An Appraisal of Succession Planning in Family-Owned Businesses in Lagos State, Nigeria

Abstract

Family-owned businesses in Nigeria and other nations of the world play important roles in economic growth and development some of which include creation of employment opportunities, maintenance of competition, stimulation of indigenous entrepreneurship, wealth creation, innovations and creativity, foreign exchange earnings, mobilization of savings, and contribution to the GDP. Despite these vital roles, family-owned enterprises in Nigeria are faced with the problem of succession as about 95% of family businesses do not survive the third generation of ownership. Hence, this study conducted an assessment of succession planning in family-owned business in Lagos, Nigeria with the aim of identifying the factors preventing smooth succession in family-owned enterprises. Data was elicited from questionnaires administered to founders/owners of family enterprises and analyses of the responses were done through the use of Statistical Package for Social Sciences (SPSS). The findings reveal that the lack of a succession plan is not the significant factor responsible for the problem of succession despite the fact that most family enterprises lack succession plan. There are other factors responsible for the problem of poor succession in family-owned businesses in Nigeria.

Keywords: Owner-entrepreneur, Succession planning, Family-owned business, Successor, Lagos, Nigeria