The purpose of this paper is to broaden the understanding of family business succession as organizational knowledge creation process.
The paper is built on organizational knowledge creation theory and reviews literature on family business succession. Four modes of knowledge conversion are followed to identify knowledge creation activities contributing to family business's knowledge base and to develop propositions.
Successful realization of succession depends not only on “traditional” knowledge creation activities of socialization and internalization, but as well as on active involvement of successor(s) in many aspects of business functioning. This contributes not only to widening successor(s) knowledge base but as well as to the firm's tacit and explicit knowledge triggering a new spiral of knowledge.
The paper limits the research on leadership succession as one of the most challenging tasks in family business's life cycle. Moreover, research findings have implications for small- and medium-sized family businesses due to the strong preference of keeping the leadership within a family.
Propositions developed provide useful cognitions to professionals and stakeholders involved in succession process. If they understand the complexity of knowledge creation process, they can stand a better chance of improving the process of successor(s)’ development and leadership transfer in such a way that family business will have better chance to survive and progress after the transition.
The research provides a comprehensive framework of knowledge creation activities during succession thus indicating the requisitely holistic approach to succession from organizational knowledge creation perspective. The study contributes to the organizational knowledge creation theory and the succession theory.
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