Owner Family: Critical Factor for the Success of Business Succession in Family Owned Companies

Abstract

The foremost purpose of this research was to evaluate the level of influence coming from owner family on business succession processes in various successor modes. The targeted population was selected were the successors of family owned businesses that contain between 50 and 149 employees and who were involved in a business succession process within the last 10 years. Sample units were selected through simple random sampling method and consist of 128 units. The main data collection modes were a structured research questionnaire mail-out, and also indepth discussions held on successors. All factors have a positive relationship to Initial satisfaction in Business Succession Process. However, the relatively important factor is family harmony. When succession is conducted with family member successors, the most important factor for success is family harmony. In practice business succession process encourages stakeholders to work for higher levels of satisfaction for the successor. Furthermore, the study recognizes Unrelated Manager Successor as a suitable alternative succession mode for family owned business.