Succession Strategies and Performance of African Family Businesses: An Empirical Investigation of Nairobi Central Business District of Kenya

Abstract

A good number of African family businesses in Kenya do not survive to the third generation because of family disputes, greed of some family members, and lack of business professionalism among many others. However, succession of family businesses has been an issue of concern for decades in terms of the subject, audience and theories. Therefore, this research attempted to investigate the influence of succession strategies which were proxied by leadership strategies, ownership strategies, wealth transition strategies, as well as family values and legacy strategies, on business performance. The study employed descriptive research design. The population of interest consisted of 600 African family businesses operating within Nairobi central business district from which a sample size of 120 businesses was picked. The data was collected through use a questionnaire and analyzed by descriptive statistics and multiple regression. Regression model was used to estimate the effects of succession strategies on the performance of African family businesses. The study findings show that leadership strategies as well as family values and leadership strategies affect the performance of African family businesses positively. On other hand, ownership strategies were found to have a negative effect on the performance of family business. It was recommended that family businesses should show leadership by coming up with clear business visions and missions; they should embrace professionalism to avoid nepotism and favouritism in the management of their businesses; and that, they should respect the values and legacy strategies of their business founders.

Keywords: Succession Strategies, Leadership Strategies, Ownership Strategies, African Family Business, Business Performance, Family Values and legacy