Incumbents Influence on Family Business Succession Process

Abstract

Post succession performance of family owned businesses has become ineffective. The foremost purpose of this study was to evaluate the level of influence coming from incumbent related factors on business succession processes in various successor modes. The targeted population was selected were the successors. The criteria to select the population were the family owned businesses that contain between 50 and 149 employees and who were involved in a business succession process within the last 10 years excluding the three years, 2007 to 2010. Sample was selected through simple random sampling method and consists of 128 units. The main data collection modes were a structured research questionnaire mail-out and data analysis was done mainly by using SPSS. All incumbents’ related factors have a positive relationship to initial satisfaction with the business succession process. However, the relatively important factors to generate higher levels of initial satisfaction with the business succession process is the relationship between incumbent and successor. The relative importance of influential factors changes when the succession mode changes. When succession is conducted with a family member successor, the most important factor for success is   successor’s relationship with the incumbent. However, when succession is done with an unrelated manager successor, there is no restively important factors to the business succession process The factors of relative importance to maximize business performance after the business succession process is: t the relationship between the incumbent and successor

Keywords: Business Succession, Family Business, Incumbent