Examination of the family business and the importance of having skilled successors

Abstract

Family business succession is an antagonistic concept, which continues to constipate, the subsequent survival of businesses both family owned and non-family owned, mostly because of lack of planning and poor, abortive and ineffectual succession planning strategies. Thus, Effective succession planning is a critical component of the future success and survival of family businesses. However, choosing the right successor within a family business is not an easy process. Research suggests that it is important to achieve some form of match between the firm and the successor, but it is unclear how important this is, or what factors should be matched.
This study draws on a positivist, deductive research paradigm, and the use of quantitative methods and data analysis, to examine how important it is for family business to have successors trained in the particular field they are entering. In so doing, it focuses on the skills, education, knowledge, experience, and commitment of the potential successor. A sample of 15 family business successors and future successors in Saudi Arabia’s city of Jeddah was used. Data was collected through use of questionnaires sent to identified incumbents and potential successors and subsequently analyzed through use of quantitative statistical data analysis instruments such as SPSS and presented inform of graphs and tables. It was backed by secondary data from previous research and books.
The findings, showed that indeed, it is critically important to have successors, trained in the field the family business operates in and that successor attributes do affect the eventual performance of the firm, either positively or negatively. In particular, the research identified accounts knowledge and education as one of the asymptotic skills, a successor ought to posses. The paper recommends among others, that proper succession planning be adopted by family businesses while transferring business to the next generation and strongly recommend family businesses owners to evaluate successor attributes such as knowledge, competency, training and performance in preparing for succession...........................................................................................................................................................................................................................................................

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