Understanding succession processes in family businesses, case studies in the German Mittelstand

This thesis highlights the importance of understanding succession processes within family businesses. It examines how and why family members influence the succession process, using case studies of family businesses in the German Mittelstand. These are important questions,yet most previous research on family business succession has focused on the current CEO and the immediate successor, paying little attention to the wider family. The findings of this study show the diverse perspectives of family members, highlighting the maternal role in the succession process. This study opens up a new perspective about how much family needs and desires influence the succession process in family businesses, and vice versa. The cases reveal that strategic decision making within family businesses does not take place at the office but at home in private, and that family members, regardless of their formal status with the business, have a certain influence. The thesis adds value to our empirical and practical knowledge of family businesses and their dynamics. It clearly demonstrates that family businesses do not follow strict strategies but are flexible and fast in adapting to new circumstances and challenges. Previous research has largely neglected the role of wider internal and external stakeholders during the succession process, and has also failed to address the important question of successor motivations. To date, studies have focused solely on financial motivators or the absence of adequate alternatives as the main reasons why the younger generation engages in the family business. The results of this thesis provide a more nuanced understanding of successor commitment and motivations for taking on the emotional challenge of managing the family firm. To further enhance our understanding of how and why family members influence the succession process in the family business, this thesis draws on the Strategy as Practice approach. This perspective captures a more accurate picture of real-life succession processes by taking into account the interests and behaviour of directly and indirectly involved family members. In contrast to other approaches, the Strategy as Practice approach captures real-life decision making in everyday business and was chosen to theoretically underpin and guide the empirical work of this thesis, which consists of five case studies conducted in the German Mittelstand in the period from 2011 to 2014. Key words: Family business, succession, transition, incumbent, predecessor, holistic family approach, nepotism, emotional hazard, legitimation, Strategy as Practice.This thesis highlights the importance of understanding succession processes within family businesses. It examines how and why family members influence the succession process, using case studies of family businesses in the German Mittelstand. These are important questions,yet most previous research on family business succession has focused on the current CEO and the immediate successor, paying little attention to the wider family. The findings of this study show the diverse perspectives of family members, highlighting the maternal role in the succession process. This study opens up a new perspective about how much family needs and desires influence the succession process in family businesses, and vice versa. The cases reveal that strategic decision making within family businesses does not take place at the office but at home in private, and that family members, regardless of their formal status with the business, have a certain influence. The thesis adds value to our empirical and practical knowledge of family businesses and their dynamics. It clearly demonstrates that family businesses do not follow strict strategies but are flexible and fast in adapting to new circumstances and challenges. Previous research has largely neglected the role of wider internal and external stakeholders during the succession process, and has also failed to address the important question of successor motivations. To date, studies have focused solely on financial motivators or the absence of adequate alternatives as the main reasons why the younger generation engages in the family business. The results of this thesis provide a more nuanced understanding of successor commitment and motivations for taking on the emotional challenge of managing the family firm. To further enhance our understanding of how and why family members influence the succession process in the family business, this thesis draws on the Strategy as Practice approach. This perspective captures a more accurate picture of real-life succession processes by taking into account the interests and behaviour of directly and indirectly involved family members. In contrast to other approaches, the Strategy as Practice approach captures real-life decision making in everyday business and was chosen to theoretically underpin and guide the empirical work of this thesis, which consists of five case studies conducted in the German Mittelstand in the period from 2011 to 2014. Key words: Family business, succession, transition, incumbent, predecessor, holistic family approach, nepotism, emotional hazard, legitimation, Strategy as Practice