The influence of family business resources on transgenerational success: a family business case study

Family businesses are major contributors to the economies of most countries and are known to be one of the best performing, most prevalent and resilient forms of business throughout the world. Despite their importance and based on the vast amount of research done in the field of family businesses, this form of business appears to be laden with challenges and is short-lived. Amongst others, one of the most fundamental challenges and contributors to the short-lived nature, and thus high failure rate of family businesses is poor succession planning. In order to address this challenge, the Successful Transgenerational Entrepreneurship Practices (STEP) research framework was developed to ascertain the factors that contribute to entrepreneurial performance and the effective transgenerational potential and success of family businesses globally. Transgenerational potential, entrepreneurial performance, the external mediating factors influencing family businesses, Entrepreneurial Orientation (EO) and the Resource Based View (RBV) of familiness resource pools are the components that make up the STEP research framework. By adopting the STEP research framework, the primary objective of this study is to establish how a transgenerational family business creates new economic activity over time by using and transferring familiness resource pools from one generation to the next. Due to the primary focus of the study being to research familiness resource pools and how they generate transgenerational potential for family businesses, this component of the STEP research framework is investigated in detail. The literature review therefore highlights the eight dimensions of familiness resource pools, namely: leadership, networks, capital, decision-making, culture, relationships, governance and knowledge, and are the main focus of this study. An interpretivism research paradigm is selected for this study. Interpretivism paradigms are associated with qualitative research methodologies. Owing to the fact that much still remains to be discovered in terms of familiness and familiness resource pools, a descriptive, single-case study is the type of research method undertaken. The sample is identified based on non-probability purposive sampling as per the strict guidelines of the STEP project. The sample size in this study consisted of one family business operating in the Eastern Cape, South Africa. The STEP interview schedule, which consists of semi-structured questions, is the research instrument used to collect the necessary data from five participants involved in the family business (a prominent motorcar dealership). Once all the data is collected, a combination of directed content analysis and explanation building are used to analyse the data. The findings of the study reveal that the leadership values present in the family business stem from that of the founder. Contrary to the current CEO’s beliefs that the family business investigated operates primarily under his participative leadership style, the interviews reveal that while the CEO does demonstrate participative leadership, his leadership style is somewhat autocratic in nature. This autocratic leadership style has caused the employees and the business as a whole, to become too reliant on the CEO, especially in terms of strategic decision-making, which may be a threat to the future succession of the business. The CEO’s expert leadership however, ensures that the business adheres to strict guidelines in terms of employing the best person for the job, regardless of whether the candidates are family members or not. As such, the prominent motorcar dealership is marketed as a family business and together under the family leadership, has helped attract customers and well qualified non-family employees to the business. While there is ample leadership available within the business, the lack of succession planning is reiterated to be a major threat facing the future of the business. Almost all of the original networks established by the founder in the prominent motorcar dealership studied still exist in the business in 2014. It is established that employees, especially those in the third generation, are encouraged to build their own networks within their relevant spheres of responsibility. Moreover, the business family’s history, reputation and goodwill have helped create and establish networks for the family business, especially within the Eastern Cape. These networks have helped the business drive sales and have contributed to the success of the business