Management succession in black-owned family businesses : an exploratory study
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The objective of this study is to assess management succession in black-owned family businesses in the Vhembe District in Limpopo Province in South Africa. In both developed and developing countries, the majority of family businesses are family owned and controlled and these businesses contribute significantly to their economic growth. To be sustainable, family businesses should anticipate, recognise, understand and work pro-actively on issues, learn from other businesses and find their own unique solutions. Management succession in family businesses is an issue of significant importance. The manner in which succession in family business is managed will impact upon the broad business sector and society, not only upon these individual family businesses. This research was conducted by means of a literature and empirical study. The purpose of the literature study was to gain in-depth knowledge on family businesses and management succession. The literature study formed the basis of understanding family businesses and management. Topics covered in the research literature include: definition of a family business, unique characteristics of family businesses, the advantages and disadvantages of family businesses, challenges to the continuity of family businesses, definition of succession and succession planning, the importance of management succession, the nature of the succession process, the selection of a successor, mentoring and preparing a successor and the final transfer of management to the successor. It was concluded on the basis of the findings of the empirical study, that the most neglected aspects that could hinder successful management succession in black-owned family businesses in the Vhembe district, are management succession planning, estate and retirement planning, the selection of the successor, the prevention and management of conflict and the establishment of family forums to enable effective communication within the family businesses. Practical recommendations were suggested to support the family and the business to effectively manage the management succession process in family businesses.