Succession Planning Strategies Within Family Firms

Approximately 70% of second-generation family firm successors are likely to close the family firm post succession due to succession process-related issues. Predecessors and family business owners need to understand the impact the succession process has on the family firm’s socioemotional wealth, family legacy, and longevity. Grounded in the social exchange theory, the purpose of this qualitative multiple case study was to explore succession strategies predecessors in family firms employ for the succession planning process. The participants were six family members from three family firms, including the successor for each family firm, who used succession planning strategies. Data were collected from semistructured interviews, archival records, and documents and analyzed with thematic data analysis. Five themes emerged: predecessor planning, family relationships, knowledge transfer, successor willingness, and authority and ownership. A key recommendation is for predecessors to prepare their successors by establishing a formal knowledge transfer with qualified external and internal human resources. The implications for positive social change include the potential to increase local governments\u27 revenues and for philanthropic organizations to sustain or increase the support from the family firm leaders