An investigation of the impact of succession planning on the success of small and medium-sized family businesses

Abstract

The objective of this study is to assess the role that succession planning plays in family businesses in the Sedibeng region of the Gauteng province in South Africa. According to Netsiande (2008:1) family businesses should anticipate, recognise, understand and work pro-actively on issues, learn from other businesses and find their own unique solution.to ensure sustainability. Management succession and succession planning is very important and it has a significant impact on family members, society and the business and economic sectors. This research study was conducted by means of a literature and empirical study. The aim of the literature studies was to gain insight into family businesses and the importance of succession planning. Topics covered in the literature study on family businesses includes a definition of family businesses, family business success, uniqueness of family businesses, characteristics of successful family businesses, advantages and disadvantages of family businesses, challenges facing family businesses. Topics covered in the literature study on succession planning includes a definition of succession, the importance of succession in family businesses, factors that influence succession, succession planning, selecting and choosing a successor as well as mentoring and preparation of the successor(s). The study was concluded on the basis of the findings of the empirical study, that the aspects that needs more attention to help with successful succession planning in family businesses in the Sedibeng district of the Gauteng province in South Africa, are the relationship between owner-manager and successor(s), willingness of the successor(s) to take over the business, willingness of the successor(s) to hand over the business and the preparation level of the successor(s). Lastly practical recommendations were suggested to support the family and the business to effectively manage succession planning in family businesses.