Management succession of black-owned family businesses in Limpopo Province
Abstract
The family business is often said to be a special kind of firm. It is special in the way family members involved combine family life and work. Therefore, it is difficult to view the business, the management and the ownership separately. In both advanced and developing economies, the great majority of business enterprises are family owned, and together they typically account for well over half of all existing and newly created jobs.
Management succession in family business is an issue of growing importance. These businesses generate a significant proportion of the economic activities in many countries, and a majority of these businesses are approaching the point where business owners will most likely be making serious decisions regarding their long-term future. The manner in which such large numbers of potential business successions is managed will impact, not only upon these individual businesses but also upon the business sector and society more broadly. The problems encountered in the family business succession planning are generally human ones. Consequently, the areas most in need of consideration, the issues to be managed and the difficulties that must be overcome when family business plan for succession mostly revolve around relationships, individual attitudes and experiences, business and family cultures and the values and aspirations involved. This makes it unlikely that any single model or approach to family business succession planning can be applied in all situations. However, some common themes emerge from a study of the business succession planning literature and the suggested models on offer. The required successor attributes need to be identified and appropriate processes for selecting and nurturing a suitable successor determined. The timing and manner for any hand over need to be matched to existing circumstances. The role and need of all the important participants should be acknowledged. Future business planning and a family business vision shared by all should be established. Ownership, management and inheritances are importance issue and must be addressed. Maintaining good relationship and open communication process is vital. The future of the successor must be clearly determined and managed.
The primary objective of this study is to assess management succession in black-owned family businesses in the Limpopo Province and make recommendations on how-these businesses can ensure the successful transfer of the business to the next generation of family members. It further addresses the importance of understanding business succession. It links aspects of succession planning and successor preparation to the effectiveness of the transition and performance of the business. The 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 succession. In light of the findings of the empirical study, it was concluded, that the most neglected things in ensuring management succession of black-owned family businesses are: succession planning, selection of a successor, retirement planning, communication and family forums within the family businesses.