Determining the contributory factors to successful succession and post-succession performance of family-owned SMEs in South Eastern Nigeria
Objective: This study seeks to determine the contributory factors to successful succession and post-succession performance. And the role of these factors in the post-succession financial and non-financial performance of family-owned SMEs in South Eastern Nigeria.
Research Design & Methods: The adopted quantitative methodology is interview. In each of the purposively selected 25 family-owned SMEs, the incumbent, a sibling of the incumbent and a top level manager were interviewed. In all, 75 respondents were interviewed. The transcribed interviews were subjected to thematic content analysis.
Findings: The contributory factors to successful succession are the characteristics of succession planning, the incumbent, the potential successor, and the family-owned SME. The factors that contribute to the post-succession performance are the culture of making succession planning a continuous process, and the characteristics of the incumbent and the family-owned SME. These factors ensure that children of the incumbent in the SME become more active so as to be selected as potential successors.
Contribution & Value Added: The study identified the contributory factors to successful succession and post-succession performance of the family-owned SMEs. To achieve successful succession and post-succession performance, the incumbents should inculcate the characteristics of these factors into their potential successors. Also, these characteristics should be made part of the culture of the family-owned SMEs.
Family-Owned SMEs; Successful Succession; Post-Succession; Financial Performance; Non-Financial Performance
Aderonke, J. (2014). Culture determinant and family business succession in Jos metropolis, Plateau State, Nigeria. Journal of Emerging Trends in Economic and Management Sciences, 5(5), 379-390.
Akani, V.C. (2015). Management succession planning and corporate survival in Nigeria: A study of banks in Port Harcourt. European Journal of Business and Management, 7(27), 153-176.
Aldamiz-Echevarría, C., Idígoras, I. & Vicente-Molina, M. (2017). Gender issues related to choosing the successor in the family business. European Journal of Family Business Research, 7, 54-64. doi: 10.1016/j.ejfb.2017.10.002
Amran, N.A. & Ahmad, A.C. (2010). Family succession and firm performance among Malaysian companies. International Journal of Business and Social Science, 1(2), 193-203.
Amran, N.A. (2011). The effect of owner’s gender and age to firm performance: A review on Malaysian public listed family businesses. Journal of Global Business and Economics, 2(1), 104-116.
Anderson, A.R., Jack, S.L. & Dodd, S.D. (2005). The role of family members in entrepreneurial networks: Beyond the boundaries of the family firm. Family Business Review, 18(2), 135-154.
Astrachan, J.H. & Zellweger, T. (2008). Performance of family firms: A literature review and guidance for future research. ZfKE – Zeitschrift für KMU und Entrepreneurship, 56(1/2), 1-22.
Bennedsen, M., Fan, J.P., Jian, M. & Yeh, Y.H. (2015). The family business map: Framework, selective survey, and evidence from Chinese family firm succession. Journal of Corporate Finance, 33, 212-226.
Bisogno, M. & Vaia, G. (2017). The role of management accounting in family business succession. African Journal of Business Management, 11(21), 619-629. doi: 10.5897/AJBM2017.8396
Bjuggren, P., Nordström, L. & Palmberg, J. (2015). Efficiency of female leaders in family and non-family firms. Ratio Working Paper No. 259.
Bjursell, C. (2011). Cultural divergence in merging family businesses. Journal of Family Business Strategy, 2(2), 69-77.
Bocatto, E., Gispert, C. & Rialp, J. (2010). Family-owned business succession: The influence of pre-performance in the nomination of family and nonfamily members: Evidence from Spanish firms. Journal of Small Business Management, 48(4), 497-523.
Bouguerra, A., Yezza, H. & Mzoughi, M.N. (2016). Post-successions performance of family firms: The role of social skills and demographic characteristics of the successor. Strategic Management Quarterly September, 4(3), 75-86. doi: 10.15640/smq.v4n3a5
Boyd, B., Botero, I.C. & Fediuk, T.A. (2014). Incumbent decisions about succession transitions in family Firms: A conceptual model. International Journal Financial Studies, 2, 335-358. doi:10.3390/ijfs2040335
Bozer, G., Levin, L., Santora, J. (2017). Succession in family business: Multisource perspective. Journal of Small Business and Enterprise Development, 24(4), 753- 774. https://doi.org/10.1108/JSBED-10-2016-0163
Cabrera-Suárez, M.K. & Martín-Santana, J.D. (2012). Successor's commitment and succession success: Dimensions and antecedents in the small Spanish family firm. The International Journal of Human Resource Management, 23(13), 2736-2762. doi:10.1080/09585192.2012.676458
Cespedes, F.V. & Galford, R.M. (2004). Succession and failure. Harvard Business Review, 82(6), 31-35.
Chaimahawong, V. & Sakulsriprasert, A. (2012). Family business succession and post succession performance: Evidence from Thai SMEs. International Journal of Business and Management, 8(2), 19-28. doi:10.5539/ijbm.v8n2p19
Cheokas, G.G. (2013). In their own words: How does the succession experience of second generation family business owners influence future approaches to succession? (Unpublished Ph.D thesis), Georgia State University, Atlanta.
Chiang, H. & Yu, H.J. (2018). Succession and corporate performance: The appropriate successor in family firms. Investment Management and Financial Innovations, 15(1), 58-67.
Chrisman, J.J., Chau, J.H. & Sharma, P. (1998). Important attributes of success in family businesses: An exploratory study. Family Business Review, 12(1), 19-34.
Chrisman, J., Chua, J. & Sharma, A. (2008). Factors preventing intra-family succession. Family Business Review, 21(2), 183-199.
Colli, A. (2011). Contextualizing performance of family firms: The perspective of business theory. Family Business Review, 20(10), 1-15.
Davis, J.A. (2014). Managing the family business: Leadership roles. Harvard Business School Working Knowledge, Baker Library.
De Alwis, A.C. (2016). Incumbents influence on family business succession process. European Journal of Business and Management, 8(13), 96-105.
De Massis, A., Chua, J.H. & Chrisman, J.J. (2008). Factors preventing intra-family succession. Family Business Review, 21(2), 183-199.
Dumbu, E. (2018). Challenges surrounding succession planning in family-owned businesses in Zimbabwe: Views of the founding entrepreneurs of the businesses at Chikarudzo Business Centre in Masvingo District. The International Journal of Business Management and Technology, 2(2), 38-45.
El-Chaarani, H. (2014). The success keys for family firms: Comparison between Lebanese and French systems. Lebanese Science Journal, 15(2), 133-150.
European Commission (2009). Final report of the expert group, overview of family business relevant issues: Research, network policy measures and existing studies. Retrieved from http://ec.europa.eu/enterprise/policies/sme/promoting-entrepreneurship/family-business/family_business_expert_group_ report_en.pdf on December 9, 2018.
Fan, J.P., Wong, T.J. & Zhang, T. (2012). Founder succession and accounting properties. Contemporary Accounting Research, 29(1), 283-311.
Fernández-Aráoz, C., Iqbal, S. & Ritter, J. (2015). Why family firms in East Asia struggle with succession. Harvard Business Review. Retrieved from https://hbr.org/2015/03/ why-family-firms-in-east-asia-struggle-with-succession on December 9, 2018.
Georgiou, T. & Vrontis, D. (2013). Wine sector development: A conceptual framework toward succession effectiveness in family wineries. Journal of Transnational Management, 18(4), 246-272.
Ghee, W.Y., Ibrahim, M.D. & Abdul-Halim, H. (2015). Family business succession planning: Unleashing the key factors of business performance. Asian Academic of Management Journal, 20(2), 103-126.
Giovannoni, E., Maraghini, M.P. & Riccaboni, A. (2011). Transmitting knowledge across generations: The role of management accounting practice. Family Business Review, 24(2), 126-150.
Griffeth, R.W., Allen, D.G. & Barrett, R. (2006). Integration of family-owned business succession with turnover and life cycle models: Development of a successor retention process model. Human Resource Management Review, 16(2), 490-507.
GTI (2000). PRIMA international research report. London: Grant Thornton International.
Hadryś-Nowak, A. (2018). When successor becomes the leader of international family business? A case study from Poland. Paper presented at the 9th ENTRE Conference/5th AIB-CEE Chapter Annual Conference, Kraków, Poland, September 12-14.
Handler, W. (1994). Succession in family business: A review of the research. Family Business Review, 7(I), 133-157.
Hania, M.F. (2012). Factors influencing family business succession (case study: Gaza family businesses). Department of Business Administration, Faculty of Commerce, Islamic University, Gaza.
Hiebl, M.R. (2013). Risk aversion in family firms: What do we really know? The Journal of Risk Finance, 14(1), 49-70.
Iraki, W.N. (2009). The family as the forgotten foundation of long term growth in every economy. Business Daily, Nation Media Group, Nairobi.
Jamali, D. (2009). Constraints and opportunities facing women entrepreneurs in developing countries. Gender Management, 24(4), 232-251.
Judge, T.A. & Livingston, B.A. (2008). Is the gap more than gender? A longitudinal analysis of gender, gender role orientation, and earnings. Journal of Applied Social Psychology, 93, 994-1012. doi: 10.1037/0021-9010.93.5.994
Kansikas, J. & Kuhmonen, T. (2008). Family business succession: Evolutionary economics approach. Journal of Enterprising Culture, 16(03), 279-298.
Kiilu, J.M. & Ntale, J.F. (2018). Businesses: An empirical investigation of Nairobi Central Business District of Kenya. European Journal of Business and Management, 10(20), 91-97.
Krishnan, R.V. (2012). SME and succession planning. Retrieved from http://search.proquest.com/ docview/1321759146?accountid=458http://linksource.ebsco.com/linking.aspx?sid=ProQ%3 Anewsstand&fmt=journal&genre=unknown&issn=&volume=&issue=&date=20120511&spage =&title=Businessline&atitle=SME+and+succession+planning&au=Krishnan%2C+R+Venkata&isbn=&jtitle=Businessline&btitle=&id=doi on December 9, 2018.
Lansberg, I. & Gersick, K. (2015). Educating family business owners: The fundamental intervention. Academy of Management Learning & Education, 14(3), 400-413. doi.:10.5465/amle.2014.0254.
Maalu, J., McCormick, D., K’Obonyo, P. & Machuki, V. (2013). Succession strategy and performance of small and medium family businesses in Nairobi, Kenya. International Journal of Education and Research, 1(6), 1-22.
Maciel, A.S., Ramos, M.I.G., Aguilar, J.L.E. & Reyna, J.M.M. (2015). The influence of family relationship in the succession: A factorial analysis of Mexican enterprises. Journal of Family Business Management, 5(2), 238-256.
Mejbri, K.M. & Affes, H. (2012). Determinants of intention and succession planning in Tunisian family business. International Journal of Business and Social Science, 3(12), 118.
Michel, A. & Kammerlander, N. (2015). Trusted advisors in a family business´s succession- planning process – An agency perspective. Journal of Family Business Strategy, 6(1), 45-57.
Miller, S.P. (2015). Developing next-generation leadership talent in family business: The family effect (Unpublished Ph.D thesis), Weatherhead School of Management. Retrieved from https://etd.ohiolink.edu/!etd.send_file?accession=case1427837349& disposition=inline on December 9, 2018.
Molly, V., Laveren, E. & Deloof, M. (2010). Family business succession and its impact on financial structure and performance. Family Business Review, 23(2), 131-147. doi: 10.1177/0894486510365062
Monday, J.U., Akinola, G.O., Olegbenla, P. & Aladeraji, O.K. (2014). Strategic management and firm performance: A study of selected manufacturing companies in Nigeria. European Journal of Business and Management, 7(2), 161-171.
Mueller, S.L. & Dato-On, M.C. (2008). Gender-role orientation as a determinant of entrepreneurial self-eﬃcacy. Journal of Development Entrepreneurship, 13, 3-20. doi: 10.1142/S108494670800082X
Musa, B.M. & Semasinghe, D.M. (2014). Leadership succession problem: An examination of small family businesses. European Journal of Business and Management, 6(34), 301-306.
Nordqvist, M., Wennberg, K. & Hellerstedt, K. (2013). An entrepreneurial process perspective on succession in family firms. Small Business Economics, 40(4), 1087-1122.
Obadan, J.A. & Ohiorenoya, J.O. (2013). Succession planning in small business entreprises in Edo State. European Scientific Journal, 9(31), 64-76.
Oduwusi, O.O. (2018). Succession planning as a key to effective managerial transition process in corporate organizations. American Journal of Management Science and Engineering, 3(1), 1-6. doi: 10.11648/j.ajmse.20180301.11
OECD (1998). Fostering entrepreneurship. Paris: Organization for Economic Co-operation and Development (OECD).
Ogbechie, R. & Anetor, F.O. (2015). An appraisal of succession planning in family-owned businesses in Lagos State, Nigeria. European Journal of Business and Management, 7(12), 1-5.
Ogundele, O.J.K., Idris, A.A. & Ahmed-Ogundipe, K.A. (2012). Entrepreneurial succession problems in Nigeria’s family businesses: A threat to sustainability. European Scientific Journal, 8(7), 208-227.
Okafor, L.I., Onifade, T.A. & Ogbechi, A.D. (2018). Analytical review of small and medium scale enterprises in Nigeria. International Journal of Small Business and Entrepreneurship Research, 6(2), 32-46.
Onuoha, B.C. (2013a). Wealth creation, retirement and succession planning of entrepreneurs in South-East, Nigeria. International Business and Management, 7(1), 99-105.
Onuoha, B.C. (2013b). Poor succession planning by entrepreneurs: The bane of generational enterprises in South-East, Nigeria. AFRREV International Journal of Arts and Humanities, 2(2), 270-281.
Overbeke, K.K., Bilimoria, D. & Somers, T. (2015). Shared vision between fathers and daughters in family businesses: The determining factor that transforms daughters into successors. Frontiers in Psychology, 6(625), 1-15. doi: 10.3389/fpsyg.2015.00625
Paul, V., Barde, B.E., Abbah, J.E.I. & Idika, K. (2017). Effects of intra-family relationship on post-succession performance of selected family businesses in North East Nigeria. International Journal of Development Strategies in Humanities, Management and Social Sciences, 7(3), 134-149.
Phikiso, Z. & Tengeh, R.K. (2017). Challenges to intra-family succession in South African townships. Academy of Entrepreneurship Journal, 23(2), 1-13.
Poza, E.J. (2013). Family Business. Mason, OH: South-Western Cengage Learning.
Prencipe, A., Bar-Yosef, S. & Dekker, H.C. (2014). Accounting research in family firms: Theoretical and empirical challenges. European Accounting Review, 23(3), 361-385.
Pyromalis, V.D. & Vozikis, G.S. (2009). Mapping the successful succession process in family firms: Evidence from Greece. International Entrepreneurship and Management Journal, 5(1), 439-460.
Rotich, E. (2014). The effects of succession planning on financial performance of family owned supermarkets in Nairobi County. University of Nairobi Repository.
Saan, R., Enu-Kwesi, F. & Nyewie, F.R. (2018). Factors influencing succession planning for continuity of family-owned businesses in the Wa Municipality, Ghana. Universal Journal of Management, 6(5), 165-177. doi: 10.13189/ujm.2018.060504.
Salvato, C. & Moores, K. (2010). Research on accounting in family firms: Past accomplishments and future challenges. Family Business Review, 23(3), 193-215.
Schroder, E., Schmitt-Rodermund, E. & Arnaud, N. (2011). Career choice intentions of adolescents with family business background. Family Business Review, 24(4), 305-321.
Sharma, P. & Chrisman, J.J. & Chua, J.H. (1997). Strategic management of the family business: Past research and future challenges. Family Business Review, 10(1), 1-35.
Sharma, P., Chrisman, J.J. & Chua, J.H. (2003). Succession planning as planned behaviour: Some empirical results. Family Business Review, 16(1), 1-15.
Sharma, P., Chrisman, J. & Chua, J. (2004). An overview of the field of family business studies: current status and directions for the future. Family Business Review, 17(1), 1-36.
Sharma, P., Chrisman, J.J., Pablo, A.L. & Chua, J.H. (2001). Determinants of initial satisfaction with the succession process in family firms: A conceptual model, Entrepreneurship Theory and Practice, 25(3), 17-35.
Sharma, P. & Irving, P.G. (2005). Four bases of family business successor commitment: Antecedents and consequences. Entrepreneurship: Theory and Practice, 29(1), 13-33.
Sharma, A. & Sumita, D. (2013). Small scale family business succession and sustainability: A study in Chattisgarh. SDMIMD Journal of Management, 4(2), 17-27.
Stalk, G. & Foley, H. (2012). Avoid the traps that can destroy family businesses. Harvard Business Review, 90(1), 25-227.
Surdej, A. & Wach, K. (2012). The dynamics of succession in family businesses in Poland - Empirical results. Economia Marche Journal of Applied Economics, XXXI(2), 109-128.
The European Commission (2008). Overview of family business relevant issues. A study conducted by the Austrian Institute for SME Research.
Utami, C.W. (2017). The role of personality system succession pattern in family business in Indonesia. Scholars Journal of Economics, Business and Management, 4(12), 870-879. doi: 10.21276/sjebm.2017.4.12.1
Venter, E., Boshoff, C. & Maas, G. (2005). The influence of successor‐related factors on the succession process in small and medium‐sized family businesses. Family Business Review, 18(4), 283-303. doi: 10.1111/j.1741-6248.2005.00049.
Wahjono, S.I., Wahjoedi, W., Idrus, S. & Nirbito, J.G. (2014). Succession planning as an economic education to improve family business performance in East Java Province of Indonesia. Journal of Asian Scientific Research, 4(11), 649-663.
Walsh, G. (2011). Family business succession: Managing the all-important family component. Retrieved from http://www.kpmg.com/ca/en/services/kpmg-enterprise /centre- for-family-business/documents/3468_succession.pdf. on December 9, 2018.
Wang, C. (2010). Daughter exclusion in family business succession: A review of the literature. Journal of Family & Economic, 31(4), 475-484.
Warnar, P. (2012). Family business and knowledge transfer: How to survive to the next generation. Delft University of Technology.
Wiklund, J., Nordqvist, M., Hellerstedt, K. & Bird, M. (2013). Internal versus external ownership transition in family firms: An embeddedness perspective. Entrepreneurship Theory and Practice, 37(6), 1319-1340.
Williams, D.W., Zorn, M.L., Russell Crook, T. & Combs, J.G. (2013). Passing the torch: Factors inﬂuencing transgenerational intent in family ﬁrms. Family Relations, 62(3), 415-428.
Ye, J., Parris, M.A. & Waddell, D. (2013). The succession decision in Chinese-Australian family businesses: An exploratory study. Small Enterprise Research, 20(2), 110-125. doi:10.5172/ser.2013.20.2.110
Zahrani, M.A., Nikmaram, S. & Latifi, M. (2014). Impact of family business characteristics on succession planning: A case study in Tehran industrial towns. Iranian Journal of Management Studies, 7(2), 243-257.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
1. The author agrees to publish his article free of charge in the journal "International Entrepreneurship Review" (IER) in the language of the above publication (English). The editorial staff reserves the right to shorten texts and to change titles.
2. The journal allows the authors to keep their copyrights (the copyright) in accordance with the license: Creative Commons CC BY 4.0 from 2023 (since vol. 9, no 1). By the end of 2022 we published under Creative Commons CC BY-ND 4.0.
Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) only the final version of the article, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access). We advise to use any of the following research society portals: