Transition in the Family Business Generation to Generation
Succession planning in the family business is an issue of growing importance. This activity generates a significant proportion of the economy in many countries, whereby the enterprises are approaching the point where business owners’ are making serious decisions regarding their long term future, this decision impacts, individual businesses, business sector, and the whole society. This move results in widespread interest in various business succession planning.
Though this business operates within personal relationships which affect and influence the business concern. When these relationships are central to the operations of the business, then there must be a focus upon the relationship in a successful negotiation of a business transition process.
It is not normally easy to have a successful family business transition since there are many problems associated with this generation to generation transition. This family business includes relationship involving individuals and those involving the business itself. The individual relationship has an impact on transition whereby, the quality of the relationship is vital, whether they are involved directly or indirectly.
Most problems occur in these individual relationships where we find the small generation has no desire to take over the family business, this may not be the only case of failure, there are more influences leading to the failure of the generation to generation re is also a psychological factor under which the perception of the key family stakeholders especially those of the highest generation and the lower generation has a crucial influence considering their roles, intentions, and attitudes of others within the transition process.
Therefore when the low generation is not psychologically prepared to take control over the transition then this makes this process unsuccessful and also when the transition process is not successful then the successor is not psychologically ready to prosper. This makes the incumbents and the successor’s mental status very important in judging when the transition should be taken and what requirements are needed for the process to be successful. . .
Also, family values influence the business heavily, whereby there happens to be a higher risk for poor long term business performance, this normally occurs when the subject of the business relies on the family needs. Under this case of psychology we find that during the transition process, the psychological process results in conflicts between individuals, that is between the incumbent and the successor, there is, therefore, a contradiction arising at the succession, whereby, the successor desires to imitate the incumbent in order to supersede him while seeking independence, this causes an internal conflict for the successor on how to behave, in such a situation, both the incumbent and the successor desire to be a leader thus reinforcing a leader role causing a spiral of conflicts, confusion, and confrontation. . .