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1 – 10 of over 12000Phuong-Dung Thi Nguyen and Cheng-Yu Lee
Corporate governance scholars have long been interested in understanding the impact of former chief executive officers (CEOs) who do not fully leave office but rather remain as…
Abstract
Purpose
Corporate governance scholars have long been interested in understanding the impact of former chief executive officers (CEOs) who do not fully leave office but rather remain as board members. Departing from the inconclusive findings of retaining Janus-faced predecessor CEOs on boards, this study revisits the concept of retaining predecessor CEOs on boards (RPCB) and its influence on successors and firm performance under certain conditions.
Design/methodology/approach
The study analyzes a sample of 461 Taiwanese firms from 2015 to 2019, adopting the ordinary least squares regression method to examine the correlation between RPCB and firm performance. It specifically analyzes the moderating effects of the complexity of firms' internal and external environments in this context.
Findings
The empirical results show that there is no direct relationship between RPCB and post-succession performance, indicating that this association is shaped by contextual factors. Indeed, the influence of predecessors is more pronounced in situations of high internal and external complexities such that the value of RPCB is situation specific.
Originality/value
This study is the first to generate the resource-based view theory to recognize that the relationship between predecessors on boards and financial consequences is moderated by contextual factors. The authors are the first to extend extant research by considering internal and external complexity in the context of succession and RPCB. In such situations, successors' need for regular mentoring is heightened and the benefits of prior CEO knowledge and resources are more substantial.
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Hossein Samei and Alireza Feyzbakhsh
Previous research indicates that a high percentage of family firms are not able to transfer to the next generation. This is, for the most part, due to poor succession. In this…
Abstract
Purpose
Previous research indicates that a high percentage of family firms are not able to transfer to the next generation. This is, for the most part, due to poor succession. In this regard, the competency of the predecessor in nurturing a competent successor is a central issue. The purpose of this paper is to identify the predecessor competencies required to nurture a successor.
Design/methodology/approach
The research applied a qualitative research methodology with a case study approach, whereby five large Iranian family firms which have maintained superior performance across generations were studied.
Findings
The findings indicated that predecessor competencies required for successor nurturing are open-mindedness, risk-taking, patience, explicitness, motivation, trustworthiness, communicative skills, and value orientation. Cross-case analysis also revealed that successor attributes and family attributes influence the importance of the predecessor’s competencies.
Originality/value
The literature suggests a number of attributes that predecessors require for nurturing the successor in family firms. However, previous studies have proven to be weak in doing a systematic study, from a competency-based approach, to find the required predecessor competencies based on the methods used to nurture the successor. Therefore, this research would be helpful in explaining the predecessor’s required competencies for nurturing the successor.
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Aprihatiningrum Hidayati, Aji Hermawan, Agus W. Soehadi and Hartoyo
The purpose of this study is to shed some light on an important phenomenon – how and why intra-family succession may change if millennial cohorts are considered as successors…
Abstract
Purpose
The purpose of this study is to shed some light on an important phenomenon – how and why intra-family succession may change if millennial cohorts are considered as successors. Specifically, it aims to explore the superordinate themes that support the success of intra-family succession from perspective of two different cohort successors (X and millennial).
Design/methodology/approach
An interpretative phenomenological analysis (IPA) was adopted for detailed structural analysis of in-depth interview as it aims to explore meaning of participants' experiences. A total of ten individuals participated in the study.
Findings
Seventeen superordinate themes emerged from participants' personal statements and experiences. The themes are grouped into four aspects: namely, characteristics of predecessor and successor, succession process, firm and family and succession output. These aspects were found to be different between X and millennial cohort successors. They then form an empirical model of intra-family succession from both perspectives.
Research limitations/implications
This study enriches the theory of family firm by considering generational effect of successors on intra-family succession.
Practical implications
As millennial cohort successors prefer to go directly into business (experiential learning) and are driven by non-material motives (passion-driven), predecessors are expected to utilize them in the process of nurturing and development.
Originality/value
This study considers the role of generation cohort in supporting the success of intra-family succession especially in relation to the characteristics of millennial cohort successors that have been shown to differ from that of X cohort.
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The purpose of this paper is to provide a model that can explain how organizations may retain their executives’ tacit knowledge in the organization especially during the…
Abstract
Purpose
The purpose of this paper is to provide a model that can explain how organizations may retain their executives’ tacit knowledge in the organization especially during the succession period. The proposed model takes into consideration three critical contexts that may assist in improving the knowledge flow during the transition period, namely, motivation context, transition context and ability context.
Design/methodology/approach
This paper presents a conceptual framework that emphasizes the importance of the will and skill of two parties involved in succession, i.e. the predecessor and successor, as well as the context of the succession. To this end, the paper advances a set of propositions that explain how these different contexts affect the quantity and quality of the knowledge acquired by the successor at the end of the succession period.
Findings
This paper advances a theoretical model that describes the antecedents and moderator of job-specific knowledge acquired during executive succession.
Research limitations/implications
This paper presents a theoretical model that explains knowledge flow during the transitory period of succession. It emphasizes the importance of the motivation and ability of the partners involved while taking into consideration the context of succession.
Practical implications
This paper contributes considerably and in a practical manner to managers in general and to human resource managers in particular. It draws the attention of concerned managers to check the motivation of both successor and predecessor in experiencing the transition, explain to the successors the job description of the position to direct their attention to learn specific knowledge and equip both parties involved in the succession with the needed skills.
Originality/value
This paper advances a new concept termed as accelerated engaged tacit knowledge acquisition. This concept complements other perspectives of knowledge flow and learning and takes into consideration the specific context of executive succession.
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Zeshan Ahmad, Shahbaz Sharif, Muhammad Ahmad Alrashid and Muhammad Nadeem
The purpose of this study is to investigate how the congruence between predecessor and successor personality traits (PTs) with the values of their small family business (SFB…
Abstract
Purpose
The purpose of this study is to investigate how the congruence between predecessor and successor personality traits (PTs) with the values of their small family business (SFB) contributes to a successful succession transition across generations.
Design/methodology/approach
The conceptual model method was employed in this investigation, which describes an entity and identifies issues that should be considered in a study (MacInnis, 2011). It involves a form of theorizing that seeks to create a nomological network around the focal concept, to examine and detail the causal linkages and mechanisms at play (Delbridge and Fiss, 2013).
Findings
Drawing on the trait activation theory (TAT), this study conceptualizes that the congruence of the successor's PTs with those of the predecessor, as well as the values, transitions and nature of the assigned task, activates the successor's PTs and motivates him to work diligently for a successful succession transition while preserving the business's core values established by the founder.
Research limitations/implications
This study is an eye-opener for strategists and SFB predecessors to ponder the successor's PTs disparities across generations. Additionally, it urges them to consider the congruence of SFB's values and nature of operations with the successor's PTs for successful succession transition. Thus, such awareness may contribute to stabilizing the SFB's survival rate.
Originality/value
This study contributed to the existing literature by answering how predecessor’s and successor's PTs congruence and SFB's values and nature of operations congruence with their PTs may contribute to successful succession transition across generations. This study contributed to the TAT by thematically explaining the organizational cues to bridge a relationship between entrepreneurial personality traits (EPT) and succession success of SFBs.
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Nyayu Lathifah Tirdasari and Wawan Dhewanto
Succession timing plays a key role in the part of the succession process. While much notice has been given solely to the viewpoint of predecessor and successor, less known about…
Abstract
Purpose
Succession timing plays a key role in the part of the succession process. While much notice has been given solely to the viewpoint of predecessor and successor, less known about the schedule during this most critical family business dealings. The purpose of this research is to assess the right time for predecessors to let go of their leadership and allow the successor to take charge of the family business. Notably, it considers how the process of interaction between predecessor and successor may encourage successor capability, succeed the family business and following implications for the succession process as well.
Design/methodology/approach
An exploratory comparative case study design employed in order to disclose the time by time activities around the succession process. This study presented circa 11 case studies from family businesses of the food industry. Data gathered utilizing semi-structured interviews and formal secondary data from the organizations, all of whom operate in Java, Indonesia.
Findings
Findings reveal five critical outcomes. First, the results show that most of the respondents had no written succession plan and did not keep up the developmental stages, but the succession process was successful. Second, the study found a reduced age of successor even though the stages increase. Third, the respondents did not know when was the predecessor is getting busy managing the business, and some successors did not attend college as well. Fourth, the succession process of RC is the fastest and TY is the longest. Last, the succession process of the second-generation family business is faster than the third-generation.
Originality/value
This paper presents further evidence of the succession process of family businesses. It moves beyond a timing explanation of succession to develop a more sequentially aware understanding of the agility within the succession process. It contributes to the limited references of the family business in the food industry in Indonesia as well.
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The purpose of this paper is to examine the potential effect of busy season resource constraints on the selection of a new auditor, conditioned upon the status of the prior…
Abstract
Purpose
The purpose of this paper is to examine the potential effect of busy season resource constraints on the selection of a new auditor, conditioned upon the status of the prior auditor.
Design/methodology/approach
The paper employs multivariate logistic regressions for a sample of firms that changed auditors between 1979 and 2005 to explore the empirical correlations between having a December fiscal year-end (FYE) and non-lateral switches.
Findings
The paper finds that non-BigN clients with December FYEs are less likely to switch to BigN auditors than those with non-December FYEs prior to the enactment of the Sarbanes-Oxley Act (SOX). This trend subsides after SOX. For firms with BigN predecessor auditors, fiscal year-end appears to have insignificant influence on auditor switching.
Research limitations/implications
The findings suggest that upwardly mobile clients face greater audit supply constraints compared to clients already being audited by a BigN firm during the traditional busy season. However, the curbing influence on switching upwards erodes after SOX.
Practical implications
This study is to show the impact of supplier capacity constraints on audit production and structural changes within the auditing profession.
Originality/value
The findings can further the understanding of the determinants of auditor-client realignment, given that the paper identifies and explores the effects of having a December FYE on subsequent auditor appointments, conditioned upon the status of the prior auditor.
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Devi Sulistyo Kalanjati, Damai Nasution, Karin Jonnergård and Soegeng Sutedjo
The purpose of this paper is to investigate the association between audit rotation – at the audit partner and audit firm level – and audit quality. As mentioned in the literature…
Abstract
Purpose
The purpose of this paper is to investigate the association between audit rotation – at the audit partner and audit firm level – and audit quality. As mentioned in the literature, audit rotation has several benefits, and one of them is it can bring a fresh look to audit tasks and subsequently improve audit quality. Moreover, audit itself can help a client to improve its financial reporting. However, ineffective communication between predecessor and successor audit partners or audit firms, and pseudo-rotation can hamper that benefit.
Design/methodology/approach
This study uses multivariate regression analysis to test its hypotheses. Using data from companies listed on the Indonesia Stock Exchange, the sample consists of 688 company-year observations covering the period 2003–2016.
Findings
This study finds that the cumulative number of audit partner rotations is positively associated with audit quality, indicating that rotations at the audit partner level will enhance audit quality. Conversely, it finds that the cumulative number of audit firm rotations is negatively associated with audit quality.
Practical implications
The study’s findings may assist regulators in crafting standards regarding audit rotation. As the findings show, audit partner rotation will improve audit quality, but the audit firm rotation will decrease audit quality. As this study tries to explain the decreasing audit quality from audit firm rotation could be a consequence of ineffective communication or pseudo audit firm rotation. Regulators should try to tackle these problems.
Originality/value
Instead of using tenure as a proxy for a rotation, this study creates a new proxy named the cumulative number of audit partner and audit firm rotations to provide evidence on the benefits of audit rotation.
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Xin Liu and Youzhi Xue
This paper aims to examine the effect of outside chief executive officer (CEO) succession on firm innovation in Chinese companies and to explore the mechanism behind the process…
Abstract
Purpose
This paper aims to examine the effect of outside chief executive officer (CEO) succession on firm innovation in Chinese companies and to explore the mechanism behind the process. By analyzing the motivation of CEO successors of different origins in the context of selection, this paper identifies the factors affecting outside CEO successors’ decision-making on post-succession firm innovation.
Design/methodology/approach
A Poisson regression model is used on a sample of 1,084 firm-year observations taken from Chinese listed companies that endured CEO succession during the period of 2009–2016. Fixed-effect Poisson regression modeling was performed after likelihood ratio and Hausman testing to assess the robustness of the findings.
Findings
The results show that outside CEO successions are significantly and negatively associated with post-succession firm innovation. Moreover, the authors found a negative effect of outside CEO succession on post-succession firm innovation when the predecessor has a long tenure or the successor is older.
Originality/value
.This study contributes to the literature on CEO succession, CEO–board relationships and firm innovation by shedding light on how agency, human capital and career-concerning theories in the CEO selection context apply to corporate governance and strategy. Moreover, by exploring the factors influencing CEO successors’ decision-making in terms of firm innovation in the Chinese social and cultural context, this paper identifies ways to promote firm innovation for Chinese companies from the concept of leadership succession.
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Matthias Filser, Sascha Kraus and Stefan Märk
Family firms appear to be an attractive topic in a number of research areas. Probably the most important topic is still the succession process combined with possible hurdles and…
Abstract
Purpose
Family firms appear to be an attractive topic in a number of research areas. Probably the most important topic is still the succession process combined with possible hurdles and gaps. This paper aims to focus on the special variable of the psychological dimension. It attempts to summarize findings and implications as well as suggestions for where potential research gaps are.
Design/methodology/approach
The paper is based on a two‐stage research design. The first step is a literature review. All articles published in the Family Business Review (FBR) between 1997 and 2011 were collected and analysed regarding their topics, findings, and implications. As a second step, this knowledge has been applied to conduct a thorough literature analysis on psychological aspects of succession.
Findings
Psychological aspects are often used together with other constructs. The authors strongly recommend handling them as an individualized, highly complex topic, even if social, political, and other aspects are often mixed with psychological aspects and therefore difficult to discuss and separate. A separation of these factors will help researchers present findings in a much clearer way.
Research limitations/implications
The main limitation of the article lies in the methodology itself, as the literature review solely concentrates on empirical papers that exclusively investigate psychological aspects with regard to succession. Nevertheless, the aim was to elaborate a focused psychological field model in terms of succession. Likewise, critical aspects considering the family business system have been taken into consideration. Finally, a literature review is commonly seen as a post‐work “dead body”. However, the implications show a clear, directed focus within family business research. The authors recommend an increase in the number of concisely formulated research questions instead of generic approaches.
Practical implications
Businesses should closely heed three imperative problem areas (individual, interpersonal and organizational) as well as the stage in which conflicts arise (preparation, transfer/takeover, and continuation), if they want to be successful in the succession process.
Originality/value
The paper offers an overview of the limited number of existing articles and their implications that address the psychological aspects of the succession process. Furthermore, the psychological issues identified that cause conflicts during succession are consolidated and categorized.
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