether their actions are in the presence of social norms that accept and encourage them to do that. Thus, they tend to adopt behaviors under the pressure of the surrounding people (Ting et al, 2016), Lan and Luc (2020), Wu et al, (2020). They may not be willing to diversify their agribusiness until they need to meet the needs or social pressures from surrounding people.…”

“…SC also strengthens microenterprise innovativeness, entrepreneurial competencies, competitive advantage (Corvino et al, 2019), or motivates the growth of a business, boosts sales, obtains competitive advantages (Sallah and Caesar, 2020), and increases well-being (Calcagnini and Perugini, 2019). SC resources are especially important and seen as primary resources that influence family-owned businesses (Wu et al, 2020). Furthermore, facets of SC positively affect knowledge sharing, which positively affects three components of intellectual capital (i.e.…”