The Impact of Succession Planning on Product and Service Innovation at Family Businesses in Yemen.

Abstract

As increasing numbers of family businesses are emerging, the marketplace is in danger of becoming saturated with products that end users do not understand while competition between businesses becomes stiffer. For businesses that operate in a saturated space to access new opportunities, they need to continually invest in the development of new products and services via a process of creativity and innovation. However, in the contemporary business landscape, innovation has extended beyond being a means of gaining a competitive advantage to being a necessity. To achieve this objective, family firms need to develop an understanding of the factors that influence innovation in order to promote, preserve, and boost innovative practices. This research investigated the impact of succession planning on product and service innovation in Yemeni family businesses. Quantitative approach was employed for the purpose of answering the research questions and testing the underlying hypotheses. A survey questionnaire was utilized as the main instrument to gather the required data from the owners of family firms and organizations that the Yemen Tax Authority has classified as top taxpayers. The sample size consisted of 120 family businesses whose headquarters were located in Sana'a City, Republic of Yemen. Only 116 questionnaires were completed with no invalid data, representing a high response rate of 97%. The results show significant relationships between succession planning and its four dimensions; successor selection and training, post-succession business strategy, post-succession role of incumbent, dissemination of the succession decision with product and service innovation. In addition, the results of Regression analysis reveal that succession planning as the whole independent variable has a significant impact on innovation. Furthermore, results show that the four dimensions of succession planning; successor selection and training, post-succession business strategy, post-succession role of incumbent, and dissemination of the succession decision have a significant impact on product and service innovation. These results provide recommendations to the family business owners, at that they should establish strong and vested plans for succession. They should pay attention to the quality of training that is offered to potential successors. Family businesses should build and rely on "family constitution", which is considered as an important document that includes a definition of the basic values, vision, and general objectives of the company.

Succession Management: A Proficient Resource in Organisational Sustainability?

“…Due to competition, drastic organisational changes which affect the workforce, and oftentimes intense corporate governance requirements, the need for succession management, may have become imperative. The pivotal moment in an organisation's life, is the passing of the baton from one generation of leaders to another (Alradhi et al, 2021), as it impacts business success which in turn impacts economic growth. It is on this premise that this study hypothesises that: H2: SM will positively and significantly be related to EC in the Nigerian insurance industry.…”

Effect of Succession Management Practices on Performance of Insurance Firms

“…An investigation of the effect of succession planning on product and service innovation at Yemeni family firms was conducted by Alradhi et al (2020). In Yemeni family enterprises, this study looked at how succession planning affects new product and service development.…”

The growth potential of Palestinian family businesses: immigrant versus home-country entrepreneurship

“…Additional studies support the view that there is a positive relationship between investment in innovation and subsequent organizational performance (Larios-Francia and Ferasso, 2023; Liu et al , 2022; Zhang et al , 2022), particularly as marketplaces become increasingly saturated. Under these circumstances, businesses need to continually invest in developing new products and services, not as a choice but out of necessity (Alradhi et al , 2020). If they want to be distinct in their respective marketplaces, these enterprises must understand, preserve and boost their corresponding innovative practices.…”