A conceptual model for leadership succession planning for family-owned business enterprises

Abstract

Family business has gained prominence over the years in South Africa and worldover as one of the critical vehicles for employment creation and hence poverty eradication. However, family businesses face several challenges. One of the serious challenges is lack of leadership succession planning which ultimately leads to low performance levels and lack of sustainability. Despite several studies that have been conducted on family business generally, little information exists on the conceptual model for leadership succession planning. In view of the growing importance of family business and lack of leadership succession planning model, this study sought to investigate the relationship between leadership succession planning, performance and sustainability of family-owned businesses. Both these research objectives were pursued with an ultimate view of developing practical guidelines and a model that family-owned businesses in South Africa can use to mediate challenges inherent in leadership succession planning. The study used a sequential mixed methodology that started with a quantitative study which was followed by a qualitative study. The researcher used a mixed-method framework by employing purposive and snowball sampling in selecting and collection of data from the family-owned businesses. Questionnaires and semi-structured interviews were used. Data collected through questionnaires was analysed using IBM SPSS Version 25 and was used in understanding the demography of the participants and the inherent trends in their experiences of leadership succession planning. Data collected through semi-structured interviews identified themes after being processed and analysed using Atlas.ti Version 8. Thematic analysis was done to ultimately make meaning of thematic data in order to answer the research questions. The study revealed that leadership succession planning is a process rather than an event. It also emerged that leadership succession planning is a multi-dimensional and complicated process that is not easy to manage and hence requires much careful planning and mediation. The study also established that the process of managing leadership succession is determined by factors that include family values such as trust, honesty and unity and even aspects of effective leadership, interest and transition awareness. Another exciting study observation was the existence of relationships among leadership succession planning, performance and sustainability of family-owned businesses, which has already been widely acknowledged by other researchers. Interestingly, the study also revealed that leadership succession planning in family-owned businesses largely depends on how well the process itself is managed. Based on the findings, the study presented several practical guidelines and proposed a leadership succession planning model that family-owned business can adopt and adapt for use, as they grapple with succession planning in any type/size of family-owned business. Overall, the study made theoretical and practical contributions to the field of leadership and business management. Recommendations were also identified and suggested for further research studies