Transition in successors’ behavior and mindset while managing long-lived small and medium-sized manufacturing enterprises: a qualitative study

Abstract

Background: There have been many studies conducted on succession, which can be considered as the most important issue in family businesses. However, most of these previous studies have focused only on the early stage of succession, uncovering the role of the predecessor and the successor. Only a few studies have made efforts to examine the total lifecycle of succession. The purpose of this study is to explore the process of the transition in successors' behavior and mindset while managing long-lived small and medium-sized manufacturing enterprises throughout the lifecycle of succession. Methods: Semi-structured interviews were conducted with six successors of small and medium-sized manufacturing companies who are more than half a century old. Their answers were analyzed using the Modified-GTA method to construct a hypothetical model. Results: In total, 46 concepts, four categories, 17 subcategories, and one core category were generated. An analysis result diagram using all concepts and categories was formed. From the observation of this diagram, the successors gained confidence in management through the dilemma between autonomy and constraint in the early stage of succession, which was found in previous research. Following the initial stage, the successors responded to the crisis caused by market constraints and created autonomous strategies in their businesses. Conclusions: By experiencing repetitive crises, the successors tend to acquire new perspectives toward the naturally occurring crises. This change of premise by the successors is considered as the process of double-loop learning. Relationships inside and outside the company influence the generation of this viewpoint. From a long-term perspective, a sense of unity with employees, stable employment, and the pursuit of enjoyment constitute the successors' own values in this model.