An examination of succession planning approaches in family owned businesses : a case study of two businesses in East London, South Africa
- Authors: Govender, Rowan
- Date: 2011
- Subjects: Family-owned business enterprises -- Succession -- South Africa , Family-owned business enterprises -- South Africa -- Management , Family corporations -- Management
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: vital:8589 , http://hdl.handle.net/10948/1621 , Family-owned business enterprises -- Succession -- South Africa , Family-owned business enterprises -- South Africa -- Management , Family corporations -- Management
- Description: Family businesses constitute a large number of businesses worldwide contributing significantly to the global economy. Succession planning is a key issue influencing the sustainability of these family businesses. According to research, approximately 30% of businesses fail due to matters related to succession planning (Grote, 2003). Further research indicated that approximately 50% of family businesses do not have adequate succession plans in place. Hence, family businesses are exposed to significant risk in sustainability due to insufficient succession planning. An effective approach to succession planning in a family business increases the chance of success of a family business in both the short and long term. The purpose of this study was to develop a better understanding of approaches to succession planning in two family businesses in East London, South Africa. This purpose was to improve the commercial viability of family businesses and improve the body of knowledge from an academic perspective. To this end, a detailed literature study was conducted on family businesses and succession planning. A qualitative case study research paradigm was implemented to ascertain the nature of the approaches adopted by the two businesses. An interview process was conducted with the incumbent founders (fathers) and successors (sons) of the family business. This process suggested that each business requires a unique approach to succession plan which may include aspects of formal and informal processes. It is necessary to understand the nature of the family business, its interrelated relationships and context to adequately determine the success of a succession approach. It is for this reason that families aspiring long term sustainability should invest in effective succession planning approaches that integrate the nuances of the individual family business.
- Full Text:
- Date Issued: 2011
- Authors: Govender, Rowan
- Date: 2011
- Subjects: Family-owned business enterprises -- Succession -- South Africa , Family-owned business enterprises -- South Africa -- Management , Family corporations -- Management
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: vital:8589 , http://hdl.handle.net/10948/1621 , Family-owned business enterprises -- Succession -- South Africa , Family-owned business enterprises -- South Africa -- Management , Family corporations -- Management
- Description: Family businesses constitute a large number of businesses worldwide contributing significantly to the global economy. Succession planning is a key issue influencing the sustainability of these family businesses. According to research, approximately 30% of businesses fail due to matters related to succession planning (Grote, 2003). Further research indicated that approximately 50% of family businesses do not have adequate succession plans in place. Hence, family businesses are exposed to significant risk in sustainability due to insufficient succession planning. An effective approach to succession planning in a family business increases the chance of success of a family business in both the short and long term. The purpose of this study was to develop a better understanding of approaches to succession planning in two family businesses in East London, South Africa. This purpose was to improve the commercial viability of family businesses and improve the body of knowledge from an academic perspective. To this end, a detailed literature study was conducted on family businesses and succession planning. A qualitative case study research paradigm was implemented to ascertain the nature of the approaches adopted by the two businesses. An interview process was conducted with the incumbent founders (fathers) and successors (sons) of the family business. This process suggested that each business requires a unique approach to succession plan which may include aspects of formal and informal processes. It is necessary to understand the nature of the family business, its interrelated relationships and context to adequately determine the success of a succession approach. It is for this reason that families aspiring long term sustainability should invest in effective succession planning approaches that integrate the nuances of the individual family business.
- Full Text:
- Date Issued: 2011
Sibling partnerships in South African small and medium-sized family businesses
- Authors: Farrington, Shelley Maeva
- Date: 2009
- Subjects: Family-owned business enterprises -- South Africa -- Management , Family corporations -- South Africa -- Management , Families -- Economic aspects -- South Africa , Small business -- Management -- South Africa , Family-owned business enterprises -- Succession -- South Africa
- Language: English
- Type: Thesis , Doctoral , DCom
- Identifier: vital:9289 , http://hdl.handle.net/10948/952 , Family-owned business enterprises -- South Africa -- Management , Family corporations -- South Africa -- Management , Families -- Economic aspects -- South Africa , Small business -- Management -- South Africa , Family-owned business enterprises -- Succession -- South Africa
- Description: Given the predicted increase in the number of family businesses owned and/or managed by siblings (Sibling Partnerships), as well as the lack of understanding and research attention given to such sibling teams, the purpose of this study was to contribute to the more effective functioning of such family businesses in South Africa by identifying the factors that impact on their success. With this purpose in mind, the primary objective was to identify, investigate and empirically test the possible influences of, and relationships between, various factors and the Perceived success of Sibling Partnerships. This study sets out to integrate prior findings and theories on team effectiveness and family relationships, to find support for these theories in the family business literature, and to incorporate these findings into a comprehensive model. The literature study revealed 5 main categories (context, composition, structure, processes, and people) of constructs influencing the Perceived success of sibling teams. Within these 5 main constructs, 13 underlying independent variables were identified and hypothesised to influence measures of effectiveness of sibling teams, namely the dependent variable Perceived success, and the 2 intermediate variables Financial performance and Family harmony. Of the 13 underlying independent variables, 6 were categorised as task-based and 7 as relational-based factors. In addition, hypotheses were formulated for possible relationships between the various task-based constructs (context, composition and structure) and the processes and people constructs. Each construct was clearly defined and then operationalised. Operationalisation was done by using reliable and valid items sourced from tested measuring instruments used in previous studies, as well as several self-generated items based on secondary sources. A structured questionnaire was made available to respondents identified by means of the convenience snowball sampling technique, and the data collected from 371 usable questionnaires was subjected to various statistical analyses. An exploratory factor analysis was conducted, and Cronbach-alpha coefficients were calculated to confirm the validity and reliability of the measuring instrument. The 6 task-based latent variables were confirmed by the exploratory factor analysis. However, all the other latent variables, as originally intended in the theoretical model, could not be confirmed. Instead, 3 dependent variables were identified, namely Financial performance, Growth performance and Satisfaction with work and family relationships, and 6 relational-based constructs, with some changes, did emerge. Structural Equation Modelling (SEM) was the main statistical procedure used to test the significance of the relationships hypothesised between the various independent and dependent variables. Because of sample size restrictions the conceptual model could not be subjected to SEM as a whole; consequently 10 submodels were identified and subjected to further analysis. The following independent variables were identified as influencing the dependent variables in this study: • Internal context • Complementary skills • Leadership • Shared dream • Fairness • Sibling relationship • Non-family members • No other family members (spouses and non-active siblings) In addition, the factors Complementary skills, Leadership, Past parent involvement, No present parent involvement, and No other family members, were identified as significantly influencing the relationship between the siblings involved in the Sibling Partnership. Furthermore, an Analysis of Variance (ANOVA), Multiple Linear Regression analysis and t-tests were undertaken to determine the influence of demographic variables on the dependent variables. How ownership is shared in a family business involving siblings, the shareholding between the siblings themselves, and the nature of leadership between the siblings, has been found to influence the iv dependent variables in the present study. In addition, a Sibling Partnership is likely to perform most effectively when it is composed of a relatively young sibling team that has a small age gap between the members, and business performance will improve as the siblings gain work experience together, and as the number of employees increase. This study has added to the empirical body of family business research by investigating a particularly limited segment of the literature, namely Sibling Partnerships in family businesses. By identifying and developing various models that outline the most significant factors that influence the success of such family business partnerships, this study offers recommendations and suggestions for managing family businesses involving siblings, in such a way as to enrich their family relationships and to improve the financial performance of their businesses.
- Full Text:
- Date Issued: 2009
- Authors: Farrington, Shelley Maeva
- Date: 2009
- Subjects: Family-owned business enterprises -- South Africa -- Management , Family corporations -- South Africa -- Management , Families -- Economic aspects -- South Africa , Small business -- Management -- South Africa , Family-owned business enterprises -- Succession -- South Africa
- Language: English
- Type: Thesis , Doctoral , DCom
- Identifier: vital:9289 , http://hdl.handle.net/10948/952 , Family-owned business enterprises -- South Africa -- Management , Family corporations -- South Africa -- Management , Families -- Economic aspects -- South Africa , Small business -- Management -- South Africa , Family-owned business enterprises -- Succession -- South Africa
- Description: Given the predicted increase in the number of family businesses owned and/or managed by siblings (Sibling Partnerships), as well as the lack of understanding and research attention given to such sibling teams, the purpose of this study was to contribute to the more effective functioning of such family businesses in South Africa by identifying the factors that impact on their success. With this purpose in mind, the primary objective was to identify, investigate and empirically test the possible influences of, and relationships between, various factors and the Perceived success of Sibling Partnerships. This study sets out to integrate prior findings and theories on team effectiveness and family relationships, to find support for these theories in the family business literature, and to incorporate these findings into a comprehensive model. The literature study revealed 5 main categories (context, composition, structure, processes, and people) of constructs influencing the Perceived success of sibling teams. Within these 5 main constructs, 13 underlying independent variables were identified and hypothesised to influence measures of effectiveness of sibling teams, namely the dependent variable Perceived success, and the 2 intermediate variables Financial performance and Family harmony. Of the 13 underlying independent variables, 6 were categorised as task-based and 7 as relational-based factors. In addition, hypotheses were formulated for possible relationships between the various task-based constructs (context, composition and structure) and the processes and people constructs. Each construct was clearly defined and then operationalised. Operationalisation was done by using reliable and valid items sourced from tested measuring instruments used in previous studies, as well as several self-generated items based on secondary sources. A structured questionnaire was made available to respondents identified by means of the convenience snowball sampling technique, and the data collected from 371 usable questionnaires was subjected to various statistical analyses. An exploratory factor analysis was conducted, and Cronbach-alpha coefficients were calculated to confirm the validity and reliability of the measuring instrument. The 6 task-based latent variables were confirmed by the exploratory factor analysis. However, all the other latent variables, as originally intended in the theoretical model, could not be confirmed. Instead, 3 dependent variables were identified, namely Financial performance, Growth performance and Satisfaction with work and family relationships, and 6 relational-based constructs, with some changes, did emerge. Structural Equation Modelling (SEM) was the main statistical procedure used to test the significance of the relationships hypothesised between the various independent and dependent variables. Because of sample size restrictions the conceptual model could not be subjected to SEM as a whole; consequently 10 submodels were identified and subjected to further analysis. The following independent variables were identified as influencing the dependent variables in this study: • Internal context • Complementary skills • Leadership • Shared dream • Fairness • Sibling relationship • Non-family members • No other family members (spouses and non-active siblings) In addition, the factors Complementary skills, Leadership, Past parent involvement, No present parent involvement, and No other family members, were identified as significantly influencing the relationship between the siblings involved in the Sibling Partnership. Furthermore, an Analysis of Variance (ANOVA), Multiple Linear Regression analysis and t-tests were undertaken to determine the influence of demographic variables on the dependent variables. How ownership is shared in a family business involving siblings, the shareholding between the siblings themselves, and the nature of leadership between the siblings, has been found to influence the iv dependent variables in the present study. In addition, a Sibling Partnership is likely to perform most effectively when it is composed of a relatively young sibling team that has a small age gap between the members, and business performance will improve as the siblings gain work experience together, and as the number of employees increase. This study has added to the empirical body of family business research by investigating a particularly limited segment of the literature, namely Sibling Partnerships in family businesses. By identifying and developing various models that outline the most significant factors that influence the success of such family business partnerships, this study offers recommendations and suggestions for managing family businesses involving siblings, in such a way as to enrich their family relationships and to improve the financial performance of their businesses.
- Full Text:
- Date Issued: 2009
A critical analysis of the impact of changing trends in legislation on the management of family businesses
- Authors: Tuck, Gaynaé
- Date: 2003
- Subjects: Family-owned business enterprises -- Law and legislation -- South Africa , Family-owned business enterprises -- South Africa -- Management
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: vital:10927 , http://hdl.handle.net/10948/211 , Family-owned business enterprises -- Law and legislation -- South Africa , Family-owned business enterprises -- South Africa -- Management
- Description: A business needs to be dynamic and adjustable to survive in the ever-changing marketplace in which it operates. The environment is no longer merely the immediate domestic business environment within which the specific business operates but also, with the advent of information technology and globalisation, overseas markets. This is true for all businesses and no less so in respect of family businesses. Balshaw (2003:23) lists the many issues which impede family businesses as, amongst others: Unresolved family and personal issues; Dysfunctional relationships; Poor communication; Lack of commitment; No succession plan or timetable; Inability of the senior generation to relinquish control; No unifying vision or dream in the family; Open conflict; Nonexistent decision-making and governance structures; Lack of transparency and openness; Failure to plan strategically. In addition to this the business must be aware of and react to the changing circumstances in the environment.
- Full Text:
- Date Issued: 2003
- Authors: Tuck, Gaynaé
- Date: 2003
- Subjects: Family-owned business enterprises -- Law and legislation -- South Africa , Family-owned business enterprises -- South Africa -- Management
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: vital:10927 , http://hdl.handle.net/10948/211 , Family-owned business enterprises -- Law and legislation -- South Africa , Family-owned business enterprises -- South Africa -- Management
- Description: A business needs to be dynamic and adjustable to survive in the ever-changing marketplace in which it operates. The environment is no longer merely the immediate domestic business environment within which the specific business operates but also, with the advent of information technology and globalisation, overseas markets. This is true for all businesses and no less so in respect of family businesses. Balshaw (2003:23) lists the many issues which impede family businesses as, amongst others: Unresolved family and personal issues; Dysfunctional relationships; Poor communication; Lack of commitment; No succession plan or timetable; Inability of the senior generation to relinquish control; No unifying vision or dream in the family; Open conflict; Nonexistent decision-making and governance structures; Lack of transparency and openness; Failure to plan strategically. In addition to this the business must be aware of and react to the changing circumstances in the environment.
- Full Text:
- Date Issued: 2003
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