Trust a large factor in the emotional process of family business succession

May 12, 2011

A new study from Family Process shows that passing down a family business is an emotional process, and key factors need to be in place in order for the transition to prove successful. The owner needs to trust other family members' involvement in the long-term plan for the business, and nurture a healthy outlook and plan for their own retirement. In the United States alone there are an estimated 10.8 million family businesses. Only 30% of businesses stay in the family from the first to the second generation.

Beyond business-related decisions, such as managing organizational change, there are at play in the transfer of ownership to an adult heir or family member. This research finds that the family business, in many cases, takes on its own personality, and can be seen almost to be a member of the family.

Ten active family business owners were asked to share their life stories in an effort to explore what constrains successful succession. The interviews were used to allow participants to tell the story of their business, thinking about pivotal chapters in its evolution. Researcher Dr. Alexandra Solomon, co-investigator with an eight member team, "Narratives are critical to understanding the 'letting go' process because they reveal the owners' dreams, challenges, and how they handle both such that they ultimately can or cannot let go. As difficult as it may be to invite especially male family business owners to talk about 'tender stuff,' family therapists and family business consultants need to be willing to explore how and where the business 'lives' within the owner in order to free him up to pass the business along to the next generation."

Family dynamics and unresolved emotional concerns can impact family business succession. Internal influences, such as trust and worldview, and interpersonal influences, such as relationships, , and marital quality, are powerful factors that can facilitate or constrain family business succession. When family therapists are working with an individual, couple, or family, and there is a family business at stake, family therapists are advised to explore the possible influence of the family business regardless of the nature of the presenting problem.

Solomon, "We want family business consultants to be aware of these findings because they speak to the importance of looking at succession problems through a systemic lens so that they can hypothesize about the facilitating or constraining impact of these key internal and interpersonal influences."

Explore further: Physicists create tool to foresee language destruction impact and thus prevent it

add to favorites email to friend print save as pdf

Related Stories

Fighting bacteria—with viruses

37 minutes ago

Research published today in PLOS Pathogens reveals how viruses called bacteriophages destroy the bacterium Clostridium difficile (C. diff), which is becoming a serious problem in hospitals and healthcare institutes, due to its re ...

Noise pollution impacts fish species differently

1 hour ago

Acoustic disturbance has different effects on different species of fish, according to a new study from the Universities of Bristol and Exeter which tested fish anti-predator behaviour.

Atomic structure of key muscle component revealed

1 hour ago

Actin is the most abundant protein in the body, and when you look more closely at its fundamental role in life, it's easy to see why. It is the basis of most movement in the body, and all cells and components ...

Recommended for you

Affirmative action elicits bias in pro-equality Caucasians

14 hours ago

New research from Simon Fraser University's Beedie School of Business indicates that bias towards the effects of affirmative action exists in not only people opposed to it, but also in those who strongly endorse equality.

Election surprises tend to erode trust in government

Jul 24, 2014

When asked who is going to win an election, people tend to predict their own candidate will come out on top. When that doesn't happen, according to a new study from the University of Georgia, these "surprised losers" often ...

Awarded a Pell Grant? Better double-check

Jul 23, 2014

(AP)—Potentially tens of thousands of students awarded a Pell Grant or other need-based federal aid for the coming school year could find it taken away because of a mistake in filling out the form.

User comments : 0