Succession in the family business: drivers and pathways

Abstract

Purpose – The succession process represents one of the most critical events in the family business lifecycle. The purpose of this paper is to explore this process while focussing first on the drivers behind the choice of successor and, second, on the impact of this choice on the entrepreneurial behavior of the siblings. Design/methodology/approach – The qualitative approach was used in which multiple case analyses were performed. A total of 12 cases were purposively selected from the Lebanese private sector, and semi-structured interviews were conducted with the successors and the founders when available. The interview data were transcribed and a coding scheme was created to generate relevant categories. Those categories were named and later re-assessed by an external researcher to ensure inter-rater reliability. Findings – The three dimensions of social capital were found to have a profound influence on the succession decision with much focus on familial stewardship as an emerging cognitive driving force. When “familial stewardship” is shared by incumbent and sibling, it strengthens the latter’s chances of being chosen as successor. Further, a succession pathways model was introduced that depicts the siblings’ behavior following the succession decision which seems to often trigger further entrepreneurship. Originality/value – This study is distinct as it introduces a new cognitive construct that helps rationalize the successor-selection decision in a Middle Eastern context. It also goes beyond the succession event to depict potential entrepreneurial behavior triggered by succession.