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1 – 2 of 2Lil Rodriguez Serna, Dorothea Maria Bowyer and Sheree K. Gregory
Although the use of management control systems (MCS) is known to support organizational strategic success, the role played by MCS to monitor stakeholder satisfaction, thus…
Abstract
Purpose
Although the use of management control systems (MCS) is known to support organizational strategic success, the role played by MCS to monitor stakeholder satisfaction, thus minimizing stakeholder relationship severance, during uncertain events such as business succession remains underexplored. Thus, the authors investigate why succession creates uncertainty and how can stakeholders' concerns assist in contingently adapt the family businesses (FB) MCS to assist decision-making during succession.
Design/methodology/approach
The authors use a qualitative approach and a multiple-case study design. The authors conducted 30 in-depth interviews within 6 Australian FB SMEs. Interviewees included owners, successors, senior managers, customers and suppliers.
Findings
The authors' findings suggest that owners' perceptions, that intergenerational succession causes minimal stakeholder disruption, results in MCS not adapting to monitor the uncertain event. Other stakeholders, on the contrary, highlight the need for MCSs to evolve and adapt during the process to assist owners monitor stakeholder-derived success factors to secure the long-term sustainability of the FB.
Originality/value
The novelty of this research is based on the inclusion of non-family stakeholders, such as customers and suppliers, as part of the sample. This approach allowed for stronger conclusions and a broader overview of the succession issue.
Details
Keywords
Lil Rodriguez Serna, Dilupa Nakandala and Dorothea Bowyer
Successors' unwillingness to participate in the family business is known to impede intergenerational succession. However, little is known about why those considered eligible, do…
Abstract
Purpose
Successors' unwillingness to participate in the family business is known to impede intergenerational succession. However, little is known about why those considered eligible, do not choose to become the next chief executive officer (CEO). The authors investigate why some eligible successors withdraw from the succession process while others remain involved. The purpose of this paper is to build theory for which the authors made use of purposive sampling techniques that complied with certain criteria.
Design/methodology/approach
The authors use an inductive, exploratory multi-case study design and investigate six Australian food manufacturers.
Findings
This paper's analysis reveals that successors' decisions are driven by dimensions: pursued outcome and reciprocity. Eligible successors withdrawing from succession are concerned about personal financial sustainability and the business' growth potential; this is accompanied by negative exchanges with the incumbent.
Research limitations/implications
The authors studied a limited number of organizations and these were mainly managed by owner/founders. In this type of organization, successors have been widely exposed to the business and its struggles from an early age. Differences can be present in businesses managed by later generations whose emotional investment, therefore, socio-emotional needs might be different from the cohort being investigated. Second, the authors' aim in carrying out this study was to build theory for which we made use of purposive sampling techniques that complied with certain criteria. Further studies aiming at generalizable results would shed light on the usefulness of the typology and whether other rules apply to the incumbent–successor relationship while ascertaining how the exchanges contribute to the successor's decision to remain or withdraw from the family business.
Practical implications
This study reveals the crucial nature of the incumbent in the succession process. Their role is not limited to how they interact with the successor but how deeply incumbents manage to understand and monitor the successor's motivations and concerns. Incumbents aiming at retaining eligible successors need to thoroughly understand successors' motivations for agreeing to become the next CEO.
Originality/value
This paper is one of the first to investigate successor withdrawal post training. The authors' methodology includes the responses of non-family senior managers to provide an objective view on the family dynamics.
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