Lost in time: intergenerational succession, change, and failure in family business

Previous research has shown there is a high failure rate (70%) for successions in family owned businesses. Other researchers have suggested that the reasons why such successions fail are: unclear succession plans, incompetent or unprepared successors, and family rivalries. In this paper, poorly performing or failed family enterprises were tracked for several years to determine what happened. Sixteen intergenerational successions, which were followed by poor performance ending either in successor dismissal or bankruptcy, were studied. Findings indicated that intergenerational successions were often hampered by an inappropriate relationship between the past and the future. Specific problems identified include: excessive attachment to the past by an overly dependent and conservative successor, a rejection of the past by a rebellious one, or an incongruous blending of past and present by an unsure and wavering new leader. The fact that these patterns occur with such regularity suggests that they be studied further as syndromes that must be combated by a great many family owned businesses. (SFL)

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