Business succession in medium size family companies

Abstract

Post-succession performance of the Family Owned Businesses (FOB) has become fruitless and furthermore literature identifies that intergenerational succession as the prime cause for these failures. Under this setting, currently FOBs focus to do enquiry on finding alternative succession modes such as professional manager to protect FOB at least as an entity "family own- non-family managed". Comparison of post-succession performance of family and non-family successors for appropriate baton change is the initial purpose of the research. Secondly it will evaluate the level of influence comes from each stakeholder group of the Business Succession (BS) for the BS under different successor modes. With the purpose of achieving study objectives, more comprehensive integrative approach with two stages comprising of an exploratory study and a formal study will be used respectively. Under the exploratory study it has examined the systematic, empirical and theoretical literature. Then, by extrapolating, interpolating, and making logical connections among the studies, the researcher has developed conceptual framework. Targeted population is selected based on the successors of FOBs. Criterion of selected population should contain employees in between 50-149 and involved in BS within last 10 years excluding nearest three years (2000 - 2007). The study will be theoretically as well as practically significant. In practically, the identification of most appropriate successor and the influence of the stakeholders will help to minimize the rate of shut-down FOBs after BS. In theoretically this research significantly contributes to the regional and international knowledgebase. This empirical research contributes internationally by comparing both succession alternatives with their post-succession performances and by evaluating and comparing stakeholder group influence to the BS process.