Intergenerational communication in family firm succession

Abstract

Purpose The purpose of this paper is to explore how intergenerational communication between predecessors and successors impacts on the entrepreneurial family and the family business, and aims at developing a typology of communication patterns in family business succession. Design/methodology/approach Based on grounded theory methodology, ten in-depth narrative family interviews with predecessors and successors were conducted, transcribed and analyzed. The qualitative data analysis followed a hermeneutic approach focusing on in situ language phenomena such as positioning, syntax, semantics and interaction patterns. Findings The reconstruction of the interviewees’ subjective realities resulted in a theoretical concept with four communication types, varying between continuity and change, and between relatedness and autonomy. Given the fact that succession is not a single event but a long-lasting process, the typology can be transferred into a dynamic model for succession comprising three consecutive stages: intergenerational transmission, independent acquisition and finally interdependent development of the family firm heritage. Research limitations/implications First, the results are based upon a small sample size (n=10) that should not be generalized to the population of family businesses at large. Hence, to complete the overall picture, a broader survey among family-run firms by means of an extended qualitative or even a quantitative survey would be most valuable to generate more objective data. Another shortcoming is that the authors only investigated intra-family succession and challenges. No attention was paid to the various opportunities of external succession of family businesses, such as management buyout, management buy in, external management or liquidation. Practical implications Understanding the sociological and psychological aspects of communication helps family firms to identify characteristics in communication during their succession process. First, the knowledge that various communication types are highly dependent upon the personal interactions among the parties involved, might be an asset for family firms which are handing over their company in the future. Second, knowledge on different communication types might raise awareness for and prevent from conflicts and emotional relationships during the firm succession and thus function as a strategic advantage. Social implications Following a sustainable and responsible strategy, family firms can be regarded as the pillars of our economy. Yet, they can be compared to an endangered species often not surviving the transfer from one generation to the next. Succession seems to be a delicate stage in a company’s lifecycle, the failure of which threatens thousands of jobs every year. When it comes to the survival rate of family firms, the increase of communicative and reflexive competence as it is addressed by this paper, is one of the key factors helping the family to deal with conflicts and thus strengthen their self-efficacy. Originality/value The dynamic succession model presented in this paper gives experts a comprehensive insight into the inner logic of entrepreneurial families reconstructed by their communicative patterns. Understanding the different dimensions of succession lays the foundation for consulting and supporting family members in transition processes helping them to cope with intergenerational ambivalences and find solutions that are both beneficial for the individuals as well as for the business.