A Quantitative and Qualitative Inquiry into Family Business Succession Planning
In recent times, the family business has become an active study area among researchers. Family businesses contribute enormously to the economy and are of utmost importance. Succession is defined as the passing of business leadership from the owner to the successor. Since the previous research has shown that only 30% have survived the succession to the second generation and a mere 10% to the third, it is crucial for family businesses to engage in succession planning to continue through generations. The objectives of the current study were; to investigate whether the family business owners plan for succession and the determinants of family business succession planning. The population was family businesses located in the Gampaha Municipal Council area, Western Province, Sri Lanka. A list of fifty-two (52) members of the Gampaha United Trade Association who attended the two most recent meetings was initially considered as the sample, of which 45 members responded. The sample was further increased to 84 by adopting the snowball sampling technique. Primary data were collected through telephone surveys which were guided by a pre-tested semi-structured questionnaire. In-depth interviews were also conducted with selected respondents to obtain qualitative data based on their responsiveness and higher levels of succession planning. Descriptive statistics and binary logistic regression were used to analyse the data. The findings revealed that the majority (57%) of the respondents had taken at least a single step towards succession planning. Results further showed that family business succession planning is more likely to occur when the owner's level of education increases, family commitments increase, family involvement in the business increases, business age and size increase. Furthermore, the findings revealed that family business succession planning is less likely to occur with increasing levels of family cohesion. Quantitative research findings were supplemented by specific patterns identified through in-depth case studies.
Keywords: Family Businesses, Family Business Succession, Family Business Succession Planning, Selecting Successors