Family relationships during first-generation succession in family businesses

What is it about?

In our study, we delved into how family dynamics influence the succession process in first-generation family businesses. Through interviews with members of twelve such firms, we uncovered that the transition is heavily influenced by negotiation processes within the family. Family members negotiate around three key areas: defining shared identity between the current owner and successor, realizing a succession plan, and establishing the rules that guide the process. We propose a model where the relationship between incumbent and successor is akin to building a bridge, with each negotiation serving as a "brick" in its construction. Succession is portrayed as a dynamic process driven by the relationship's dynamics rather than rigid planning, emphasizing the importance of communication and negotiation in achieving a successful transition.

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Photo by Markus Spiske on Unsplash

Photo by Markus Spiske on Unsplash

Why is it important?

Family firm succession is a critical aspect of business continuity and sustainability, with implications not only for the family involved but also for the broader economy. Understanding the intricate relationship dynamics that influence succession processes is essential for ensuring smooth transitions and long-term success. By recognizing the significance of relationship negotiations in shaping succession outcomes, researchers and practitioners can develop more effective strategies to support and guide family businesses through this pivotal phase.