Effective Management Succession Models in Larger Family Enterprises: Presentation of the Best Practices in the World

Summary

Abstract

Management succession appears to be a key success factor for the growth and development of family enterprises, which have to guarantee financial security for successive generations of the family. The aim of the article is to present succession models in larger family enterprises of global, multigenerational nature, recognised as effective units, developing on the basis of good, proven practices identified during consulting and research activities by such institutions as Cambridge Institute for Family Enterprise, FORBES, Spencer Stuart, Harvard Business School. The basic similarities of these proposals may be merged into a platform for creating one common model that will serve as a benchmark for individual, specific succession cases. The differences among the proposals may constitute a complementary added value for the model thus created. The degree of convergence of succession planning in a specific case of family enterprise with the presented model—the benchmark will allow to forecast the effectiveness and success of intergenerational transfer.

Keywords: family enterprises, succession, SME, succession models

Introduction

The topic of succession in family enterprises is the most popular in the scientific literature devoted to the functioning and management of these entities. This popularity results from the key importance of planning and implementing intergenerational management and ownership transfer for business growth and development over a long period of time, for generating and using intangible assets, the carrier of which is the owner family, in the process of building and increasing competitive advantage. Unfortunately, the succession of management is a complex, multi-stage, multidimensional process in the vast majority of cases resulting in failure. A share of 30% of family businesses make it through the second generation, 10–15% through the third, and 3–5% through the fourth. For natural and pragmatic reasons scientists, consultants and practitioners are looking for solutions, strategies or models that will increase the probability of success in this area and thus the probability of continuity of management, progress in the scope of growth, development and efficiency of family entities.

In his own search, the author has already presented the anthropological concept of family structure in order to explain the causes and potential sources of failures in planning and succession in family enterprises.