Analysis and Discussion Review of Succession in Family Businesses

The intergenerational succession process in family businesses is important because of the high rate of attrition among family businesses that initially were successful. Most family businesses are formed by a strong, narrowly focused entrepreneur. A high proportion of these businesses that attained success, however, fail to survive the succession process to the second generation. Even fewer survive to the third generation (Ibrahim, Angelidis, and Parsa, 2008). The failure of such companies represents significant costs to the families involved, as well as reflecting social costs and economic costs for the broader society (Stanaland, 2008). Counterproductive intergenerational succession processes are the chief culprits in such failures (Danes, Loy, and Stafford, 2008).

The following section of this report, "Analysis an

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e family business. Thus, all succession processes require careful planning. The best approach to the successful development and implementation of intergenerational succession plans that result in planned outcomes is to formalize the succession process (Eddleston, Otondo, and Kellermanns, 2008; van den Heuvel, Van Gils, and Voordeckers, 2006). Milton (2008) viewed the formalization of the process as a manifestation of controlling the succession process. These findings are consistent with other findings that are reported in the literature that is relevant to intergenerational succession in family businesses (Danes, Loy, and Stafford, 2008; Ibrahim, Angelidis, and Parsa, 2008; Stanaland, 2008). Managing Family Factions and Setting Boundaries of Responsibility Multiple factions exist within many families that are associated with family businesses. All factions probably have a stake in the family business. These stakes, however, tend to be (a) unequal and (b) differentiated in terms of the capability to control business processes. These factors are sources of potential conflict, conflict that can disrupt an intergenerational succession process within a family business. Factional interests in family businesses thus r
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Approximate Word count = 3494
Approximate Pages = 14 (250 words per page)

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