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An entrepreneurial process perspective on succession in family firms

Abstract

We review and analyze previous literature on succession in family firms from an entrepreneurial process perspective. Through a three-step cluster analysis of 117 published articles on succession in family firms published between 1974 and 2010, we find several themes within which succession can be understood from an entrepreneurial process perspective where both the entry of new owners and exit of old owners are associated with the pursuit of new business opportunities. We identify gaps within each cluster and develop a set of research questions that may guide future research on succession as an entrepreneurial process. Since succession involves implications for individuals, families and firms, we suggest researchers should adopt a multilevel perspective as they seek answers to these research questions. Our review and analysis also underlines the need to focus on ownership transition rather than only management succession, and the importance of carefully defining both succession and family firm.

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Fig. 1

Notes

  1. 1.

    We use the phrase potential process of entrepreneurial exit and entry because of the basic truisms that not all startups are entrepreneurial (e.g. Shane 2003) and all successions are not entrepreneurial. We are interested in the general preconditions for entrepreneurship, such as entry, growth and harvest (exit) that can be related to ownership succession and transition.

  2. 2.

    Cluster analysis consists of multivariate techniques whose primary purpose is to divide a set of objects into groups, based on the similarity of the objects for a set of specified characteristics.

  3. 3.

    The variables related to level of analysis are individual, inter-personal/group, organizational and environmental; those related to phase of succession are general topics, planning succession, managing succession and post-succession; those related to the family- or firm members involved are incumbent/founder, successor, parent, offspring, manager/employee, shareholder and board of directors.

  4. 4.

    In Table 8 we list prior literature reviews not considered in the cluster analysis. The studies included in the literature review (Tables 18) are marked with an asterisk (*) in the Reference List.

  5. 5.

    Almost 50 % of the empirical studies in our review concern the USA, while 10% focus on Canada or the UK.

  6. 6.

    Although the role of taxes is investigated in File and Prince (1996) and Bjuggren and Sund (2002), these are within-country studies and hence exclude comparative variations in institutional settings.

  7. 7.

    The fact that we found no studies on the impact of governance change on innovativeness and growth may be because of our choice of search words. Had we included search words such as “business transfers,” “M&A” and “strategic renewa,” it is possible that more studies would have been found. We thank an anonymous reviewer for this point.

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Asterisk preceding a reference given in the Reference List indicates that the article is one of the 125 articles included in this review

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Acknowledgments

The authors would like to acknowledge the financial support from The Swedish Research Council and Lars Erik Lundbergs Foundation. Mattias Nordqvist would also like to acknowledge the support from Carl-Olof and Jenz Hamrin Foundation.

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Nordqvist, M., Wennberg, K., Bau’, M. et al. An entrepreneurial process perspective on succession in family firms. Small Bus Econ 40, 1087–1122 (2013). https://doi.org/10.1007/s11187-012-9466-4

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Keywords

  • Succession
  • Ownership transition
  • Family firms
  • Entrepreneurial process
  • Opportunity recognition
  • Literature review

JEL Classifications

  • L21
  • L 25
  • L26
  • M10
  • M21