Exploring succession planning in small, growing firms

Abstract

Purpose

The paper aims to explore some of the issues in voluntary succession associated with finding and successfully developing principal successors to ensure the survival and growth of small firms. It highlights the key issues identified, including recruiting employees with potential, considering the work/career motives of potential successors and ways of transferring organisational and personal/tacit knowledge from the owner‐manager to the successor, whether an internal employee or a new purchaser. An initial, simple model is presented, identifying three types of knowledge transfer and two tiers of succession.

Design/methodology/approach

Literature from entrepreneurship, organisation studies and human resourcing highlights the issues associated with succession planning. Qualitative research provides empirical data from four owner‐managers and employees.

Findings

Insight into the reasons why it is difficult to plan voluntary succession are provided.

Research limitations/implications

A recognised limitation of this research is the small sample size. Further research is required to explore whether these issues – and the proposed model – are indeed relevant across other small firms, and whether there are any differences in succession planning between growth and non‐growth oriented firms, and between family and non‐family firms.

Practical implications

The model can be used to analyse succession planning issues and develop successors.

Originality/value

The paper offers new insights into succession planning and the model provides a framework for developing successors.

Citation

Sambrook, S. (2005), "Exploring succession planning in small, growing firms", Journal of Small Business and Enterprise Development, Vol. 12 No. 4, pp. 579-594. https://doi.org/10.1108/14626000510628243