Commenced in January 2007
Frequency: Monthly
Edition: International
Paper Count: 72615
Role of Succession Planning to the Survival and Sustainability of Family-Owned Businesses for Economic Development

Authors: Angela Obose Oriazowanlan

Abstract:

The relevance of family-owned businesses (FOB) to families and national economic development is unquantifiable, but the high transience and moribund rate of most of the businesses is appalling. The study, therefore, investigated the role succession planning plays to promote the survival and continuity of family-owned businesses from one successive generation to another. It determined the possible approaches to be adopted to select a competent successor in order to avoid acrimony. Five research questions and two hypotheses guided the study. Family-owned businesses in Benin-City in the Edo State of Nigeria constituted the study population and 200 were selected as sample representatives using a simple random sampling technique. The descriptive survey research design was adopted and a 40-item structured questionnaire was used as an instrument for data gathering. The data were analyzed using descriptive statistics of mean and standard deviation and Z-Score to test the formulated hypotheses. The findings revealed, among others, that FOB is highly formidable for employment generation, poverty alleviation, the bridge income gap between the poor and the rich, develop and expanding local industries. It also revealed that a potential successor’s interest, competence, availability and capability are crucial to making a wise choice. It was recommended, among others, that FOB operators should adopt the best succession planning approach in order to identify, recruit and screen potential candidates to make a wise choice. In addition, the interest of the potential successor should be considered and be sufficiently groomed to ensure optimal performance. This would promote family harmony, economic growth and development.

Keywords: economic development, family-owned businesses, succession planning, survival, sustainability

Procedia PDF Downloads 13