Generational Succession in Family-Owned Firms

This research presents a review of the literature and an in-depth analysis of the issue of generational succession in family-owned business. Some analysts contend that generational succession in family-owned business firms tend to fail because business governance in such firms tends to be unstable across generations. Martin (2001) stated, however, that stable governance across generations is feasible in family businesses. This review and analysis considers the issues related to generational succession affecting governance in family-owned firms.

With respect to generational transitions in family-owned businesses, the first decision that must be made is whether generational succession should be sought. Such successions require transitions that typically are associated with emotional costs. Most people who start family businesses and achieve success tend to be reluctant plan for an end to their source of success, pride, income, and self-esteem. Even when such decisions are made, the transitions that follow are difficult both for the participants and the businesses. Many founders of small businesses look upon succession planning as a form of funeral planning (Poza, 1998). As a consequence, it tends to be a rare event when generational transitions, especially from the first to the second generation, occur prior to

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ve their own unique characteristics, four key elements must be in place before a business can be successfully passed from one generation to the next. These four key elements are as follows (Zaudtke & Ammerman, 1997): 1. Succession management must be planned. The owners and founders of successful family businesses frequently are multi-talented. Replacing such a person, thus, may require more than one person. Thus, family business owners should determine exactly how the business functions. Finding people possessing the required skills from within the family or from outside the business may be difficult; therefore, planning should begin well ahead to the time of the planned transition in order to allow for an orderly transition of responsibilities. Few businesses, even family businesses, grow without the help of non-family employees. More often than not, such non-family employees hold key positions in the management structure of the business. These critical non-family employees, thus, should be kept informed about long-range succession plans. These key management employees must have a clear understanding of where they stand and what their responsibilities will be in a succession-management structure. 2. Family employment
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Some common words found in the essay are:
Zaudtke Ammerman, Family Succession, Management Planning, Stirling Stewardson, Carlock Ward, FIRMS Introduction, Continuity Planning, Cowling Howorth, Conclusion Strong, References Amundson, family business, generational succession, family businesses, family-owned business, business family, non-family employees, generational succession family-owned, poza 1998, succession family-owned, family business review, 2 family, business review, succession family-owned business, stirling stewardson 1995, carlock ward 2001,
Approximate Word count = 1591
Approximate Pages = 6 (250 words per page)

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