BUSI 815 Week 2 Literature Review Example

The Successor's Side of the Story: A Literature Review on Next-Generation Experience in Family Business Succession

Introduction

Family firms are the most common form of business in the world, and most hope to pass from one generation to the next. Few succeed, and the failures are costly for families, employees and the communities that depend on these firms. Le Breton-Miller et al. (2004), integrating the succession literature, put the share of family firms still in family hands by the grandchildren's generation below one in ten. Research on why has grown for four decades. This review addresses a narrower question that will guide a qualitative study: what is known about how next-generation successors experience taking over a family business, and how was that knowledge produced? Sources were located through the Business Source Complete and ABI/INFORM databases using combinations of the terms family business, succession, successor and next generation, with priority given to Family Business Review and Entrepreneurship Theory and Practice, the leading journals in the field. The review is organized around four themes.

Succession as a Process of Mutual Adjustment

The literature agrees that succession is a process rather than an event. Handler (1990), studying successors in family firms through interviews, described succession as a mutual role adjustment between founder and next generation. As the founder's role moves from sole operator through monarch and overseer toward consultant, the successor's role moves from no role through helper and manager toward leader and chief decision maker. The adjustment is slow and can stall at any stage. A later review by Handler (1994) confirmed that process models dominated early succession research. Le Breton-Miller et al. (2004) built on that work to propose an integrative model in which succession unfolds through stages of ground rules, nurturing and development of successors, selection, and handover, all shaped by the family, the firm and the industry. Together these sources establish that the successor's experience unfolds over years, often beginning in childhood, which means a study of that experience must ask about the whole course of the transition rather than a moment of handover.

The Successor's Attributes and Commitment

A second body of work asks what makes a successor suitable and willing. Chrisman et al. (1998) surveyed respondents from 485 Canadian family firms and found that integrity and commitment to the business were rated as the most important attributes of a successor, while birth order and gender were rated least important despite the attention the literature had given them. In a questionnaire study of 332 owner-managers and successors from South African small and medium-sized family firms, Venter et al. (2005) found that the successor's willingness to take over and the quality of the relationship between owner-manager and successor shaped satisfaction with the process, and that willingness, preparation and that relationship influenced the firm's continued profitability.

Commitment itself proves to be complex. Sharma and Irving (2005) proposed that successors may be committed to the family firm for four different reasons: affective commitment, based on a genuine desire to lead; normative commitment, based on a sense of obligation; calculative commitment, based on the perceived costs of leaving; and imperative commitment, based on a sense that the successor has no alternative. Their model predicts that these bases lead to different behavior, with desire-based commitment associated with discretionary effort that obligation or need may not produce. A successor who takes over out of obligation and one who takes over out of desire may hold the same title and live in different worlds. The model is conceptual, however, and offers propositions rather than tested findings. How successors themselves describe their reasons, and how those reasons change over time, remains largely unexplored.

The Founder-Successor Relationship

Nearly every stream of research points to the relationship between founder and successor as decisive. Venter et al. (2005) found it among the strongest influences on both satisfaction and profitability. Handler (1990) showed that the relationship must change as roles shift, and that founders' reluctance to let go is a common point of failure. De Massis et al. (2008), reviewing the literature on factors that prevent intra-family succession, grouped obstacles into individual, relational, financial, contextual and process factors, and placed conflicts and lack of trust between generations among the relational ones. Dumas (1989), in an early qualitative study of father-daughter and father-son dyads, found that daughters often entered family firms without being seen as successors and had to negotiate their roles differently from sons. The relational theme is the one where qualitative work has contributed most, yet much of it is now decades old and concerns firms in an earlier economy.

Knowledge Transfer Between Generations

A fourth theme concerns knowledge. Cabrera-Suárez et al. (2001) applied the resource-based and knowledge-based views of the firm to succession and argued that a family firm's advantage often rests on tacit knowledge held by the founder, such as relationships with customers and suppliers or an intuitive grasp of the trade, which can be passed on only through long, close work together. That view explains why preparation matters and why it takes time. It also implies that successors experience part of succession as learning, a dimension that survey studies of satisfaction capture poorly. A successor may be satisfied with the outcome of succession while still describing years of frustration at learning the trade from a parent who could not explain what came to him by instinct, and only an account in the successor's own words would reveal that tension. Research on successor teams, in which siblings or cousins share leadership, extends the theme by showing how knowledge and authority are divided among several next-generation members (Cater et al., 2016).

Synthesis and Gap

Across these themes, the literature has built a strong account of succession as a long process shaped by the successor's commitment, the relationship between generations and the transfer of knowledge. Its methods, however, are uneven. The most cited findings come from surveys of attributes and satisfaction (Chrisman et al., 1998; Venter et al., 2005) and from conceptual models (Le Breton-Miller et al., 2004; Sharma & Irving, 2005), and the qualitative studies that captured successors' voices are older and few. Creswell and Poth (2018) note that qualitative research is suited to problems where the meanings people give to an experience need to be explored rather than measured. That describes the gap here. Little is known about how successors in small U.S. manufacturing firms describe what taking over means to them, how their commitment forms and changes, and how they experience the slow transfer of authority and knowledge from a parent.

Conclusion

The succession literature provides a framework for a qualitative study and identifies its gap. A study that listens to second-generation owners describe their experience could test whether the stages, commitments and relational dynamics proposed in the literature match how successors live them, and could reveal aspects of the experience that surveys and models have missed. The methods assignments that follow in this course will consider which qualitative approach, narrative, phenomenological, case study, grounded theory or ethnographic, would best answer that question.

References

Cabrera-Suárez, K., De Saá-Pérez, P., & García-Almeida, D. (2001). The succession process from a resource- and knowledge-based view of the family firm. Family Business Review, 14(1), 37-46. https://doi.org/10.1111/j.1741-6248.2001.00037.x

Cater, J. J., III, Kidwell, R. E., & Camp, K. M. (2016). Successor team dynamics in family firms. Family Business Review, 29(3), 301-326. https://doi.org/10.1177/0894486516656255

Chrisman, J. J., Chua, J. H., & Sharma, P. (1998). Important attributes of successors in family businesses: An exploratory study. Family Business Review, 11(1), 19-34. https://doi.org/10.1111/j.1741-6248.1998.00019.x

Creswell, J. W., & Poth, C. N. (2018). Qualitative inquiry and research design: Choosing among five approaches (4th ed.). SAGE Publications.

De Massis, A., Chua, J. H., & Chrisman, J. J. (2008). Factors preventing intra-family succession. Family Business Review, 21(2), 183-199. https://doi.org/10.1111/j.1741-6248.2008.00118.x

Dumas, C. (1989). Understanding of father-daughter and father-son dyads in family-owned businesses. Family Business Review, 2(1), 31-46. https://doi.org/10.1111/j.1741-6248.1989.00031.x

Handler, W. C. (1990). Succession in family firms: A mutual role adjustment between entrepreneur and next-generation family members. Entrepreneurship Theory and Practice, 15(1), 37-52. https://doi.org/10.1177/104225879001500105

Handler, W. C. (1994). Succession in family business: A review of the research. Family Business Review, 7(2), 133-157. https://doi.org/10.1111/j.1741-6248.1994.00133.x

Le Breton-Miller, I., Miller, D., & Steier, L. P. (2004). Toward an integrative model of effective FOB succession. Entrepreneurship Theory and Practice, 28(4), 305-328. https://doi.org/10.1111/j.1540-6520.2004.00047.x

Sharma, P., & Irving, P. G. (2005). Four bases of family business successor commitment: Antecedents and consequences. Entrepreneurship Theory and Practice, 29(1), 13-33. https://doi.org/10.1111/j.1540-6520.2005.00067.x

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. https://doi.org/10.1111/j.1741-6248.2005.00049.x