An empirical study of succession planning in family-owned businesses: A case study of firms in Benue State.
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Background of the Study: Succession planning refers to the process through which family-owned businesses ensure the continued leadership and management of the firm by preparing future leaders within the family or through external recruitment (Kellermanns & Eddleston, 2023). It is particularly critical in family-owned businesses (FOBs) because of the intricate blend of family dynamics, ownership, and management (Lambrecht & Lievens, 2024). Family businesses are often characterized by long-term orientation, a strong emotional connection to the firm, and the desire to pass the business down through generations. However, the failure to implement effective succession planning can result in conflicts, leadership voids, and, ultimately, the decline of the business (Akinmoladun et al., 2023).
In Benue State, family-owned businesses play a significant role in the economic landscape, contributing to employment, innovation, and local development. However, many of these businesses face challenges in ensuring smooth transitions of leadership. A key challenge in Benue State is the reluctance of many family businesses to adopt formal succession planning processes, often due to cultural factors, emotional attachments, and lack of professional guidance (Chijioke & Uche, 2024). As family businesses grow, the need for formalized succession planning becomes even more urgent to preserve the firm’s legacy and ensure its sustainability. Despite this, the actual practices and outcomes of succession planning in family-owned businesses in Benue State have received limited academic attention, warranting further investigation.
This study will examine the processes, challenges, and outcomes of succession planning in family-owned businesses in Benue State, seeking to understand the impact of succession planning on business continuity and performance.
Statement of the Problem: Family-owned businesses in Benue State face difficulties in effectively implementing succession planning due to a combination of family dynamics, emotional attachment to the business, and a lack of formalized strategies. Without proper succession planning, these businesses risk leadership gaps, internal conflicts, and a failure to maintain operational continuity. Given the vital role of family businesses in the region’s economy, it is crucial to investigate how succession planning influences business sustainability and to identify strategies to overcome the barriers to effective succession planning.
Objectives of the Study:
1. To assess the current succession planning practices in family-owned businesses in Benue State.
2. To evaluate the challenges faced by family businesses in implementing succession planning.
3. To analyze the impact of succession planning on the continuity and performance of family-owned businesses in Benue State.
Research Questions:
1. What are the current succession planning practices in family-owned businesses in Benue State?
2. What challenges do family-owned businesses in Benue State face in implementing succession planning?
3. How does succession planning influence the continuity and performance of family-owned businesses in Benue State?
Research Hypotheses:
1. Family-owned businesses in Benue State do not implement formal succession planning practices.
2. Succession planning does not significantly influence the continuity of family-owned businesses in Benue State.
3. Family-owned businesses in Benue State face significant challenges in adopting succession planning strategies.
Scope and Limitations of the Study: This study will focus on family-owned businesses in Benue State, Nigeria, and will explore succession planning practices and their effects on business continuity and performance. Limitations include potential biases in responses, limited access to sensitive internal information, and the generalizability of findings to other regions.
Definitions of Terms:
• Succession Planning: The process of identifying and preparing future leaders within an organization, particularly in family-owned businesses, to ensure continuity.
• Family-Owned Businesses (FOBs): Enterprises that are owned and operated by members of a family, often characterized by a strong family involvement in management.
• Business Continuity: The ability of a business to sustain operations and performance over time, particularly during leadership transitions.
