Succession Planning as Planned Behavior: Some Empirical Results

TLDR

The study applies the theory of planned behavior to hypothesize that an incumbent’s desire to keep the firm in the family, family commitment, and a trusted successor’s willingness to take over influence the level of succession‑planning activities. The authors test these hypotheses with survey data from 118 family‑firm presidents. The findings indicate that a trusted successor’s willingness to take over strongly drives all succession‑planning activities, suggesting that succession planning is more successor‑driven than incumbent‑driven, which has negative implications for the firms’ succession processes.

Abstract

This paper uses the theory of planned behavior to hypothesize the influence of the incumbent's desire to keep the business in the family, the family's commitment to the business, and the propensity of a trusted successor to take over on the extent to which family firms engage in succession planning activities. We test these hypotheses using data collected from presidents in 118 family firms. The results show that the propensity of a trusted successor to take over significantly affects the incidence of all succession-planning-related activities. Succession planning may, then, be the result of push by the successor more than of pull by the incumbent. Such a view has negative implications for the succession process that the family firms in our sample follow.