- Category: Samples
In the context of the high failure rates of the transgenerational succession in family firms globally, it becomes very relevant to examine the reasons for this and the success factors needed in this regard. Since the transgenerational succession process varies across different national cultures, studies are needed separately in different cultural contexts in this regard. Given this, this study examines the transgenerational succession issues in the family run businesses in India and the required factors needed for the success of the transgenerational succession in the family run businesses in India.
After the discussion on the significance of the study, the second chapter critically reviews the theoretical and empirical studies related to the objectives. The review shows the importance of cultural variations playing a significant role in affecting the succession issues in family firms. The review shows the need for analyzing both incumbent and successor related factors that influence the success of transgenerationl succession in family firms. However, most of the existing studies are based on one or two case studies and are restricted to a particular cultural setting. The generalization of these findings can be problematic given the importance of cross-cultural variations in this regard. In the Indian context, the review shows that though the social culture giving the family firms unique advantages to strengthen the business unlike the other countries, the transgenerational succession problems are very high here. There is a lack of detailed studies in this regard and this study tries to fill this gap with the conceptual framework of Barbot et al (2004).
In the methodology chapter, the discussion shows that combination of positivism and interpretivism is the selected method here. The research tool is case study based on interviews with triangulation as the data analysis method. Secondary data based on existing studies is also used for the analysis. Purposive sampling is the sampling technique used in the study.
The results of the analysis shows that both the incumbent and the successor factors are influential in preventing the successful transgenerational succession process. The main factors preventing the transgenerational succession in the Indian cultural context can be classified based on the classification followed by Massis et al (2008) as individual factors, which include both incumbent and successor factors, relational factors, financial factors, environmental factors and process factors. The discussion shows that the cultural context within which the family firms are put in plays a very important role in affecting the success of transgenerational process in these firms.
The next section discusses the recommendations based on the findings in the study.
The successor needs to be trained and prepared well for increasing the motivation and willingness to enter the business. This also increases the confidence of the family members about the ability of the successor and they will be willing to trust his decisions. The relationship quality between the incumbent and the successor plays a main role in affecting the success of the succession process, which depends on the cultural context. Thus, the successor needs to be given significant autonomy in decision making by the incumbent for the successful succession. There needs to be clear boundaries between family and business interests. Though family members are needed to ensure continuity among the business, by putting the non family members in the top management can help in avoiding internal conflicts significantly. However, there should not be interference in the decision making process of these members from the side of family members . The competence of the successor is an essential factor in determining the success of the succession process, which again can be improved by the appropriate training process. There needs to be clear succession planning and clearly defined roles for the incumbents and the successors to ensure the success of the succession process in the Indian family firms.
The next section discusses the scope for future research in this regard.
4.3. Scope for Future Research
The study can be extended based on time use survey with the managers of different family businesses and the other members involved in the businesses in the Indian context. This can be compared for the family businesses in different sectors in the Indian context. This can provide more valuable insights regarding the transgenerational succession process in the Indian family firms. Another fruitful area of research is the examination of the quality of relationships between the incumbent and the successor in different cultural contexts and how they affect the succession process in a detailed manner. The effects of leaving the top management to the external professionals can also be examined in detail for understanding the effectiveness of family versusnon family leadership in the family businesses in the Indian context. All these can provide valuable insights regarding the transgenerational succession process in the Indian family business firms and the success factors required in this regard.