Strategies for Succession Planning and Sustained Business Profitability for Small Business

Community College Student Persistence in the Online

Learning Environment

Section 1: Foundation of the Study

The U.S. Small Business Administration (SBA) defines a small

business based on its industry as (a) a sole proprietorship, (b) a privately

owned corporation, or (c) a partnership with a maximum of 500 employees

or a maximum of 1,500 employees and less revenue than larger businesses

(SBA, 2018). Small business owners (SBOs) represent 99.7% of all U.S.

businesses, employing half of private-sector employees (SBA, 2018).

Although there are numerous small businesses, the high failure rate of small

business ventures within the first 5 years is a problem for employment

opportunities in the United States. Further compounding the high rate of

failure, many SBOs lack strategies to develop an effective succession plan to

sustain business profitability for the next generation of owners. When a

small business fails, all stakeholders, such as investors, employees,

customers, and community members, suffer emotional and financial distress.

The purpose of this study was to explore and identify the insights of SBOs

who had successfully operated a small business for at least 5 years and had

implemented a successful succession plan.

Background of the Problem

A succession plan is a written, detailed set of steps for how a business

will continue in case of resignation, death, or removal of leaders in the

organization, including the development and promotion of employees

(Ballaro & Polk, 2017). The purpose of a succession plan in an organization

is to outline the proper steps to fulfill its mission, vision, and selection of

qualified human capital to stay in business (Calareso, 2013).

According to the U.S. Bureau of Labor Statistics (2021), baby

boomers, individuals born between 1946 and 1964, were the largest segment

of the workforce until millennials surpassed them in 2016. Based on the

2020 Census (U.S. Census Bureau, 2021), the number of baby boomers 65

or older will exceed 73 million by the end of 2030. SBOs will need

succession plans to help prevent negative impact to their businesses as baby

boomers exit the workforce (Wyman, 2020).

Problem Statement

Baby boomers are retiring rapidly and vacating prominent small

business positions, leaving no one to replace them (Hillman & Werner,

2017). By 2033, 70% of privately owned small businesses in the United

States with a total value of $10 trillion will experience the highest

intergenerational transfer of wealth in U.S. history (SBA, 2018). The general

business problem is that without a succession plan, a small business may

eventually fail or cease operating with the death or retirement of the SBO.

The specific business problem is some SBOs lack strategies to develop an

effective succession plan to sustain business profitability for the next

generation of owners.

Purpose Statement

The purpose of this qualitative multiple case study was to explore

strategies that SBOs use to develop an effective succession plan to sustain

business profitability for the next generation of owners. I collected data by

interviewing seven small-size business owners in the Washington,

DC/Baltimore, MD metropolitan area who had been in business more than 5

years and implemented successful succession plans for transitioning the

business to a second- or third-generation owner and sustained profitability.

The implications for positive social change are increased revenue for

businesses that may lead to the creation of job opportunities and

improvement of the livelihoods of communities’ citizens and families.

Nature of the Study

The three research methods are qualitative, quantitative, and mixed

(Kang & Evans, 2020). Researchers use the qualitative method to explore

the what, how, and why of phenomena (R. K. Yin, 2018). Using the

quantitative method requires the statistical analysis of numeric data to test

hypotheses of the significance of the relationships among variables

generated from an instrument administered to participants (Tominc et al.,

2018). The quantitative research method was not appropriate for this study

because I did not test hypotheses to examine the relationships among

variables. Mixed-method research is a combination of quantitative and

qualitative approaches that comprises collecting and analyzing data to create

a stronger understanding of phenomena than either individual method (R. K.

Yin, 2018). The mixed method was not appropriate for this study because

there was no quantitative element under study. Qualitative research was

appropriate for this study because I used this method to understand

successful strategies of succession planning (SP) for sustained business

profitability for the next generation of owners.

I considered three qualitative research designs: (a) phenomenological,

(b) ethnographic, and (c) case study. Researchers use phenomenological

design to describe how people experience a particular phenomenon (van

Manen, 2017). Phenomenological research was not the optimal choice for

this study because phenomenological research includes an exploration of the

meanings of human encounters with a phenomenon as portrayed by various

participants. Ethnography is a technique that researchers use to study a group

of individuals in their regular setting over an all-inclusive period by

gathering information through interviews and observations (A. E. Bass &

Milosevic, 2018). Because I was not studying a cultural group in its natural

setting, ethnography was not appropriate. Gioia et al. (2013) stated that the

qualitative case study research design involves an attempt to understand a

phenomenon, a process, and experiences. R. K. Yin (2018) explained that

researchers conduct a multiple case study to analyze data across different

situations and within situations. When a researcher studies a person or a

group of people within one organization, a single case study is appropriate

(R. K. Yin, 2018). A qualitative multiple case study research design was

appropriate for this study because I explored the strategies of SP and the

sustained business profitability of seven small businesses.

Research Question

What strategies do SBOs use to develop an effective succession plan

to sustain business profitability for the next generation of owners?

Interview Questions

1. What was your motivation to create and implement a succession

plan?

2. Whom did you involve in your planning and implementation of the

succession planning strategies and why?

3. What key strategies do you use in your company’s succession

plan?

4. What key processes did you use to develop and implement your

company’s succession planning strategies?

5. What were the most significant challenges or barriers you

experienced implementing your company’s succession plan?

6. How did you address each of the significant challenges or barriers?

7. Based upon your experience, what, if any, part(s) of the succession

plan and strategies do you believe can be improved, and if so,

how?

8. What strategies have you found most effective for motivating your

employees to adapt to changes at your organization?

9. What else can you share with me about the strategies your family-

owned organization uses to sustain business profitability for the

next generation of owners?

Conceptual Framework

The composite conceptual underpinning for this study was Argyris

and Schön’s (1997) organizational learning theory (OLT) and Burns’ (1978)

transformational leadership theory (TLT). Performance problems typically

occur when members of an organization are operating in unfamiliar areas of

the business, including a small business operating during tacit knowledge

transfer (unfamiliar context) and risking failure instead of continued success

(actual performance vs. desired performance). To avoid such performance

problem issues, the members of an organization should undertake an inquiry

to allow learning to occur among the members of the transition team. Based

on OLT, there are three essential stages that arise: acquisition of relevant

data, interpretation of relevant data, and adaptation of relevant data.

Members of the organization take the initiative for making strategic

decisions, establishing derivative goals, and learning indicators from actual

data (Argyris & Schön, 1997). Interpretation of the data occurs when

members of the organization engage in comparing results to update the

learning of the organization, acting upon the data to do what is best for the

organization, and moving into the third stage, which is the adaptation of

relevant data (Argyris & Schön, 1997). Research on tacit knowledge during

SP is critical. Previous business owners pass on tacit information to the

incoming owners to help keep the business operating successfully. The

transfer or succession of leadership should be transformational within a

company, if successfully implemented (Woodfield & Husted, 2022).

Burns (1978) developed TLT and used the theory to explain

leadership based upon the premise that leaders can inspire followers to

change expectations, perceptions, and motivations to work toward common

goals. Burns identified these vital constructs underlying the theory: (a)

idealized attributes, (b) idealized behaviors, (c) intellectual stimulation, (d)

inspirational motivation, and (e) individualized consideration. Al-Salami et

al. (2014) found that the transformation leadership (TL) style positively

affected organizational learning (OL). Eisler (2015) explored how

transformational leaders helped create and shape organizations’ visions by

challenging the status quo. A shared vision is critical for the learning

organization because it catalyzes learning and helps maintain focus.

Transformational leaders motivate and persuade their followers to

accomplish results while improving the leader’s capacity. TL is known to

positively affect followers' work results, efficiency, duty, and work

fulfillment (Zagoršek et al., 2009).

Researchers have confirmed that TLT is strongly identified with OL

(Asif, 2019; García-Morales et al., 2012; Zagoršek et al., 2009). Asif (2019)

stated that OL has a notable effect on workplace culture. Coordination and

correspondence as well as learning are reported to be encouraged by a social

connection (Obeidat et al., 2018). Based on the findings from the study that

they are relevant, I used the lenses of TLT and OLT in understanding the

study findings.

Operational Definitions

Baby boomers: The 76 million people born between 1946 and 1964.

They were born during the post-World War II baby boom. They rejected and

redefined traditional values. They are also the wealthiest generation, the

most active generation, and the generation with the most disposable income

for food, apparel, and retirement programs (Park et al., 2021; Rouse & Ross,

2018).

Great Recession: The financial crisis that began in the United States

and quickly spread to other countries in late 2007 and lasted through mid-

2009. It was the longest and deepest economic downturn since the Great

Depression in the United States (Carré & Le Maux, 2020).

Small business: A small business is a U.S. entity meeting the SBA size

standards on an industry-by-industry basis. In general, small businesses have

fewer than 500 employees and/or less than $38.5 million in annual tax

receipts (SBA, 2022).

Small Business Administration (SBA): The U.S. SBA is an

independent agency of the federal government that assists, counsels, aids,

and protects the interests of small businesses (SBA, 2020a).

Small- and medium-sized enterprises (SMEs): SMEs are defined

differently in different countries. Each country determines the specifics on

the size of an SME. The categorization or sizing of SMEs in the United

States is based on the number of employees, annual sales, assets of the

company, and market capitalization, and it varies from one industry to

another (Ute, 2020).

Assumptions, Limitations, and Delimitations

Assumptions

Assumptions are suppositions or information that researchers take for

granted while conducting research (Hibbert et al., 2014). The first

assumption was that the number of SBOs in the Washington, DC/Baltimore,

MD metropolitan area would be sufficient to address the research problem.

The second assumption was that those SBOs would feel comfortable sharing

their experiences and perceptions as chief executive officers (CEOs) and

how they implemented the company’s succession plan. The third assumption

was that the participants would be honest about their experiences and

perceptions and the company’s succession plan.

Limitations

Limitations are constraints that researchers encounter, which the

researchers cannot change (Allen, 2017). I identified three limitations that

may have affected my ability to complete this study. The first limitation was

finding seven business owners who had been in business for 5 years and

successfully implemented a succession plan in the Washington,

DC/Baltimore, MD metropolitan area who would be able to participate. The

second limitation was the travel time and time commitment for the

participants to complete the study. The third limitation was that the findings

might not apply to other populations.

Delimitations

Delimitations are constrictions on a research study that are within the

control of the researcher (Theofanidis & Fountouki, 2018). The geographical

delimitation of this study was that participating companies would be in the

Washington, DC/Baltimore, MD metropolitan area. Another delimitation

was that I collected data only from successful business leaders of different

industries operating in the Washington, DC/Baltimore, MD metropolitan

area.

Significance of the Study

SBOs may be motivated to develop an effective succession plan based

on the results of this study. The findings from this study could be used by

SBOs to improve business strategies and practices. Given that baby boomers

are retiring rapidly and vacating prominent small business positions, leaving

no one to replace them, developing and implementing an effective

succession plan is critical for a small business to sustain business

profitability for the next generation of owners and develop an effective

succession plan to sustain business operations. The lack of strategies to

develop and implement a succession plan may cost small businesses millions

of dollars. The implications for positive social change include improving

communities with more jobs and tax revenues for community development

projects aiding needy citizens.

Contribution to Business Practice

Small business leaders may benefit from the results of this study by

understanding the elements that influence the longevity and success of small

businesses through SP. These data may be useful to both new and existing

small businesses. The number of small start-up businesses in the United

States surpassed 700,000 in the early 2000s (Hoffman & Novak, 2000; SBA,

2020a; Tunca, 2019). Small businesses that are productive for over the initial

5 years of operation demonstrate their capacity to deploy effective strategies,

grow, and sustain profits (Mitchelmore & Rowley, 2013). SBOs may use the

results of this study to identify what abilities and operational techniques they

need to prevail in business and implement a successful succession plan

within their organization. The results of this study may expand the

knowledge base for SBOs who desire to implement a successful succession

plan within their organization.

Implications for Social Change

Small businesses provide economic stability through employment in

their communities, and SBOs may create positive social impact benefiting

local communities. The study results may contribute to positive social

change with successful SP, which may increase employment and enhance

living standards for residents. The implications for positive social change

include increased revenue for businesses, which may lead to the creation of

job opportunities and improved quality of life in local communities. These

jobs could provide employment that may improve the standard of living of

local residents and create increased tax revenue, which could fund

infrastructure improvements and social programs that could benefit residents

in local communities.

A Review of the Professional and Academic Literature

The purpose of this qualitative case study was to explore strategies

that SBOs use to develop an effective succession plan to sustain business

profitability for the next generation of owners. In the United States, 99.7% of

businesses that employ half of the private-sector employees are SBOs (SBA,

2018). This qualitative research case study involved a review of literature

from government sources, academic sources, and professional journals on

small business sustained profitability and SP. Topics in this literature review

include the history and origins of SP, SP in the military, why succession is

essential to business success and profitability, development, training, and

leadership, and the contribution to the research problem. In qualitative

research, researchers use a literature review to (a) provide the scholarly

setting to work and position other related studies with the research, (b)

distinguish gaps in information, (c) abstain from researching an already-

solved problem by identifying previous investigations on a subject, (d) set as

a basis prior research on a topic, and (e) increment the broadness of

information research (Gentles et al., 2016). Researchers perform a literature

review to explore strategies that may apply to their study (Hennink & Kaiser,

2021).

I gathered sources from the Walden University Online Library by

searching the business and management databases. The majority (53.3%) of

the 349 sources in this study were published between 2018 and 2022. I used

the following databases: Google Scholar, Business Source Complete,

ABI/INFORM Collection, Emerald Insight, Sage Journals, The European

Journal of Business Management, and ProQuest. The keywords I used to

search articles in these databases included small business succession

planning; family-owned business; small business strategies; operations

strategies; a small business in Washington, DC, Maryland, and Virginia;

strategies for small business; small business profitability; small business

failure; and leadership in small business.

History of Succession Planning

SP is traceable to ancient civilization cultures. Oral traditions and

recorded or written history of SP existed before the 1st century in many

nations, including ancient Greece, China, Egypt, and Israel (Shotwell, 1922).

In ancient Rome, hereditary rule was the basis for succession. Birthright was

the primary factor in determining rulers, not their capability, capacity, or

trustworthiness (Drinkwater, 2022). Many famous Roman leaders, such as

Augustus, Claudius, and Vespasian, were born into families enjoying a

privileged and prestigious life (Bradley, 2016). There were also notable

corrupt leaders (e.g., Caligula, Nero, and Domitian) selected because of their

birthright. Trentin (2011) described an era in the Roman Empire marked by

viciousness and reliance upon power through force. Trentin noted that

leaders often endured by destroying anyone who challenged their authority.

By exploring the history and origin of SP and looking at SP in the military,

researchers have expanded their knowledge about succession in the military.

Military leaders in some instances ousted a country’s leader if they

became disappointed with that leader. Force and violence were chosen

methods, and numerous emperors’ lives were cut short (Drinkwater, 2022;

Koval et al., 2006). Corke-Webster (2020) noted that Roman leaders

assumed control over the succession process toward the Roman Empire’s

end. An orderly succession process evolved with the reign of Julius Caesar,

who desired a successor who was sensible, reasonable, brilliant, and

legitimate. Caesar adopted Augustus, who became his designated heir

(Corke-Webster, 2020). Other emperors followed Caesar’s pattern. Claudius

sidelined his child for Nero, while Nerva adopted Trajan to guarantee a

smooth succession.

The process of SP is different in other parts of the world. Gender bias

strongly influenced SP in medieval Europe (e.g., male heirs were preferred

over female heirs; Corcos, 2012). In some parts of pre-Columbian America,

Southwest Asia, and some portions of Africa, a matrilineal inheritance

system was standard before the 1st century (Hartung, 1985). Gender

preference in premodern Europe is virtually unknown, but relative to other

world areas, Europe is known for having a strong pro-male gender bias

(Alesina et al., 2013; Boserup, 1970). Under the Salic law, which the

Carolingian Empire practiced, females were prohibited from succeeding to

the throne (Herlihy, 1962; Potter, 1937). The Carolingians viewed the law as

necessary to ensure a smooth and peaceful transition of a male heir (Schlögl,

2020). Globally, there are 26 monarchies in the early 21st century comprised

of kings, queens, emperors, sultans, and emirs (Bjornskov & Kurrild-

Klitgaard, 2014). These monarchs may exhibit transformational or

organizational leadership skills, but these skills are not required. The most

recognizable monarchy is that of Great Britain.

Royal Succession

The English Bill of Rights of 1689 restricts the succession to only

Protestant descendants of Sophia of Hanover, granddaughter of James I, the

first monarch to be called King of Great Britain, as noted in the Act of

Settlement 1701 (Bessler, 2018; Murrell, 2017; Tonascia et al., 2020; Yale

Law School, 2008). The heir apparent, Prince William, Duke of Gloucester,

died 2 months before ascending the throne (Murrell, 2017). The Acts of

Union 1707 further govern the succession process to the British throne

(Brown, 2020). Parliament is the only governing body that may change the

rules of succession (Jones, 2020), and no member of royalty may renounce

their right of succession (Brown, 2020; Brown & Whatley, 2022; Ford,

2007). There are other countries covered under British rule. Britain's

imperial history includes Canada and Australia, plus 16 other countries.

Beyond Great Britain's House of Windsor and Queen Elizabeth II,

worldwide, 25 other royal monarchies vary in their order of succession

process and the extent of the power they hold (Elliott, 1992). Eleven are

ceremonial or figurehead monarchs. Five have some political power, and the

remaining nine are absolute ruling monarchs. The monarchies divide into

three separate categories, a ceremonial monarch, a monarch with some

political powers, and a monarch with absolute power. Selection of the 26

monarchies took place through a hereditary succession process and was not

based on TL or OL qualities (Elliott, 1992; Frisch, 2011).

Ceremonial or Figurehead Monarchs

Succession for most of the ceremonial monarchies is hereditary.

Ceremonial or figurehead monarchs are symbolic and lack actual political

power (Middleton, 2015). Norway, the Netherlands, Lesotho, Belgium,

Spain, Japan, Luxembourg, Denmark, and Malaysia have ceremonial

monarchs (Guillén, 2018). In Norway, the monarch does not rule directly,

and in Lesotho, the king must consult with the prime minister before making

select appointments (J. F. Møller, 2020; Nyane, 2020). Neither King Juan

Carlos I of Spain nor the monarch of the Grand Duchy of Luxembourg have

power (Anckar, 2020; Kalpokaite & Radivojevic, 2020). Succession is

primarily hereditary, though other processes occur.

In most hereditary monarchies, the firstborn male is in line for

succession, but other succession processes occur. Emperor Akihito of Japan

began his reign in 1999 and is part of the oldest hereditary monarchy, which

traces back to 660 A.D. (Aldrich & McCreery, 2020; Ruoff, 2021; Surajaya,

2018). By law, Sweden allows female succession, and the Netherlands,

Denmark, and Luxembourg have also had female monarchs (Bogdanor,

1995; Nauman, 2020). Malaysia, though a ceremonial monarchy, is unique.

Each state in Malaysia has one hereditary leader, a sultan. Every 5 years, the

sultans select one of their members to serve as king.

Monarchs With Some Political Power

Several monarchies wield some political power. In Monaco, the

monarch appoints the minister of state from a slate of three preselected

candidates (Inata, 2020). In Thailand, the king holds some constitutional

powers, though rarely used, including pardoning criminals and vetoing

legislation (Chambers & Waitoolkiat, 2020; Unchanam, 2020). In

Liechtenstein, a vote of the citizens increased the monarch’s powers; the

monarch can veto any legislation and dissolve the parliament at will (Inata,

2020). In Tonga, once an absolute monarchy, King George Tupou succeeded

the throne from his father and promptly ceded most of his powers to the

country’s prime minister in response to pro-democracy rallies (Tecun et al.,

2020). In the small Himalayan country of Bhutan, a Wangchuck monarchy,

the king has some powers (Iyer, 2019). Unlike monarchs with some power,

there are several monarchies where the monarch has absolute power.

Monarchs Who Rule

An absolute monarchy was a type of government common during

medieval Europe. In absolute monarchies, society is governed by a ruler, an

almighty sovereign with unlimited power over all parts of the general public,

including political forces and financial matters (Inata, 2020). Absolute rule

advanced the intensity of a ruler because it guaranteed that the sovereign did

not derive power from the citizens (Inata, 2020). In this manner, the citizens

had no control or state over the rulers. Absolute monarchies exist in many

nations in the Middle East, Asia, and Africa (Inata, 2020).

In Saudi Arabia, the king is the absolute monarch and the prime

minister who appoints a cabinet comprised mostly of royal family members

(Fole, 2019). In Kuwait, the emir, the title used instead of king, rules the oil

nation and heads the royal family. Qatar has dealt with coup attempts within

the royal family with sons or nephews anxious to take the throne (Yom,

2020). In Swaziland, the king is the absolute monarch of the small African

country whose king, Mswanti III, inherited the crown from his father

(Fombad, 2020). In Morocco, the king has absolute power and the power to

appoint the prime minister and government members (Inata, 2020). In a rare

move, King Mohammed VI of Morocco voluntarily shrank some of his

powers in the wake of the Arab Spring uprisings of 2011 and can no longer

dissolve parliament or call for new elections (Naguib, 2020). The Pope is the

monarch of a European city state known as Vatican City State. The Pope is

elected and heads the Catholic Church (Elliott, 1992; Frisch, 2011; Inata,

2020). The Catholic Church has a detailed succession plan.

The Catholic Church

Since the beginning of recorded time, the concept of SP has been a viable

strategy. Some of the earliest origins of SP are found in the Christian

church, the Catholic Church, and the Bible (Soomro et al., 2020). Jesus

Christ introduced a new era of SP (Atkinson, 2016; Pugh, 2016) in the 1st-

century Christian church. Hollinger (2013) pointed out that Christ’s biblical

model of SP played a vital role in providing development and continuity,

both of which were essential for working effectively. Jesus selected and

prepared 12 men, later known as the apostles, who came from diverse

backgrounds and had different weaknesses and strengths (Blanscet, 2021).

By the time he turned over leadership to the apostles, they had trained others

to follow in his steps (Serrano, 2020). This form of SP is seen globally

within the Christian church, including the Catholic organization (Soomro et

al., 2020).

A highly visible succession plan is seen in the Catholic church; its head

is the Pope, with a hierarchy consisting of cardinals, archbishops, bishops,

and priests (Belloc, 2021). Within the Catholic church, men in hierarchal

roles are the stakeholders involved with SP. They must support the decision

and the direction that the organization’s leader endorses (E. C. Davis, 2020).

The other Catholic Church stakeholders are members and women who fill

the roles of nuns (Mangion, 2020). These women have no role in SP except

within their ranks, nor do the millions of organization members worldwide

(Burdett, 1998; E. C. Davis, 2020). Although many differences exist

between organizations in the 21st century and the early church,

contemporary leaders can learn fundamental lessons from the SP approach

seen in the early church.

Military Succession Planning

SP in the military looks entirely different. The U.S. military develops

its enlisted and officer personnel at every level with succession in mind

(Mattis, 2018). Without SP or training, troops will experience expanded

disarray, blended messages, and an absence of solidarity (Breckenridge,

2017). Every military leader’s job is to ensure that they are developing

soldiers into leaders and excel at every cost through military institutional

training and civilian education (Griffin, 2020; Murray et al., 2019). For

morale to remain positive, soldiers need lucidity about who will assume

command, especially on the battlefield (Blom & Force, 2016). Blom and

Force (2016) noted that the U.S military, faced with ever-evolving global

challenges, periodically reevaluates its succession process. Other countries

have developed a succession plan for their military similar to that of the

United States.

The U.S. military has five branches with different points of view on

leadership improvement. Each branch stresses the requirements and

strategies for creating leaders’ capabilities (Kirchner & Akdere, 2017). The

U.S. Army starts developing soldiers immediately upon enlistment or

commission and continues until the member either retires or leaves the

service (Bailey, 2015; Department of the Army, 2020; Prewitt, 2020). Three

training areas, institutional, operational, and self-advancement, direct the

member development process (Bailey, 2015; Department of the Army, 2020;

Prewitt, 2020).

Each training area in the U.S Army reflects an extraordinary

commitment through the Army’s succession and development model for

future leaders. Armed forces’ succession or leadership advancement involve

an intentional, consistent, successive, and dynamic procedure grounded in

Army values (Bailey, 2015; Department of the Army, 2020; Prewitt, 2020).

The U.S. Marine Corps unlocks all Corps members’ potential with an

approach that embeds proper cultural practices and traditions into the very

fabric of its operation (Iraci, 2017). McEntire and Greene-Shortridge (2011)

emphasized that leaders’ development includes placing them in challenging

roles of responsibility, testing them, and promoting them. The Air Force,

Coast Guard, Marine Corps, and Navy underscore initiative advancement

comparably, and branch members are relied upon to keep a progression of

leadership standards and values of each branch (U.S. Air Force, 2015; U.S.

Coast Guard, 2007; U.S. Marine Corps, 2016, 2017; U.S. Navy, 2019).

Advancements in technology create opportunities for business leaders to

analyze their strategies for developing leadership and management

competencies in their employees. The wars in Iraq and Afghanistan forced

military leaders to amend training programs for their soldiers (Mahnken,

2020).

Large Businesses

Business owners may profit by examining how innovation and

advancement offer new procedures for their leadership or succession

programs. When a key leader unexpectedly resigns, retires, gets fired,

becomes seriously ill, or dies in a large business, having an active succession

plan prevents disruption to the organization. The first reason for small

business SP is survival (Ventura et al., 2020) The company’s board of

directors sets policies for corporate oversight and management, and it

represents the shareholders to ensure that the company’s future needs are

met (Whitler & Puto, 2020). A succession program is designed by human

resources management at the executive level to select a successor to ensure

that a business continues operating after the CEO is gone (Ridder, 2019). A

small business may cease to exist if the owner is no longer able to run the

business. Business SP is especially crucial for small businesses, as fewer

people are involved in the business, which means that fewer people are

available to take over vital job roles (Umans et al., 2020).

The second reason to have a succession plan is to eliminate confusion.

Most large businesses can continue to run, though not necessarily as

efficiently or profitably, if the CEO leaves (J. M. Lee et al., 2020). For small

businesses where family members make up the majority of the employees,

SP can make the estate distribution process run more smoothly and avoid

disputes between family members (Kaplan & Liberman, 2020). In larger

businesses, SP is less confusing and involves more of an effortless transition

between the leader and the successor (Beckhard & Dyer, 1983). Business

estate planning is an effective way to prepare for end-of-life issues,

eliminating confusion and stating in writing the small business final

directives for the business, including who is the successor (Neller et al.,

2022).

The third reason to have a succession plan is to identify qualified

leaders. Through a business SP process, company leaders can identify the

positions most critical to the company’s future success and pinpoint possible

candidates who have the skills, values, and desire to take on these roles. SP

efforts for a small business should include considering which family

members have the time and capability to run a business (LeCounte, 2020).

Larger businesses may need to take a more in-depth approach to ensure that

the successor selected has the necessary industry expertise (Rothwell et al.,

2015).

The fourth reason to have a SP is that once a successor is selected, any

necessary training to help ensure that the individual is ready to take on the

specified role can begin. The business SP process will help business owners

identify possible competency gaps and groom the successor for their future

leadership position (Gabriel et al., 2020). Training for a smaller business

might mean on-the-job training or job shadowing for some time

(Panagiotakopoulos, 2020). The resources and funding and resources needed

to encourage more in-depth training are found in a larger business in the

form of professional job coaching, mentoring, or a gradual increase in

advanced responsibilities (Olivier & Trivedi, 2021).

The fifth reason is to reduce expenses. Making jobs publicly available

is not necessarily a legal requirement for most employers, but external job

postings will help avoid the appearance of favoritism or unintended

discrimination. Hiring an external candidate can be both time-consuming

and costly when considering advertising, training, and evaluation expenses

(Galbraith et al., 2012). SP for small businesses will reduce expenses by

allowing an established employee to learn a new skill set and grow into a

leadership role (LeCounte, 2020). When it comes to larger businesses, SP

boosts employee retention and allows current employees to rise on the career

ladder (Wassell & Bouchard, 2020).

The sixth reason is to preserve the company’s brand. A company’s

brand and reputation play a vital role in its performance over time (Banerjee

et al., 2020). Hiring an individual unfamiliar with the company to step in as

the successor is a mistake many companies make. The person may not fully

recognize the company’s fundamental mission and values, which could taint

its brand in the eyes of clients and customers (Beatty & Zajac, 1987).

Preserving brand awareness is vital for both small and large companies who

want to continue building their business (Fong et al., 2020).

As businesses are sold, reorganized, restructured, and merged,

leadership change occurs (Argus & Samson, 2021). One of the challenges

for the survival and longevity of a business is the constantly changing

environment (Bövers & Hoon, 2021). One fundamental executive change

can trigger leadership succession and put the business and leaders in a

continual state of change (Farah et al., 2020). Business stakeholders (i.e.,

boards, investors, employees, and customers) count on the accomplishments

and talents of an incoming leader to lead their business forward (Potts,

2016). Potts (2016) stated that corporate boards, investors, and senior

management alike all count on the talents and accomplishments of an

incoming leader to lead their business. There is pressure for the leader to

demonstrate results quickly (Goleman, 2017). The cost of failure and lost

productivity, recruiting expenses, compensation packages, and signing

bonuses can add up to millions of dollars. Unfortunately, 40% of executives

in new roles fail in the first 18 months (Douglas, 2014).

The succession process in an organization, if strategically designed, is

an effortless transition. Rouse and Ross (2018) stated that the process should

reinforce the organization’s values and characteristics that distinguish from

its competitors. Leadership transition or succession in an organization should

appear as an event that is greater than its choice of the next leader (Martin &

Samels, 2004). Without careful planning, the transition may put an

unnecessary financial strain on the organization plus adversely affect and

increase demands on existing personnel (Ritchie, 2020). If the transition

period is managed and well organized, the organization can stay united and

vibrant throughout the process. A transition can be a time for assessment and

reflection that allows for preparation and growth under a new leadership.

Small Business Organization Economic Impact

Small businesses are a catalyst for long-term economic development

stability. Since the Great Recession, researchers recognized small businesses

as the backbone of urban economies (Zeuli & O'Shea, 2017). Developed and

undeveloped nations depend upon the resourcefulness and creativity of small

and medium enterprises to spark and sustain the process of economic growth

(Ahmed et al., 2015; Taiwo et al., 2013). Small businesses perform vital

support to the economy with efficiency, innovation, competition, and

employment (Ahmed et al., 2015; Rantšo, 2016; Saleem, 2017). Several

variables affect the impact of small businesses on economic development

(Ahmed et al., 2015; Zhang, 2017). These factors include job creation,

uncertainty, competition, technology, and leadership.

The creation of jobs depends on the success of small businesses.

Bowman and Wyer (2022) stated that more than 99% of the United States

businesses are classified as small businesses. According to the SBA (2019),

small businesses play a significant role in creating employment

opportunities. U.S. small businesses encompass more than 30 million private

companies, which are the conductor of financial development and job

creation, making about two out of each three new job openings in the United

States and employing a large portion of the country’s workforce (SBA,

2019).

In addition to the SBA, the Small Business Development Centers

(SBDC) and the Small Business Institute (SBI) help small businesses by

providing resources through a nationwide network of educational service

centers. The SBI’s mission is to be the leading professional development

provider for those involved in experiential understudy group counseling and

related enterprise training, research, and exercises (SBI, 2021). SBI is the

connection between business, training, and network (SBI, 2021) the mission

of the SBDC is to assist with small and medium business assistance with

business management in this manner, adding to the development of the

neighborhood, state, and national economies (Rolleri et al., 2016).

However, because of economies of scale, small businesses experience

periods of losing competitive advantage at the local level because they are

unable to compete with larger firms (Ambrose et al., 2019). In the face of

competition, a small business must be innovative, i.e., willing to do things

differently. Many businesses fail because of the lack of the owner-manager’s

understanding of competitive threats, the anticipation of changing

environments, and long-term sustainability awareness of market competition

and (Bergen & Peteraf, 2002; Bressler, 2012; Porter, 2008).

Consumers do not comprehend why a smaller business charges more

for a comparable item sold by a larger organization. Larger organizations’

costs are lower because they are producing more merchandise than the

smaller organization can produce during the same period. The expense per

unit relies upon how much the organization produces (Byun et al., 2020).

While a few retailers effectively rebuilt or transformed their businesses to

adjust to the quickly changing retail landscape, numerous brick-and-mortar

retailers were at risk or slow to transform (Helm et al., 2020). Local small

businesses in 93% of U.S. counties are vulnerable to not fully recovering and

are still struggling since the minirecession in 2016 (Morath, 2016).

Consumers’ online purchases, slow economic growth, and increased

competition in local markets affect small businesses within and outside their

community. Giaglis and Fouskas (2011) and Saridakis (2012) described that

few researchers looked at the impact of business leaders on perceptions of

sustainability in the face of competition and entrepreneurial activity. In

addition to job creation and competition, uncertainty affects the impact of

small businesses on the economy.

A small business should prepare to adapt to complex and disruptive

situations such as technological advances, a pandemic, demands for social

distancing, Brexit, or a natural disaster. According to the Federal Emergency

Management Agency (n.d.), 4060% of small businesses close permanently

after a disaster. Of the businesses closed for at least 5 days, 90% fail within a

year. Etemad (2020) reported that small enterprises must be open to

innovative approaches to prevent a crippling economic impact. In terms of

output, consumption, and investment, social distancing may result in

substantial economic costs and cause a business to close (Bodenstein et al.,

2022). Lipinska and Orak (2020) pointed out that when citizens of the

United Kingdom (U.K.) voted in favor of leaving the European Union, also

known as Brexit, uncertainty slowed down the U.K. economy. Shifting

expectations and increased and constant uncertainty about the future course

of the Brexit agreement can affect an economy, even before an actual change

in policy occurs (Lipinska & Orak, 2020). Outcomes from extraordinary and

unique challenges are unpredictable.

Even if economies of scale are disruptive and uncertainty arises, a

small business can survive with TL. New leaders can develop within the

organization’s succession program. Leadership styles in small businesses

significantly impact organizational profitability and support positive and

strong relationships with employee effectiveness, satisfaction, and creativity

(Afsar & Masood, 2018; Aga et al., 2016; Gross, 2016; Valdiserri & Wilson,

2010). Thibault et al. (2019) reported that employees benefit from

transformational supervision through various positive constructs, such as

happiness, psychological well-being, and physical health. A small business

may face economic hardship and fail despite previous financial success if

there are no transformational and organizational leaders.

Small Business Success and Failure

An extensive amount of research literature addresses the reasons for

small business failure. SBOs need to perform an internal audit of the

businesses as one of their strategies to protect the viability of the company’s

existence (Rolleri et al., 2016). According to the White House Office of

Management and Budget (2018), each year small businesses are helped with

numerous resources from the federal government.

SBOs start business ventures to produce economic wealth and gain

independence. However, small businesses often fail (Fiore & Lussier, 2009;

Lussier & Corman, 1996; Lussier & Pfeifer, 2000, 2001). Two examples of

small business failure are discontinuance of proprietorship (when business

possession changes) and business discontinuance (Mazzarol & Reboud,

2020b). Ownership change does not imply business failure because the new

owner may continue with the old business (Carter & Van Auken, 2006).

According to Watson and Everett (1996), discontinuance may imply failure

since business assets may have been reallocated to progressively profitable

business divisions. Headd (2003) argued that discontinuance might not be

related to the failure. Numerous small firms planned for an exit strategy even

though they are financially solvent. Additionally, a business owner can sell a

business much more successfully when the business is financially solvent.

Raj and Srivastava (2017) described TL as key to enhancing an

organization’s innovativeness to secure a sustainable competitive edge.

While OL is a factor in strengthening an organization, leadership capability

and organizational innovativeness are also key (Soomro et al., 2020).

Leadership capability and organizational innovativeness are substantial for

the success of a small business (Aminova & Marchi, 2021). Without the

right combination of leadership capability and organizational innovativeness,

a small business may fail.

Small business failure and bankruptcy involve stakeholders,

employees, customers, suppliers, family, friends, and owners. Small business

failures and bankruptcies threaten the U.S. economy (Carter & Van Auken,

2006). A typical SBO begins a start-up with high expectations. Every year in

the United States there are over a half-million new companies, and a similar

number fail every year (SBA, 2019). Michael and Combs (2008) concluded

that without the right leadership, proper planning, research, finances, SP, and

an exit strategy, a small business venture is likely to fail.

Family-Owned Small Businesses and Succession Planning

SP is one of the critical decisions a SBO will make after writing their

business plan, mission, and vision statements in planning for the business’s

longevity. CEO succession is crucial in small businesses. The business’s SP

impact is immediate in smaller businesses than in larger businesses, mainly

because of organizational constraints in larger businesses (Johnson et al.,

2018). Research of CEO transition, business continuation, and SP are critical

(Brockhaus, 2004; Lansberg, 1988; Lu et al., 2022; Sharma et al., 2001;

Wang et al., 2004). The concern over the lack of SP is less prevalent in small

businesses than in large businesses (Fernández-Aráoz et al., 2015). SP in a

family-owned small business is vital for operating successfully and

continuing longevity.

A family business is owned and managed by one or more family

members (Dettori & Floris, 2022). Succession is the optimum test of success

reflected in business sustainability when a business changes hands from a

family leader to a nonfamily leader (Nandi et al., 2019). Family-owned

businesses differ from other businesses because of the uniqueness of

ownership, leadership, management, and family relationships (Collins &

Porras, 1991; Miller & Le Breton-Miller, 2005). Handler (1989) defined a

family business as individuals from the family influence all the plans and

decisions for leadership, SP, and management choice. Another definition of

a family business is passing the control and management from one

generation to the next generation within a family (Magrelli et al., 2022). SP

in small family-owned business may have some challenges.

One issue that family businesses face is succession (De Massis et al.,

2008; Handler, 1994), which is one of the most researched areas of family-

owned businesses (Bird et al., 2002; De Massis et al., 2008; Zahra &

Sharma, 2004). The goal for family businesses is a successful

intergenerational transfer or succession. Achievement of this goal is helped

or hindered by interpersonal trust between family members (Bell, 2019).

Knowledge transfer has a vital role in the succession process. Family

owners are critical drivers of firm behavior and performance (Villalonga &

Amit, 2020). While some privately run companies benefit from information

from the family members working within the business, other companies see

the need to build knowledge relationships more extensively. Owners in

general, and the controlling family’s social foundation specifically, may

impact nonfamily information use and ensuing ramifications, which may

hinder the succession process (Wasim et al., 2020). A family-owned

business faces a unique challenge.

In a family-owned business, decisions surrounding succession are

problematic and demand considerable time (Handler, 1994; Ramadani &

Hoy, 2015). The succession procedure’s unpredictability is self-evident since

most family-owned organizations experience difficulty getting past the

initial few years (Handler & Kram, 1988). Only 33% of family-owned

companies survive the first generation, 12% into the third generation and

only 3% into the fourth generation and beyond (Chiang & Yu, 2018; P. S.

Davis & Harveston, 1998; Lambrecht & Donckels, 2008; Mazzola et al.,

2006; Miller et al., 2003; Ward, 1997).

Research into SP for small businesses, including family businesses,

can provide guidance. Churchill and Hatten (1987) developed a four-stage

succession plan for family businesses. The first stage is owner management,

where only the owner is involved in the family business. The second stage is

the training and development, during which the successor starts to learn the

family business. The third stage is where the successor and predecessor

develop a working relationship. The fourth stage is the transfer of power

from the predecessor to the successor.

Longenecker and Insch (2018) created a model that has succession

divided into seven decision stages. The first three stages include the

prebusiness stage, the introductory stage, and the introductory functional

stage. The first three stages cover before the family member is aware of the

business, the second stage covers the family member becoming aware of the

business, and the third stage includes the family having contact with

members of the organization. The next stages are when the successor enters

the organization part-time in the introductory functional stage. The

functional stage begins when the successor becomes full-time in the

organization. When the successor takes a managerial position, the fifth stage,

the advanced functional stage begins. The sixth stage begins when the

successor becomes the general manager and enters the early succession

stage. The seventh and final stage is when the successor matures and

becomes a leader (Longenecker & Insch, 2018). Accordingly, business

owners must focus on strategic planning.

Small Business Owner Strategies

SBOs need to develop or adapt strategies in their business to succeed.

Lechner and Gudmundsson (2014) stated that a small business is vulnerable

to survival at the beginning phase. Lechner and Gudmundsson emphasized

that SBOs need to develop effective business strategies from the start. The

owner or CEO required defensive and aggressive business strategies to

significantly return on the investment to the business (Porter, 1980). Without

effective business strategies, a small business will likely fail within the first

5 years.

SBOs who take the time to plan and develop a good business plan

increase their chance to succeed. Karel et al. (2012) researched and

documented the beneficial effects of strategic planning and overall

performances of over 677 small- and medium-sized enterprises’ overall

performances. Karel et al. found that companies without a written business

plan results were lower than those with well-written strategic plans.

Eddleston et al., (2013) found that SBOs who had either a weak or no

business plan experienced significantly higher failures than those who

developed and updated their business plans. Eddleston et al. also found that

the growth of a business in the first generation were positively impacted by

strategic management. A SBO must take the time to develop appropriate

strategies.

The SBO who invests the time to develop and strategically plan will

integrate contingency policies. Researchers reported that SBOs using

strategic goals must formulate and revise business goals to guide their

business through variable and uncertain conditions (Eddleston et al., 2012;

Karel et al., 2012). An organization’s leadership determines the

organization’s longevity by being open minded and transformational

(Deinert et al., 2015). A transformational leader can inspire an organization

in the direction needed to meet the strategic goals.

Expertise and Education

Education and experience are essential for obtaining a job. Education,

experience, and expertise are vital to the success of a CEO or SBO

(LeMieux, 2020). LeMieux (2020) stated researchers from the CEO Genome

Project analyzed 2,600 CEOs in depth and concluded that education,

especially a college degree, does not guarantee success. The Genome Project

researchers also found that 8% of the CEOs did not complete college

(Powell et al., 2018). Previous empirical researchers revealed that CEOs with

an MBA do not perform any better than CEOs without an MBA or another

advanced degree (Nakavachara, 2020). B. M. Bass and Avolio (1994) stated

that previous research suggested that transformational leadership is at the

center of a leader’s understanding of organizational change and

effectiveness. Transformational leaders are high performing individuals.

Transformational leaders have certain leadership traits in common.

According to Botelho et al. (2018), there are three ways CEOs without a

college degree overcame the odds and transformed themselves. First, rather

than pursue a college education, CEOs worked in the industry to gain in-

depth knowledge and cultivate relationships (Botelho et al., 2018). Second,

other CEOs without a college degree embellished their achievements and

touted these results to get hired (Botelho et al., 2018). Third, other CEOs

without a college degree embellished their achievements and touted these

results to get hired (Botelho et al., 2018). Third, the CEO was a talent

magnet (Botelho et al., 2018). Some CEOs without degrees were also

humble and, regardless of status or rank, solicited ideas and proactively

surrounded themselves with a team of strong talent and expertise (Botelho et

al., 2018). In contrast to TLT and OLT, two widely accepted economic

theories on education are human capital and signaling theories.

Education helps improve human capital. Under the human capital

theory (HCT), Becker (1964) viewed the HCT as education that helped

improve human capital. Human capital is the stock of characteristics, skills,

and knowledge contributing to the worker’s productivity. Signaling theory

clarifies how signals are used to lessen data asymmetry between two groups

(Spence, 1973). Human capital is the stock of characteristics, skills, and

knowledge contributing to the worker’s productivity. Whereas under the

HCT, an individual may choose to invest in an expensive education to

improve their human capital, become more productive, and earn higher

income (Yin et al., 2020). Additionally, while education is essential, it is not

the determining factor for a SBO or a CEO’s success (K. Yin et al., 2020).

True success for a SBO or CEO is not a combination of education,

experience, and expertise, but having business survive and thrive.

Human Resources Management

Past researchers have shown the significance of human resource (HR)

practices in improving organizational outcomes and retaining employees.

Mulabe (2013) investigated the impact of strategic HR practices on

employee retention and satisfaction. Mulabe found a statistically significant

positive effect on human resources management. By utilizing effective HR

strategies, small businesses can create social change by operating stable

businesses, developing local economies for individual and community

prosperity, and reducing failure rates (Oriaku, 2012). There is a connection

between HR departments and small businesses that close within their first 5

years.

Some small businesses that closed within their first 5 years may have

experienced failures within their HR departments. SBOs must assess the

management styles and analyze changes in HR intended to sustain their

small businesses past the 5-year point (Albuquerque et al., 2016). Small

businesses are essential for job creation, innovation, competition, economic

growth in the United States, and to improve the quality of life within the

communities they serve (Shukla & Shukla, 2014). Additionally, some SBOs

lack the TL ability or capacity to create successful strategies to sustain their

business.

Transformational leaders motivate trust in employees.

Transformational leaders inspire and motivate their followers to envision a

promising future that challenges the status quo (O’Reilly & Chatman, 2020).

According to Marques (2021), traditional transactional leaders measure and

evaluate organizationally. Marques concluded that measuring and evaluating

employee performance through control, supervision, and analysis often led

to ineffective leadership practices. Seventy-five percent of U.S. SBOs fail to

implement effective HR methodologies for sustaining their small businesses

(SBA, 2020b). Insufficient utilization of HR methodologies brings about

50% of small business closing within 5 years (Albuquerque et al., 2016). A

transformational leader would seek to have a sound HR structure in place.

A sound HR structure allows the transformational leader to operate

within established guidelines. A significant relationship is evident between

the leadership and organizational structures in a company. HR is essential in

managing leadership functions (L. S. Lee & Green, 2015). A leader’s

performance and behavior dictate how negatively or positively the

subordinate organizational members respond to changes (Deinert et al.,

2015). How an organization is structured reflects an organization’s culture

through practices, qualities, and standards that characterize employees and

leaders’ manners. Managing an organization’s structure is vital for

facilitating organizational change (Goetsch & Davis, 2014). L. S. Lee and

Green (2015) supported the concept that the effective management of a

company’s structure is essential for HR management of employee

performance. SBOs must partner with HR in meeting customer expectations

and market needs.

HR supports innovation because of the continually changing

environments within an organization. SBOs must be involved in the future of

the organization plan, support the managers, and foster the appropriate

culture to allow for innovation (Maier et al., 2014). Relating to a leader’s

personality, Deinert et al. (2015) explored how transformational leadership

components link to a leader’s performance and personality. SBOs must hire

innovative people and identify leaders and talent to facilitate creating new

ideas, products, and services to help the company remain competitive

forward to be successful in innovation (Longenecker & Fink, 2013). HR,

through staffing, can help a small business gain a competitive advantage in

areas such as staffing for success, talent development, progressive HR

thinking, planning, fostering an ethical culture, appraisal systems, aligned

compensation, results-oriented performance management, and incentive

systems (Longenecker & Fink, 2013). It is essential to take HR past

authoritative exercises to improve a business’s capacity and create a

competitive advantage through its people, leading to more reliable company

performance and greater use of HR assets (Maier et al., 2014).

Process of Succession Planning

SP is designed to transfer either business control through managing

day-to-day operations or ownership through estate planning, or both.

Rothwell (2001) characterized SP as a methodical and intentional effort by

an organization to guarantee the progression of leadership in key positions

by encouraging individual advancement, development, and retention, and by

retaining hold and creating scholarly and information capital. Senior leaders

in 21st century organizations endorse SP because the business or

organization’s survival depends upon having the right people trained at the

right time who will be able to step into vacant positions when they arise

(Longenecker & Insch, 2018). In a small business, whenever a family

member is not identified as the successor, new leadership may come from

internal employees or external sources.

In contrast to a small business, in larger businesses human resources

management personnel identify potential candidates for management and

leadership roles before openings occur (SBA, 2020c). A small business is

severely impacted if a trained and capable successor is unable to seamlessly

step into a key leadership role. A review of SP's origins by Fayol (2016)

indicated that SP is a viable strategy for encouraging individual

advancement, development, and retention and retaining family ownership,

and creating scholarly and information capital.

Much of the early literature on SP focuses primarily on senior

management succession. Fayol (1916), a French pioneer of management

history, developed the early history of modern SP. Fayol saw the need to

develop and implement SP within an organization (Wren et al., 2002). Fayol

advocated that the long-term stability of tenured employees was the

managers’ responsibility, and if ignored, ill-prepared employees would fill

critical positions. Furthermore, Fayol claimed that organizational strength

lies within its people, and when people become more skilled and prepared,

the organization benefits. With senior management or the CEO’s succession

as the focus, early research mostly took case studies on a particular leader or

company (Gouldner, 1950; Whyte, 1949). Later work was more empirically

based (LeCounte, 2020).

Organizational and Transformational Leadership

A review of OL and TL will disclose ways small businesses can

successfully use these theories to plan and improve SP for their business. OL

is vital for long-term success (Tortorella et al., 2020). Consequently,

researchers investigate and try to comprehend why a few organizations are

more successful at learning than others (Bianchi et al., 2022). SBOs also

need to plan for the retirement of baby boomers, manage new authoritative

structures, and market issues that will prepare their business to continue for

the next generation of owners.

OL is not a solitary organization process. OL consists of various,

unmistakable subforms that happen at various hierarchical levels and

settings, e.g., at the individual, group, and organizational levels (Berson et

al., 2006; Crossan et al., 1999; Huber, 1991). Researchers deemed it

necessary to comprehend each OL subprocess effect, particularly as these

procedures can improve organization financial results, performance, and

competitive power (López et al., 2005). Burns (1978) described the

establishment of the TL theory and Bass and Avolio built on Burns’s work

in 1996 and 1997.

Burns (1978) addressed three principles shaping TL theory: power,

purpose, and relationship. In TL, leaders use their capacity to improve

communication with their followers and comprehend their objectives and

necessities. Purpose describes the leader’s desire to assist their followers in

reaching professional and personal achievements and centers around

building up an exceptionally motivating relationship. The leader encourages

followers through motivational and elevating conduct (Burns, 1978).

Leaders who bought into the TL style grasped the job of an educator and

affected the worth compass of the supporter (Burns, 1978). An expansion of

this prior work by B. M. Bass (2007) included four components of TL:

idealized influence, intellectual stimulation, individual consideration, and

inspirational motivation. B. M. Bass subdivided idealized influence impact

into two extra parts of admired characteristics and romanticized practices. B.

M. Bass defined idealized influence as having transformational leaders who

carry on in a manner that results in a good role model for their followers.

Transformational leaders are appreciated, regarded, and trusted. Followers

relate, identify, and want to emulate transformational leaders. Additionally,

transformational leaders encourage creativity and innovation and problem-

solving and critical thinking through intellectual stimulation. Intellectual

stimulation also represents a vital part of transformational leadership (B. M.

Bass, 2007).

Individualized consideration is when transformational leaders exhibit

concern for their followers’ feelings and needs, which is a critical

component in drawing out the absolute best endeavors and building up the

followers’ potential leadership (B. M. Bass & Avolio, 1997). Inspirational

motivation is the leader’s ability to inspire a sense of purpose, motivation,

and confidence in followers. The transformational leader must communicate

the vision for the future, the expectations of the group, and exhibit a

commitment to the organization’s goals (B. M. Bass & Avolio, 1997). B. M.

Bass and Avolio (1997) subdivided idealized influence impact into two

additional parts, admired characteristics, and romanticized practices. A

transformational leader may also be charismatic.

Charismatic leaders are also transformational leaders. Warren Bennis

referred to TL as charismatic leadership (Berendt et al., 2012). Bennis

disclosed several characteristics, including lowliness, relentlessness,

respectability, quality, innovativeness, advancement, and motivation as

essential traits of the transformational leader (Berendt et al., 2012). Adoption

of this initiative style could bring about the production of enabled leaders

and followers through the development of essential cooperation (Burns,

1978). Enabled employees may perform and learn at a significant level that

subsequently upgrades business execution (Carmeli et al., 2011).

Mission and Vision Statement

Small and medium businesses frequently are portrayed by stable

entrepreneurial leadership. However, as a small company develops and

grows, there is an expanding requirement for a formal structure (Dobbs &

Hamilton, 2007). A company’s mission statement distinguishes its business

from its competitors, exemplifies its business theory, and mirrors the picture

it tries to extend. The mission statement answers what business is it in and

what is its reason for being (Stephens & Martin, 2019). Without a written

clear and concise mission statement, a company risks entering an area of

business saturated by competitors (Amoatey & Hayibor, 2017). A written

mission statement forces the SBO to think about what they are doing and

where the organization is going (Huang & Hands, 2022).

Vision and mission statements are a critical part of strategic

management for different kinds of organizations, whether a large, small, or

medium organization (Darbi, 2012). According to Hall (1993), to ensure a

clear focus and direction for a small business, the owner-manager should

consider developing a clear vision and mission. SBOs need to understand

their core skills and identify the vital resources needed for their business

success. A successful SBO can quickly identify opportunities and access the

environment and threats that may emerge. Vision and mission statements

impact the performance and strategic goals of the organization. SBOs need

to understand and have a clear idea of where they are going, why they are

going there, and how to get to wherever they choose to go (Mazzarol &

Reboud, 2020b). Mullane (2002) found that vision and mission statements

are significant for everyday operations.

Baby Boomers’ Retirement

The retirement of baby boomers will significantly affect both private

and public businesses, and it is critical to comprehend the paths the workers

will pursue. Work markets of the future will rely on the older workers’

course of action before retirement.

The exodus of older workers could trigger a massive loss of information,

making the transfer of information for the next generation to follow essential

(Pyper & Giles, 2002). SBOs need a combination of OL and TL.

Business Exit Strategy

Before a business begins, a mission and vision statement and a

business exit strategy should be written. The SBO needs to have a clear

vision of where, why, and how to plan for their business to be successful

(Mazzarol & Reboud, 2020a). Each business owner should develop an exit

plan (Morris et al., 2020). Exit planning in business means something

different to each business owner in terms of what is required to obtain

business independence (O'Hara, 2017). A business owner should realize that

developing a business exit strategy is critical at its inception.

Small Business Owner Strategies and Succession Planning

SBOs need to develop or adapt successful strategies in their

businesses to succeed. Lechner and Gudmundsson (2014) stated that a small

business is vulnerable for survival during the beginning phase. Lechner and

Gudmundsson emphasized that SBOs needed to develop effective business

strategies from the start. The decision makers, i.e., the owner or CEO,

require defensive and aggressive business strategies to make a significant

return on the investment from the business (Porter, 1980). Without effective

business strategies, a small business will likely fail within the first 5 years.

SBOs who develop a good business plan increase their chance to

succeed. Karel et al. (2012) researched and documented the beneficial

effects of strategic planning on the overall performance of 677 small- and

medium-sized enterprises. Karel et al. found that companies without a

written business plan were not as successful as those with wellwritten

strategic plans. Eddleston et al. (2013) found that SBOs who had either a

weak or no business plan experienced significantly more failures than those

who develop and update their business plans. Eddleston et al. found that the

growth of a business in the first generation was positively impacted by

strategic management. A SBO must take the time to develop appropriate or

suitable strategies for their business.

The SBO who invests the time to develop strategically will integrate

contingency policies. Researchers reported that SBOs using strategic goals

must formulate and revise business goals to guide their business through

variable and uncertain conditions (Eddleston et al., 2013; Karel et al., 2012).

An organization’s leaders determine the organization’s longevity by being

open minded and transformational (Deinert et al., 2015). A transformational

leader can inspire an organization in the direction needed to meet the

strategic goals.

Resistance to Change

Changes in an organization are needed when the business goals are not

achieved. With the change, resistance often surfaces within the organization.

Resistance to change impedes progress (Lorenzo et al., 2022). Leaders’

failure to engage stakeholders (i.e., employees, customers, investors, and

suppliers) contributes to resistance to organizational cultural changes (Grol

& Wensing, 2020). Humphreys (2001) confirmed that transformational

leadership successfully utilized developing patterns and advances towards

transformative change. Moreover, successful organizational change involves

increased sensitivity toward change processes and practices (Waddell et al.,

2019).

Transformational leaders can inspire change with little resistance.

Transformational leaders plan consistency within an organization to

gain buy-in from key stakeholders. Anderson (2019) proposed an

investigative way to deal with change by examining change initiative

processes instead of the product or result alone. Resistant managers prevent

needed cultural shifts from taking place in business. In addition, Plank and

Eneroth (2019) noted that resistance to change makes managers less

responsive and forget the customer’s voice.

Typically, a transformational leader would act quickly to decrease

negative responses to change within the organization. Anderson (2019)

proposed that leaders should proactively identify and respond to obstacles,

such as resistance to change, that negatively affect the change process.

Transformational leaders would work to ensure that changes in the

organization are handle in phases. Anderson identified four phases of the

change process: (a) mapping of work processes and organizational culture,

(b) identifying pitfalls and bottlenecks and pitfalls in the value stream, (c)

measuring activities for the selected bottlenecks and pitfalls, and (d)

targeting the implementation and continuous evaluation of measures

selected.

Change is difficult for many reasons. On one or multiple levels, some

of the most common fears are experiencing a loss of control and power,

coping with uncertainty, and anticipating more work (Goetsch & Davis,

2014). Regardless of the fear involved, fear of change is detrimental to the

business process (Lorenzo et al., 2022)

Transition

Section 1 provides a background of the business problem, followed by

a discussion of the problem and purpose statements, the nature of the study,

research questions and interview questions, conceptual framework,

operational definitions, assumptions, limitations and delimitations, and the

significance of the study. The second element of Section 1 includes the

semistructured interviews of SBOs in the Washington, DC/Baltimore, MD

metropolitan area who have successfully operated a small business for at

least 5 years and have implemented a successful succession plan. The third

element of Section 1 also includes a review of the professional academic

literature, details on organizational learning theory and transformational

leadership theory, the conceptual framework chosen for the study, including

its history and applicability to SP.

Section 2 includes a detailed discussion and validation of the research

process and procedures applied to the study. I discuss the researcher’s role,

the criteria for selection of participants for the study, the research method

and design, and the population and sampling. I explain the data collection

instrument, data collection technique, data organization technique, data

analysis, reliability, and validity strategies employed for the study.

Section 3 will contain the research results, analysis and discussion of

the findings, and conclusions derived from the process. I will discuss how

the research conclusions apply strategies SBOs use to develop an effective

succession plan to sustain business profitability for the next generation of

owners. I will also discuss the implications for social change,

recommendations for future research, and conclusions.

Section 2: The Project

In Section 1, I provided detailed discussion and validation of the

research process and procedures applied to the study. In Section 2, I discuss

my role as the researcher, the criteria for selection of participants for the

study, the research method and design, and the population and sampling. I

explain the data collection instrument, data collection technique, data

organization technique, data analysis, reliability, and validity strategies

employed for the study.

Purpose Statement

The purpose of this qualitative case study was to explore strategies

that SBOs use to develop an effective succession plan to sustain business

profitability for the next generation of owners. I collected data by

interviewing seven small-size business owners in the Washington,

DC/Baltimore, MD metropolitan area who had been in business more than 5

years and had implemented successful succession plans for transitioning the

business to a second- or third-generation owner and achieving sustained

profitability. The implications for positive social change include increased

revenue for businesses that may lead to the creation of job opportunities and

improvement of the livelihoods of local communities’ citizens and families.

Role of the Researcher

As the researcher, I was the primary data collection instrument. I

conducted my study in the Washington, DC/Baltimore, MD metropolitan

area. Qualitative research consists of the interpretation, analysis, and

collection of narrative and visual data to understand a particular

phenomenon of interest (Bloomberg & Volpe, 2018). Based on Raglan and

Schulkin’s (2014) recommendations, I ensured trustworthiness in data

collection by completing the Collaborative Institutional Training Initiative

(CITI) Doctoral Student Researcher course (see Appendix A). I did not

conduct the study in any of my previous or present workplaces. Being a baby

boomer, I used bracketing to eliminate any bias related to this identity and

the experiences that came with this identity. Sorsa et al. (2015) defined

bracketing as researchers not using their previous bias or knowledge when

researching a phenomenon.

I maintained clear expectations while remaining unbiased throughout

this study. I had no previous bias in understanding SP strategies and

sustained business profitability in small businesses. Researchers’ ability to

understand and accept their viewpoints and bias allow them to understand

other people’s views (Sinatra et al., 2014). I used appropriate interview

procedures with all participants (Rashid et al., 2019). The ethical standards I

used did align with the protocols described in The Belmont Report (National

Commission for the Protection of Human Subjects of Biomedical and

Behavioral Research [NCPHSBBR], 1979).

Participants

My data collection process followed a multiple case study research

design. Participants needed to meet the criteria of being a SBO for at least 5

years and having implemented a successful succession plan to participate in

this study. Researchers use multiple case studies to compare phenomena

across cases and determine if they are unique to one case or replicated across

other cases. A multiple case study sample, therefore, within- and across-case

analysis, offers more deeply grounded empirical evidence (De Massis et al.,

2008; Zainuddin et al., 2020). I selected multiple cases for (a) exacting

replication: considering expectation of comparable outcomes, (b)

hypothetical replication: differentiating results across cases, and (c) end of

elective clarifications (De Massis et al., 2008). I collected data by

interviewing seven small-size business owners in the Washington,

DC/Baltimore, MD metropolitan area.

The strategy for gaining access to participants was using professional

contacts, professional networks such as the Society for Human Resource

Management (SHRM), LinkedIn, Toastmasters International, and Google to

search for information regarding company owners and CEOs. Swauger

(2011) stated that initiating and maintaining a working relationship with

participants is critical in completing a qualitative study. My strategies for

establishing a professional working relationship with each participant

included ensuring that they were comfortable throughout the research

process and proactively using the ethics of care approach recommended by

Tiidenberg (2020). In addition, the participants understood my

responsibilities as the researcher and my principles throughout the process.

Research Method and Design

Research Method

The three research methods are qualitative, quantitative, and mixed

(Kang & Evans, 2020). The method of the study was qualitative.

Researchers use the qualitative methodology to explore what, how, and why

questions related to phenomena (R. K. Yin, 2018). R. K. Yin also stated that

unlike quantitative and mixed methods, using the qualitative method enables

a nonlinear exploration of a study’s central research question (R. K. Yin,

2018). Using the quantitative method requires the statistical analysis of

numeric data to test hypotheses concerning the significance of the

relationships among variables generated from an instrument administered to

participants (Tominc et al., 2018). The quantitative research method was not

appropriate for this study because I did not test the hypotheses to examine

the relationships among variables. The mixed method was not appropriate

for this study because there were no quantitative elements under study. A

qualitative multiple case study research design was appropriate for this study

because I explored the strategies of SP and the sustained business

profitability of seven small businesses.

Qualitative research entails an attempt to understand a phenomenon’s

perceptions based totally on participants’ experiences through an in-depth

evaluation of the research subject (DeJonckheere & Vaughn, 2019; Swift,

2022). Researchers have not used the qualitative approach in previous

empirical research when addressing strategies that SBOs need to use to

develop an effective succession plan to sustain business profitability for the

next generation of owners. I focused on exploring strategies that SBOs use

to develop an effective succession plan to sustain business profitability for

the next generation of owners. Researchers who use qualitative research can

look at an individual’s behavior descriptively (Willis, 2019). Exploratory

interviews embody questions that enable researchers to look at the main

points of a participant’s experiences (Brédart et al., 2014).

Research Design

I considered three qualitative research designs: (a) phenomenological,

(b) ethnographic, and (c) case study. R. K. Yin (2018) determined that a case

study can include a single case or multiple cases. Gioia et al. (2013) stated

that the qualitative case study research design involves an attempt to

understand a phenomenon, process, and experiences. When a researcher

studies a person or a group of people within one organization, a single case

study is appropriate (R. K. Yin, 2018). R. K. Yin (2018) explained that

researchers conduct multiple case study to analyze data across and within

situations. I selected a multiple case study research design within the

qualitative research methodology, which was appropriate for this study

because I explored the strategies of SP and the sustained business

profitability of seven small businesses.

I considered two other qualitative research designs: phenomenological

and ethnographic. Phenomenological research is used to describe how

people experience a particular phenomenon (van Manen, 2017).

Phenomenological research was not the optimal choice for this study

because phenomenological research includes exploring the meanings of

human encounters with a phenomenon as portrayed by various participants.

Ethnography is a technique used by researchers to study a group of

individuals in their regular setting over an all-inclusive period by gathering

information through interviews and observations (A. E. Bass & Milosevic,

2018). Because I did not study a cultural group in their natural setting,

ethnography was not appropriate. Through this doctoral study, I explored SP

in small businesses; thus, qualitative multiple case study research was the

appropriate research approach.

Data saturation in a qualitative study is reached when there is

sufficient data to reproduce a study, and any new data attained would not

affect the results. Hennink et al. (2017) stated that data saturation is the most

commonly endorsed assurance of qualitative rigor offered by researchers to

readers and reviewers. Researchers attain data saturation during data

collection when they generate no new data (Saunders et al., 2018). Hennink

and Kaiser (2021) stated that saturation is an essential concept because it

indicates data validity and is often included in criteria to assess qualitative

research quality. I achieved data saturation when no new themes emerged. I

interviewed participants until I achieved data saturation.

Population and Sampling

I used a purposeful sampling of participants. Researchers use a

purposive sample to obtain data that provide diverse perspectives that are

effective and accurate from identifying appropriate participants (Knechel,

2019). I targeted seven owners of successful small businesses that had

operated for more than 5 years and had implemented succession plans. I

explored their succession strategies to identify their solutions to help me

address the central research question.

The primary advantage of a small sample size is the use of open-ended

questions to allow researchers to obtain rich data (Young & Casey, 2019).

The sample quality is more important than the size associated with

quantitative methods and is the premise of qualitative exploration (O'Reilly

& Parker, 2013). Malterud et al. (2016) stated that the purpose of data

saturation in qualitative research is to answer the research question;

researchers should use a sufficient sample size to complete this task. I

continued to interview new participants until no new data emerged to

achieve data saturation.

R. K. Yin (2018) explained that the researcher may analyze and

collect data from several sources, including interviews and documents.

Using a case study design, I targeted conducting seven semistructured

interviews. The focus of subjective investigations is more on the nature of

the example than the size related with quantitative techniques (O'Reilly &

Parker, 2013). R. K. Yin (2018) found that when using a contextual

investigation plan, the researcher may gather information from a few

sources, including interviews and company documents.

The motivation behind information immersion in subjective

exploration in qualitative research is addressing the research question, and

researchers should utilize an adequate sample size to finish this undertaking

(Malterud et al., 2016). Darbi (2012) reported that data saturation could be

attained in a qualitative study with five to 50 participants. To reach data

saturation, I analyzed all of the data to ensure that the results would answer

the research question. I achieved data saturation when no new themes

emerged.

Ethical Research

The NCPHSBBR (1979) published The Belmont Report, which

established the research standards to protect human subjects in studies and

guide ethical principles with respect for the person, beneficence, and justice.

I gained approval from Walden University's Institutional Review Board

(IRB) before conducting any research to ensure participants’ ethical

protection and no maleficence. Because I conducted interviews with the

CEO or owner, I obtained permission from the CEO in writing (see

Appendix B). Once I received Walden IRB approval, I sent each potential

participant who met the study criteria a letter formally requesting their

voluntary participation in the study through an informed consent form based

on respect for persons, which is one of the three ethical principles described

in The Belmont Report governing human subject research about the informed

consent process (Barlow, 2020; Campbell et al., 2020). Each participant was

informed in writing and verbally that their participation was strictly

voluntary and that they could withdraw from the study at any time by

notifying me in writing or verbally that they wished to withdraw from the

study. Providing a small monetary gift may increase participants’

responsiveness and persuade participants who would not usually participate

to agree to an interview (Anderson et al., 2021). I did not offer any monetary

incentive for participants in this study to avoid the appearance of coercion.

Instead, I offered a summary of my study findings once completed.

The basis of participants’ ethical protection is their identity, and

information provided to a researcher is kept confidential (Brittain et al.,

2020). I discussed with participants the measures to ensure confidentiality. I

did not use participants’ personal information for any purposes outside this

research project. I did not include participant or organization names or

anything else that could identify the study report’s parties. I will store the

electronic information on a password-protected flash drive and will keep

documents related to the study in a locked file storage cabinet to which only

I will maintain access. Data will remain in these locations for at least 5

years, at which point I will destroy them.

Data Collection Instruments

I was the primary data collection instrument for my research study and

collected data through semistructured interviews. Before beginning the data

collection process, I obtained IRB approval and the consent of participants.

According to Anderson (2019), it is the primary data collector’s

responsibility to protect interview participants and the data collected by

obtaining the approval of a designated research ethics review before starting

to conduct research. I prepared for data collection by reviewing research

through interviews conducted by McGrath et al. (2019). McGrath et al.

explored how a novice researcher should conduct qualitative research

interviews.

The principal data collection technique was the use of semistructured

interviews. My goal was to produce accurate scientific inquiry results and

understand how my biases could influence me when I collected and analyzed

data. Research must be trustworthy and free of bias based on (a) credibility,

(b) transferability, (c) confirmability, and (d) authenticity (Kyngäs et al.,

2020). As a human instrument, I brought my assumptions, predispositions,

and beliefs to the research setting. To understand how to reduce bias in this

study, I reviewed the Peredaryenko and Krauss (2013) qualitative report to

understand how novice qualitative researchers gain interviewing experience

and conduct themselves as the primary research instrument.

A novice researcher’s challenge is not to allow interference with

understanding and studying the phenomenon of their beliefs, predispositions,

assumptions, and assumptions. Vu and Burton (2020) recommended that a

researcher use reflexivity and mindfulness to be present with attention,

acceptance, and awareness. Researchers use interviews to explore

participants’ experiences through a series of questions and answers

(Winwood, 2019).

I asked each participant nine open-ended questions during the video

conference or conference call interview. The interviews were semistructured,

and I used an interview protocol with predetermined questions and follow-up

questions. When the participant’s answers may not be evident in a

semistructured interview, the researcher must seek clarification (Rashid et

al., 2019). As the primary data collection instrument, I used openended

questions to gain insight and explore data not obtained from the close-ended

questions (Park et al., 2021). If a topic arises during an interview that the

predetermined questions do not cover but is relevant to the research, a

researcher can deviate from the predetermined questions to pursue the new

topic (DeJonckheere & Vaughn, 2019). The information gained from

interviewees’ responses may provide in-depth information on the

phenomenon. When researchers develop interview questions aligned with

the phenomenon under study, interviewees can expand on their experiences.

I used data from participants’ experiences to develop themes. Interviews

lasted between 30 and 60 minutes.

I allowed participants to expand on their responses during the

semistructured interviews. In the case of studies, the length of time for

interview sessions could change depending on participants’ responses during

each interview session (Amin et al., 2020).

The interview location and options used for video conferencing such

as Skype, Zoom, or Free Conference Call can also affect data collection;

therefore, the location or option to use video conferencing for this study was

convenient and comfortable for each participant. Kern (2018) noted that

participants are more likely to provide in-depth feedback when they feel at

ease. Participants in this study understood that they could speak freely about

their experiences in a safe environment. A researcher must inform

participants of the option to withdraw from the study if they feel

uncomfortable (Flick, 2018). I obtained permission from each participant to

audio record their responses for transcription to ensure the content’s

correctness. Obtaining consent to record ensures that participants approve

and are aware of all the data collection methods (Young & Casey, 2019).

In a qualitative study, researchers explore a research question from

various perspectives. I collected data to address the research question from

multiple data sources. Data collected included reviewing secondary data

sources, the literature, and data from participants’ responses to open-ended

interview questions. The secondary data sources included information from

public websites about the company, press releases, news articles,

government databases, and data from marketing materials located on public

websites. R. K. Yin (2018) recommended that researchers use a minimum of

two data sources in a case study. Goldkuhl (2019) affirmed that case studies

should have data collected using empirical research methods to generate

qualitative data by multiple means, including direct observations, interviews,

surveys, documentation, and historical records analysis. De Massis et al.

(2008) asserted that data validity is enhanced by using multiple data

collection methods, strengthening the findings, and understanding the topic

under study.

The use of multiple data collection techniques enhances small

businesses’ leadership ability (McGrath et al., 2019). Roberts (2020) stated

the semistructured interview process includes developing questions,

interviewing participants, and recording data. Therefore, I used

semistructured interviews to obtain descriptions of participants lived

experiences, enhancing the ability to explore and identify new conclusions

from the feedback provided in responses to open-ended questions.

I used a journal to take notes during interviews to ensure data

accuracy. Researchers take notes to eliminate interview bias, record

participant reactions, and minimize preconceptions (Bero, 2017; Rodgers &

Cowles, 1993). When there is a single opportunity to interview,

semistructured interviews are effective for researchers and participants.

Face-to-face interviews provide the ability to observe nonverbal

communication (Hellmann et al., 2020). However, because of the COVID-19

pandemic, I did not conduct face-to-face interviews. During interviews,

misunderstanding and research bias of data can distort the trustworthiness of

a research study (Johnson et al., 2020). To mitigate the potential for bias, I

avoided leading interviewees while taking notes and recording. One

drawback to the semistructured interview process is collecting a large

volume of information, which could be challenging to transcribe (Kern,

2018).

Data Collection Technique

I collected data from two sources, semistructured interviews and a

review of company documents, including the company websites. I conducted

semistructured interviews using nine open-ended questions (see Appendix

C) via Zoom, Skype, or phone because of the COVID-19 pandemic. During

each interview, I used the audio recording feature on my Google Pixel 5

Android phone, Rev Assistant Recorder software, and transfer the file via

email, save the recordings on my computer, and used if there are audio

difficulties. Lastly, a phone interview was the final option if a Zoom or

Skype interview is not possible. The disadvantage of the phone interview is

the inability to make eye contact and see the participants’ body language or

make eye contact. During phone interviews, observation is limited to

listening only. All interviews were only audio recorded using my Google

Pixel 5 Android phone and Rev Assistant Recorder software. The interview

recordings were transferred to my password protected computer and

transcribed so that keywords were annotated and then entered into the NVivo

12 qualitative data analysis software to identify common phrases and

themes. I conducted a comparison between interview responses and the

company documents that were reviewed. Guest et al. (2020) noted that to

determine data saturation, qualitative researchers use the comparison

method. Researchers can use information not retrieved during observations

or interviews to expand the data pool using archival documents (Subotić,

2020). Spangler et al. (2019) stated that researchers cross validate data

collected with other instruments using secondary data or archival documents.

Observation can help a scholar discover areas in which SBOs interpret

succession differently and triangulate the findings (Bernstein & Lysniak,

2018). The disadvantages of this technique include observations becoming

deceptive or biased. Saunders et al. (2018) stated that participants might alter

their behavior because of being under observation. Thus, researchers who

observe participants must limit distractions. Johnson et al. (2020) stated that

the interview protocol (see Appendix C) should consist of openended

questions varying to accommodate the interviewee. Therefore, I included

questions and varying degrees of adaptation to accommodate the

interviewee.

The interviews consisted of open-ended questions listed in Appendix

C. Each of the semistructured interviews incorporated open-ended questions

and lasted 30 to 60 minutes, which allowed the participants to respond in

depth and openly. During each interview, I observed nonverbal

communication and addressed each interview question so that the

participants have an opportunity to expand on their responses. Observation

of each participant enabled me to explore feedback and identify themes and

patterns. The objective of the semistructured interview process is to achieve

commonality, reliability, consistency, and transferability for future research

and researchers (Degeling & Rock, 2020; Korstjens, & Moser, 2018a). The

interview location could impact data collection; therefore, sites should be

convenient and comfortable (McGrath et al., 2019; Oltmann,

2016). All interviews will take place only by Zoom, Skype, or phone

because of the COVID-19 pandemic. I informed each participant in advance

of their choices before the interviews, ask each participant to choose a secure

and private place, and not schedule any other calls or meetings during the

agreed upon time. I also ensured privacy and security with each participant

before their interview by asking them to confirm they are at a private, secure

place free from interruptions.

After conducting semistructured interviews, I performed member

checking to provide a quality control mechanism to reduce misinterpretation

and enhance this research study's reliability and validity. Kahraman and

Kazançoğlu (2019) stated that the researcher is responsible for providing an

analysis for others to understand when comparing similarities among the

participants’ responses to the interview questions. Member checking will

also involve sharing my interpretations of participants’ responses to

interview questions with the participants and allowing feedback on my

perceived understanding of their responses. Researchers use member

checking to help confirm data saturation when no new themes emerge

(Candela, 2019). I was prepared to solicit additional participants after initial

interviews if data saturation was not achieved and continue interviewing

until data saturation is achieved.

R. K. Yin (2018) documented that a case study's ethos is to illuminate

decisions: how they were implemented and why they were made. My goal in

this qualitative case study was to illuminate, explore, and identify the

insights of SBOs who have operated a small business for at least 5 years

successfully and have implemented a successful succession plan strategy

focusing on why these decisions were taken. Rashid et al., (2019) noted that

data collected through semistructured, in depth interviews could produce

detailed descriptions by the participants in a qualitative case study research.

Data Organization Technique

The data sources included participants’ responses to the

semistructured interview questions, including all audio transcripts of

recordings from the interviews and the research notes created during data

collection (R. K. Yin, 2018). Secondary sources of data will include any

documents from the participants’ company websites. R. K. Yin (2018)

recommended that researchers create a master list of all audio files and

comprehensively catalog all documents to store and account for all research

material. I created and cataloged a master list of all audio files to account for

all research material.

I applied the following measures to secure the participants’ data. All

data are password protected and stored on a personal computer accessible

only by me. I treat all data as confidential and will store the data for 5 years,

and after which I will destroy all the data in one of the following ways: (a)

delete permanently all data stored on my personal computer, (b) all printed

materials will be destroyed by shredding, or (c) delete permanently all

emails sent to the participants by me from the email account and received

from the participants in the study.

Data Analysis

R. K. Yin (2018) described a methodology for analyzing data in

qualitative case studies including contextual analysis research plans and

precise exploration of the information from general to specific. R. K. Yin

stated that themes would constitute observable and identifiable patterns

through the analysis process. Based on Vaismoradi et al.’s (2013) research,

the data analysis process I compared and contrasted key themes that emerged

during analysis with secondary data, existing literature, and any new

additional peer-reviewed literature published after writing my proposal

through the lens of OLT and TLT in the conceptual framework.

R. K. Yin (2018) further stated that flexibility, while analyzing the

data, would shift from earlier developing themes to those formulated after

analysis. According to Kyngäs et al. 2020, continuous assessment of new

data with an exponential perspective is through inductive to deductive

analysis will allow for the constant evaluation of new data with an

exponential perspective. I used the combination of two methods because

they have similarities, qualitative content analysis (CA) and thematic

analysis (TA). This process was recommended by Kyngäs et al. (2020), Lim

et al. (2017), Vaismoradi and Snelgrove (2019), and Vaismoradi et al.

(2013). Both methods involve coding and codes.

CA was first introduced in 1952 by Berelson (1952) and further

developed in 1969 by Holsti (1969) as an alternative for social science and

humanities qualitative research (Kumar, 2018). Content analysis is based on

various subjects’ perspectives, interpreting opinions, and is one of the many

methods used in qualitative research that measures and quantifies patterns,

unlike statistical analysis, which measures and quantifies patterns. CA has

eight steps: (a) preparation of data, (b) defining the unit or theme of analysis,

coding scheme, (e) coding all the text, (f) assessing the consistency of

coding employed, (g) drawing inferences based on coding, and (h) drawing

inferences based on themes analysis.

TA was developed initially in 2006 for research in psychology by

Braun and Clarke for analyzing qualitative data (Byrne, 2022). The

researcher usually applies TA using a six-step process: familiarization,

coding, defining, naming, reviewing themes, and writing up to a set of data,

such as interview transcripts, and closely reviewing the data to identify

common themes. TA can also be adapted to many diverse kinds of research

because it is a flexible method.

Data collected in this study required analysis. To reduce the

complexity of the analysis and increase reliability and validity (Mortelmans,

2019), I used NVivo 12 computer assisted programs. Each program has

several features that the researcher can use to code and develop nodes,

including interpretations drawn from data into a visual presentation.

R. K. Yin (2018) related to qualitative research using a logical and

sequential approach progressing from general to specific, continuously

assessing manifest and latent results, analyzing data using triangulating

theories, and culling and coding keywords into emerging themes. I used R.

K. Yin's five-step data analysis methodology and pattern matching to

analyze the data. The first step consisted of compiling the data to develop

grouping. Step two required disassembling the data to eliminate and reduce

homogeneous themes of the phenomenon. Step three was reassembling the

data and cluster core themes. In step four I checked patterns against the

documents, reflexive journal, interview transcripts, and documents to

interpret the data's meaning. Finally, in step five, I summarized or concluded

the data into an individual structural description of the participants’

experiences.

I used NVivo 12, a computer assisted qualitative data analysis

software (CAQDAS), as a secondary method to simplify the process and

minimize human error as recommended by Dalkin et al. (2020). Multiple

analysis iterations of data collected may confirm data saturation when no

new themes emerge (Jones et al., 2020). Using various iterations will

produce scientific results from a qualitative research study by reinforcing a

systematic, iterative methodology (R. K. Yin, 2018). I used multiple

analyses of the data collected to confirm no new themes emerged using

NVivo 12 software to confirm data saturation.

Moon (2019) stated that methodological triangulation is one method

that helps researchers increase the validity, reliability, and legitimacy of their

research findings. R. K. Yin (2018) stated that a researcher should use

methodological triangulation to ensure that data collected in a semistructured

interview and document review are consistent and complementary. I

enhanced the reliability and validity of the study by using methodological

triangulation of the data collected from multiple data sources.

Reliability and Validity

Reliability

Reliability is used to evaluate if another researcher using the same

methods will get a comparable outcome of the study (Mohajan, 2017). Using

member checking of the data will establish the tenet of credibility and

enhance the study's dependability (Birt et al., 2016). I used member

checking, reviewing each interview transcript, following the interview

protocol to enhance the study's dependability, and reaching data saturation,

which helped assure the findings' dependability. Grossoehme (2014)

recommended using a journal to note procedures used when conducting the

research. I used a research journal to annotate the study's research

procedures.

Validity

I determined validity based on credibility, transferability, and

confirmability. Credibility in qualitative research refers to others' ability to

understand a study participant's experiences (Cypress, 2017). Demonstrating

qualitative credibility helps ensure that researchers address the findings from

the participant’s perspective. I enhanced credibility through member

checking of the data interpretation, review of each participant’s transcript,

methodological triangulation, and following the interview protocol. The

objective of the semistructured interview process is to achieve commonality

by adding to reliability, consistency, and transferability for future research

and researchers (Degeling & Rock, 2020; Korstjens & Moser, 2018a).

Maxwell (2020) stated that transferability in qualitative research enables

other researchers to determine the transferability of the research study by

adhering to the data collection and analysis techniques for the research

design, following the interview protocol, and reaching data saturation.

Henderson et al. (2020) stated that confirmability in qualitative

research implies how much the results could be affirmed or validated by

other people. I ensured confirmability in this research study through member

checking, achieving data saturation, and using methodological triangulation.

Johnson et al. (2020) stated that data saturation is necessary to establish

study validity. I ensured data saturation by continuing to collect data until no

new themes emerged. As defined by Faulkner and Trotter (2017), data

saturation will occur when no new themes emerge through the data

collection process, including multiple sources, such as interviews and the

review of publicly available company documents.

R. K. Yin (2018) stated that methodological triangulation improves

validity. Farquhar et al. (2020) recommended methodological triangulation

as a good practice in conducting case study research and as a way to ensure

validity through convergence of methods, sources, and findings. I used

methodological triangulation of data collected from two data sources to help

ensure validity.

Transition and Summary

Semistructured interviews are suitable for collecting data and

discovering the strategies and methods from participants' experiences and

perceptions. I used purposeful sampling with the potential participants to

identify SBOs in the Washington,

DC/Baltimore, MD metropolitan area. Each participant had been in business

for 5 or

more years and implemented successful succession plans to transition the

business to a second or third generation owner for sustained profitability.

Before collecting data, I obtained authorization from Walden

University's IRB to start gathering data. I conducted interviews through

Zoom and Skype videoconference calls. Because of the COVID-19

pandemic, I followed Walden University's guidance of not conducting face-

to-face interviews. I recorded and transcribed the interviews using only the

audio recording feature from my Google Pixel 5 Android phone and the Rev

Assistant software exactly as the participants described their experiences,

provided my interpretations of the interview responses to the participants for

member checking, and annotated any participant changes. I triangulated data

from the interviews with data from organizational documents. Lastly, I

uploaded the transcribed data to NVivo 12 qualitative software to analyze

patterns and themes.

In Section 2 I covered the role of the researcher, participants, research

method, research design, population and sampling, ethical research, data

collection instruments, data collection technique, data organization

techniques, data analysis, reliability, and validity. Section 3 includes study

findings, application to professional practice, implications for social change,

recommendations for action, recommendations for further research,

reflections, and the study conclusions.

Section 3: Application to Professional Practice and Implications for Change

Introduction

The purpose of this qualitative multiple case study was to explore

strategies that SBOs use to develop an effective succession plan to sustain

business profitability for the next generation of owners. Guided by Argyris

and Schön’s (1997) OLT and Burns’ (1978) TLT and using Yin’s (2018)

five-step data analysis, I identified three themes: planning for the future,

developing and training personnel, and strategies to overcome barriers.

Under Theme 1, participants discussed a deliberate and disciplined approach

to planning for the future and success of the business. Theme 2 was about

identifying and developing talent within the organization. Theme 3

constituted implementing strategies that enable leaders to overcome barriers

that prevent the business from becoming and maintaining viability.

Presentation of the Findings

One central research question guided this study: What strategies do

SBOs use to develop an effective succession plan to sustain business

profitability for the next generation of owners? Nine semistructured

interview questions, follow-up questions, and analysis of company

documents resulted in three themes: planning for the future, developing and

training personnel, and strategies to overcome barriers. From these themes, I

identified strategies for improving business practices. Table 1 includes the

themes, number of respondents identifying the theme, and their

corresponding number of occurrences from the interviews and company

documents.

Table 1

Frequency of Themes

Themes Number of

respondents

identifying the theme

Number of

occurrences

Planning for the future 7 75

Training the personnel 7 27

Strategies to overcome barriers 7 21

The two conceptual frameworks for this study were TLT and OLT.

The participants’ responses analogized with both theories. Woodfield and

Husted (2022) stated how, if successfully implemented, the transfer or

succession of leadership should be transformational within a company. I

used the findings in my study to recommend that the succession process

should be transformational for SBOs. The findings also revealed why OLT is

strongly identified with TLT, which aligns with the work of Asif (2019),

García-Morales et al. (2012), and Zagoršek et al. (2009).

Theme 1: Planning for the Future

Walker (2021) confirmed that certain lean startup activities and the act

of writing a business plan are correlated with success. All participants noted

that planning, developing, and creating a business plan are keys to success.

A business plan is a vital tool to guide a business or potential business owner

in decision making, including hiring employees, finance, marketing, and

operations (Antler et al., 2022). P3 stated that the number one key to

planning for the future is asking, “How are we doing as a business right

now?” P1 described the business plan as a road map for small businesses

that successfully operate while bidding in the market. All participants who

do business with the federal government stated that a business plan is an

SBA requirement. A small business must be certified and remain in the

SBA's 8a small business program. Each business must have a written

business plan (SBA, 2022). P2 stated, “the key strategy we can look at is the

changes as we go along. The world is changing every day.”

Talent and knowledge are essential assets to create an organization's

necessary resources and to bolster a maintainable competitive advantage and

extraordinary performance (Baporikar, 2021). According to P5, a business

owner plans futuristically for the populations they serve currently and intend

to serve. P1 stated that “planning and developing a business and succession

plan helps the small business compete better with more unknowns uncovered

and assists in their decisions when dealing with their larger counterparts in

the market.” Small businesses face challenges in planning for the future in

the development of their most valuable assets, influential leaders (Masenya,

2022). P3 described how companies from Day 1 spend time and genuinely

invest in the professional development of all their employees. P6 stated,

As a business owner, your hiring process is a key component for

business success and development. Visualizing what you want the

business to be, professional, friendly customer service, and profitable

requires implementing proper training for the people being hired, to

get the environment you want from the beginning.

According to Eddleston et al. (2012), the first step in SP is clarifying

goals and priorities. P2 stated, “most business owners put the succession

planning aside because the SBO must do everything." P3 described the

motivation to implement a succession plan that deals with the next step of

the business.

The SBO must create the business strategy and review it on an

ongoing basis. In the second step of SP (Wiatt et al., 2022), involving key

stakeholders in the business is vital. The stakeholders are key personnel in

the business, including those in development, business sponsors, business

advisors, and financial advisors. P5 discussed using Ameriprise's advisors as

part of their business strategy because they were training partners in

implementing their company's succession plan:

When we start a business, most business owners, including myself,

think the succession plan goes to the side. You do not think about it.

However, the reality is that eventually, the business needs to be

handed over, and if the transfer is poorly planned, it will fail, and

there will be no succession.

All participants discussed the need to have sponsorship or mentorship

to run their businesses and successfully implement a succession plan. Ayyala

et al. (2019) stated that mentorship promotes growth by establishing a long-

term personal relationship in which the mentor gives the mentee guidance,

feedback, and coaching. Successful mentoring transforms both the mentor

and the mentee. P2 stated, “I think it is so important at the beginning to have

that mentorship, someone sitting next to you, who has been down that road

to developing that succession plan.” P2’s excerpt illustrates the importance

of proper sponsorship and mentorship for SBOs. This narrative also

indicates the importance of having the right sponsorship and mentorship,

ensuring that the SBO can develop their skills and successfully develop their

employees while growing their business and learning to complete projects

that can help them develop skills.

In connection with previous statements, P4 indicated that a SBO

should be financially strict and should not be an excessive spender: “You

have to manage your resources, time, and employees and make them part of

your organization. Make certain that everyone in your organization

understands the mission because it is not only family members that are part

of the organization.” Some SBOs relied on external sources of trusted

advisors for SP due to challenges that arise during the SP process (de Groote

& Bertschi-Michel, 2021). P4 shared how their business partnered with

several external sources, such as Ameriprise, to implement their succession

process, stating, “We are open to partnering with them and making them feel

that our success depends on them as much as it depends on those in the

company.”

Alignment of Theme 1 to the Literature

The history of SP, as shown through examples in religious

organizations, governments, the military, and monarchies, indicates the

importance of planning for the future. P1 said, "The main reason to create

and implement a succession plan is to see, write down on paper, and plan out

and everything for the success of your business." Establishing a firm

foundation of strategies that SBOs use to develop an effective succession

plan to sustain business profitability for the next generation of owners’ SP in

small businesses requires consideration of soft factors such as a business

plan, an exit strategy, leadership and organizational styles, training and

development, and human capital. Fifty percent of all new small businesses

fail within the first 5 years of operation (Quansah & Hartz, 2021).

Participants added that SBO planning for the future begins with establishing

foundations, which is vital to the success of a business. According to Di

Pietro et al. (2022), for a business to have the best chance of succeeding, it is

essential to map out both long- and short-term plans. The plan should detail

every step, including an exit strategy. Participants stated that writing and

reviewing their business plan helped them stay focused on the priorities for

their business.

Alignment of Theme 1 to the Conceptual Framework

Small businesses’ succession and continued success are tied to the

succession of leadership and the successful transfer of tacit knowledge.

Allowing gradual learning during the transition phase may help avoid

performance problems typically occurring when members of an organization

are operating in unfamiliar business areas. TL and OL theories are an

appropriate framework for researchers seeking to explore strategies that

SBOs use to develop an effective succession plan to sustain business

profitability for the next generation of owners. Empirical researchers have

found that the key to transformation success within an organization is

leadership (Weber et al., 2022). SBOs can leverage TL and OL theories to

explore strategies that could make the subsequent generation of business

owners successful.

Theme 2: Training the Personnel

Human capital is an organization's most important asset in the highly

competitive global environment (Arrieta et al., 2022; Butler & Roche-Tarry,

2002). A visible succession plan signals not only to the employees, but also

to clients and customers that the business is prepared for the future. P3

described how as CEO, they spent a great deal of time investigating and

implementing various training, professional development, and certifications

for their employees. Table 2 shows the planning for future foundation

subthemes, the number of respondents identifying the theme, and the number

of occurrences during data collection.

Table 2

Planning for the Future Subthemes

Themes Number of

respondents

identifying the theme

Number of

occurrences

Developing a succession plan 7 48

Business mentorship/advisors 6 39

Successful businesses are easily differentiated from those that struggle

by their human capital. Developing and training key talent as part of a

succession plan provide continuing success for an organization (Fusarelli et

al., 2018). Human capital is a critical part of any business’s success. P2

stated that hiring the right person is challenging based on the traditional

mindset of bringing a person on board:

Being retired military, I figured this person would be here forever.

They did sign up for the job. No, that is not true. That is so far not

true, particularly with the new generation's mindset. Furthermore, I do

not think we ever see this change going back through nine to five.

How can we help this generation grow? How can we both lock arm

and arm? Build this company so that employees are part of the

company succession plan.

P2’s narrative illustrates how SBOs face challenges in hiring the right

people and keeping their SP on track. P4 described how they developed key

employees who needed to be more exposed to factors that influence their

business to look at the future. P4 further stated that developing their key

employees allowed the SBOs to assess how the key employees were doing

and how they could improve things, while giving them an incentive as to

why the company's interest should be as important to them as the owner. P4

stated that "the bonus is one of the strategies that we use in order to make

them feel that, okay, I got work, I got my pay, but I got something extra."

Alignment of Theme 2 to the Literature

SP without proper training of personnel will fail. A leader placed into

a position without training will begin at a deficit. The leader may be

transformational; however, the leader and the organization will suffer

without proper training from a successful predecessor. According to

Lantelme et al. (2021), a transition event can trigger an existential crisis that

could lead to the end of a small business without a succession plan. P6 stated

that implementing proper training for the people hired to visualize the same

goals for the business was a key component at the beginning. P4 stated that

the key strategy that they used was familiarization to train the personnel.

Training the successor required ensuring that every aspect of the business

was understood and the freedom to adjust to make it theirs.

Alignment of Theme 2 to the Conceptual Framework

Through the lens of TLT and OLT, transformational leaders

understand that to avoid performance in an organization and risk failure,

members need to operate in familiar areas, especially during tacit knowledge

transfer. P5 discussed one strategy that they found most effective for

motivating their employees to adapt to changes and perform better: making

them part of the planning process. By making them part of the planning and

implementation process, they were able to reap the benefits and rewards in

the success of their involvement, including, for example, pay raises and

creating a plan that would involve their future, such as a pension plan.

According to Begum et al. (2020), TL is designed to change analysis and

transfer knowledge through organizational learning. Therefore, using TL

allows a CEO or leader to focus on OL and address barriers that could

impede this learning. The aim of using OL is to pave the way for

professional development to acquire the skills and aptitudes that bring

sustainable benefits through innovation.

According to Atwood (2020), SP is a part of workforce planning.

Workforce planning involves planning for the recruitment and development

of employees at all levels of the organization and includes more functions

than a traditional succession plan, which focuses on leadership and key

positions. P3 described the investment put into each person in the

organization’s training and development.

Theme 3: Strategies to Overcome Barriers

SBOs face many barriers to overcome while running and maintaining

a successful business, even with a successful succession plan. While barriers

differed, several subthemes emerged from the participants. Planning

strategies to overcome these barriers in the beginning enables the SBO to

positively face and overcome these barriers. Table 3 shows the subthemes of

the strategies to overcome barriers: funding to operate the business, hiring

the right personnel, embracing technology, and early development of

succession plan.

Table 3

Overcoming Barriers Subthemes

Subthemes Number of Number of

respondents

identifying the theme

occurrences

Funding to operate business 7 20

Hiring the right personnel

Embracing technology

Early development of

succession plan

Funding to Operate Business

P1 said that an SBO must know the financing required to create and

keep the business in operation, knowing who the competitors are and the

business processes. According to P1, the SBO must project how much

funding is needed to successfully run the business each year, what they

project to earn each year, and in years to come, including the business’s

operating expenses to sustain a successful business. P5 stated that they were

amenable to partnering with banks and other financial institutions: Banks

know us, and they are part of what we do. We make them feel like they are a

part of us. Our success is dependent on them; they call us when anything is

wrong, or they suspect anything is going wrong.

All participants noted the importance of maintaining good credit.

Hiring the Right Personnel

The SBO who has a succession plan must eventually decide who will

run the business. Hiring and developing the right person is vital if there is no

family member to take over the business. P2 said that the business needs to

be handed over at some point, and if it is not planned correctly, it will fail,

and there will be no succession. P6 said that employees must be willing to

become part of a team. Some may have experienced something different in

other places of employment. Getting them to be part of a team can initially

be a challenge. P6 said, "I knew how I wanted the company to run. For some

reason, in my industry, it can be very selfish, especially with individuals

who have been in the industry for many years already." P2 said that every

employee is different. Some employees are excited to work and do not need

encouragement every day. Knowing which employees need encouragement

will help maintain a successful business. P2 said, Offering bonuses is

standard. We sometimes do a step increase without discussion; it is based on

how that person has performed. Thus, we also allow them to buy into

retirement planning. And allowing them to be a part of kind of a win-win

situation. We offer a finder's fee anywhere between $10,000 to $15,000. So,

what happens with that is we now have a closer network of coming in versus

having to recruit because recruiting is extremely expensive.

Embracing Technology

Business technology is quickly changing. Machines are completing

tasks once conducted by hand. P4 said business owners should stay current

with the technology and look at the innovations in every aspect. Moreover,

business owners should ask themselves, “what have we been doing? What

else can we do with the resources and the clientele that we have?” Business

owners need to continue improving their viability by embracing technology

and adding services to increase profits. P2 discussed being able to adjust to

technology and be mentally prepared:

Think about where we are today? Technology-wise, and how fast this

thing is spinning. And how adaptive this generation. And the next

generation will be when we come when we talk about technology.

And to be able to think forward as to how we would adapt to that

because it is moving at a pace that is very rapid. And we can no longer

sit in where we were, and that thought to cause it is not its history. It is

history when we talk about it. Embracing technology also means

rethinking if the retail space was previously needed. Moreover,

allowing employees to work remotely will save the company money

that could be used to retain the best employees.

Early Development of a Succession Plan

The majority of business owners need to develop a business plan.

However, many participants admitted missing developing an exit strategy or

a succession plan in the beginning. All participants reported they wish they

had developed and implemented a succession earlier than they did. The SBO

has insurance to cover their business and their lives. Having a succession

plan in the beginning can cover the uncertainties of business regarding who

will run the business should certain events take place, such as death and

retirement. P4 discussed how family-oriented business owners should plan

for their business to pass on from generation to generation:

A succession plan is like having a will or insurance. Something that

you put in place. Having a visible success plan lets the stakeholders

see that these plans are in place and that personnel is constantly being

developed. When a significant event does occur, the business can

continue to operate with minimal interruptions.

P5 said,

Time is of the essence; we are not getting younger. A business owner

thinks about the benefit to the community they serve and the people to

implement policies and program. Developing a succession plan is

essential to any business thinking futuristically of the population that

is being served. And that is the essence of my working on a

succession plan for the company.

Alignment of Theme 3 to the Literature

The history of SP in small businesses, the military, governments, and

religious organizations are covered in the literature review, including their

history or origins. The literature review included why succession is essential

to business success and profitability, development, training, and leadership,

and understanding its contribution to the research problem. According to

Ferreira et al. (2021), SP increases a business’s chances of survivability past

5 years and sustainability.

SBOs face many barriers to overcome while running and maintaining

a successful business, even with a succession plan. While barriers differ,

several subthemes emerged from the participants' funding to operate the

business and hiring the proper personnel. P1 discussed that securing funding

to operate the business at times is difficult. Receiving payment for work

already completed by some customers can be challenging. They were

balancing being polite to continue business and asking for payment for

services rendered.

P1 further discussed the barriers to keep their business from being approved

on the

General Services Administration (GSA) schedule, P1 stated,

We have all of the boxes checked when we submitted our paperwork

to get on the GSA schedule. We were about to get on the GSA

schedule, but one thing was blocking us. And that was the proper

funding, even though we had financing. We were planning to sell our

invoices (factoring), but this was unacceptable to the GSA. So that

was a block for that. That's a roadblock that we must overcome, and

we have plans of overcoming that very shortly.

All participants discussed the challenge of hiring the right personnel.

Baby boomers are exiting the workforce, and there are not enough people to

replace them. Bakare (2021) asserted that SP could save time, money, and

most importantly, the integrity of the position. SP should be a top priority.

Organizations use SP as part of their talent management strategy. P6

discussed how they overcame the employees' lack of motivation to become a

genuine part of a team, which was initially challenging. P6 stated, "It was

taking it one day at a time and weeding out what was not working, whether

my approach to a situation or just changing certain things within the

business."

All participants discussed the importance of adapting to technology

for business survival. According to Goutam et al. (2022), embracing

technology is essential to surviving today's business. P4 discussed how they

go to many trade shows to see and embrace innovative technologies. P4

stated, "Knowing what's out there allows me to stay abreast of the latest

trends and towards the future and how technology will affect the business."

All participants discussed having a succession plan; however, most

expressed the need to develop their succession plan or exit strategy early.

P4 stated,

As a much older man, I now see that I should have started succession

much earlier, but when you are young and in your early thirties, you

think you have a lifetime. You believe old age or retirement is way

down the road, not realizing how fast it creeps up on you. However,

you choose to overlook it. I would have started succession much

earlier, especially in the grooming stages.

P3 expressed an alternative to the succession plan by implementing an

employee stock ownership plan (ESOP). An ESOP is a plan that gives

workers ownership interest in the company. P3 stated, “The ESOP is the one

area that could be improved. It is digging deeper with our subject matter

experts on how we can begin to build an ESOP. Based on our clients are

from the government sector.”

Alignment of Theme 3 to Conceptual Framework

Talent and knowledge are important resources for developing the

organization's most valuable assets and supporting sustainable competitive

advantage and outstanding performance. Fusarelli et al. (2018) stated that a

successor development plan or succession plan for next-generation or future

leaders should include current and future business challenges, for example,

key skills, core technology capabilities, and career development plans

needed to be successful. Developing future leaders at all levels of

management, not just the top, is a strategy to identify and develop future

leaders at a company. Through the lens of TLT and OLT, developing a

succession plan when a business starts is needed. Business organizations

compete to acquire and retain the talent to sustain and grow their businesses

(Masenya, 2022). SP can help businesses prepare for contingencies by

preparing high potential leaders to advance within a company.

SP is a critical leadership tool for organizational growth and

sustainability; it alleviates substantial organizational knowledge and

leadership gaps through the strategic replacement of key personnel. SP is

also a proactive approach to managing talent and developing a leadership

pipeline to meet an organization's need-based demand for sustainability.

Using SP as a developmental tool may help the SBO determine what and

whose knowledge is most important to capture and help them to identify

critical positions. SBOs need to grasp the meaning of SP before

implementing a succession plan as a developmental tool for organizational

sustainability.

Application to Professional Practice

The purpose of this qualitative multiple case study was to explore

strategies SBOs from the Washington, DC/Baltimore, MD metropolitan area

used to develop effective succession plans to sustain business profitability

for the next generation of owners. The findings section includes the collected

research data, data analysis, and interpretation of results with linkages to the

conceptual framework and literature review. This study's findings and

recommendations may provide SBOs and senior managers a practical guide

to successfully sustain their businesses for more than 5 years, implement

successful succession plans for transitioning their business to second- or

third-generation owners, and sustained profitability, growth, and

sustainability strategies. Small businesses face critical constraints, including

the lack of a mission or vision statement, SP, funding, human capital,

management, and exit strategy.

The strategies SBOs use to develop an effective succession plan to

sustain business profitability for the next generation of owners were

planning for the future, training the personnel, providing strategies to

overcome barriers, developing a succession plan, and cultivating business

mentorship/advisors. The findings showed that SBOs could shape, change,

and influence their organization's culture based on its developmental stages

and experience. This study was focused on the strategies that a SBO or

senior manager can use to develop effective succession plans to sustain

business profitability for the next generation of owners. The SBA data

revealed that 80% of small businesses fail in the first year (SBA, 2019). ).

Only one out of three small businesses survive to reach the 10-year mark.

This research could be significant for SBOs to develop an effective

succession plan using appropriate strategies and methods. SP is an important

leadership tool for organizational growth and sustainability. Strategically

changing key persons closes the substantial gap between organizational

knowledge and leadership. By using SP as a development tool, SBOs can

determine what and whose knowledge is most important and help them

identify the people to fill the positions. Before implementing a succession

plan as a development tool for organizational sustainability, SBOs need to

understand the implications of the succession plan (Bakare, 2021).

Implications for Social Change

The social change implications in this research are that small

businesses provide economic stability through employment in their

communities, and SBOs may create a positive social impact benefiting local

communities. SBOs should plan for the future with a business plan,

implement a succession plan, train and develop personnel, and develop

strategies to address and overcome barriers. Using the strategies identified in

this study, SBOs could successfully operate their businesses to retain key

personnel, positively impacting stakeholders and the community due to a

better economy with a higher employment rate.

Recommendations for Action

SBOs should pay attention to the results of this study and consider

using the methods and strategies to develop an effective succession plan to

sustain business profitability for the next generation of owners. Prior to the

current CEO's resignation, retirement, or death, SBOs must evaluate and

manage the importance of putting a SP process into place (Kaslow &

Friedland, 2021). SBOs and their leaders should pay attention to the results

and consider assessing the strategies and methods to retain and plan for

replacing their leaders. Organizations, government agencies, business

leaders, and researchers should pay attention to these results because of

potential implications beyond small businesses. The strategies include

planning for the future, training the personnel, providing strategies to

overcome barriers, developing a succession plan, and cultivating business

mentorship/advisors. I also recommend the following substrategies:

•SBOs must plan from the beginning of their business, develop a

succession plan, and implement it.

•Training the personnel is critical. Developing potential leaders at

every level from the beginning of the business or when each

employee starts with the company could significantly increase the

success rate of a business. Personnel seeing an opportunity for

advancement may strive to progress up the ladder.

•Strategies to overcome barriers, such as funding to start or expand

the business, are critical.

SBOs should seek training on these strategies to execute them

efficiently. Leaders should continuously develop these strategies through

participating in professional development training, attending workshops and

conferences, and staying abreast of current trends by reading literature.

SBOs should use transformational leadership and organizational learning to

develop retention strategies to influence their organization leaders’ attitudes

and behaviors to reach organizational goals. I plan to publish the results of

this doctoral study and provide training for SBOs to develop these strategies

and more to sustain their businesses.

Recommendations for Further Research

In this study, I explored and collected data on SBOs' various strategies

that have been successfully used by SBOs who have successfully operated a

small business for at least 5 years and have implemented a successful

succession plan in the Washington, DC metropolitan area. Further research

is needed to explore the challenges small businesses face in obtaining the

necessary capital to start and expand their businesses. Many SBOs face

challenges in accessing financial capital. Further research on alternative

funding sources other than the Small Business Administration is needed.

Considering that small businesses use social media for a competitive

advantage and sustainability, further research is needed on how SBOs access

training and utilize these resources with minimal capital.

According to the Bureau of Labor Statistics, the post COVID

pandemic data show that employees leave the workforce at higher rates and

do not stay at a company as long as before (U.S. Bureau of Labor Statistics,

2021). Employees are leaving the workforce at higher rates because of being

exposed to poor working conditions, work-related stress, burnout, and other

adverse health impacts (Peters et al., 2022). This elevated quit rate is known

as the “great resignation” (Faccini et al., 2022; Rae, 2022). Further research

is needed on how the worldwide pandemic COVID-19 and the great

resignation in the United States affect retaining and attracting qualified

human capital, a challenge for most small businesses. The pandemic

accelerated what was evident before the pandemic: a depressed labor force

participation rate and increasing labor strife (Elhefnawy, 2022). I

recommend further research in how SBOs addressed employee retention and

the great resignation in the United States.

Further insight could be obtained about different geographical

locations or how strategies and skills help small businesses thrive beyond the

first 5 years. The study's themes and findings align with the conceptual

framework of TLT and OLT. Future researchers should use other research

designs and methodologies to increase the body of research on this subject.

Reflections

Conducting this study was the most challenging, demanding, and

rewarding experience I have ever undertaken. My knowledge and respect for

small businesses owners expanded tremendously. The thought of quitting

was never an option. I am a finisher! I used all the resources available to me

as a Walden doctoral student. My knowledge has increased about small

businesses tremendously.

The doctoral study process provided a wealth of knowledge about

what is required to conduct research. At the start of this process, I never

realized the time and effort required to complete the DBA study. The

literature review was challenging but rewarding once I understood how to

research and write that subsection. The data collection process was not

complicated, but it took time to analyze the data I collected.

The unexpected COVID-19 pandemic further complicated how data would

be collected. Using the interview protocol, I mitigated personal biases that

may have affected the participants or situations. I thought I would be able to

complete my study in only 1 year. However, it took me 2 years. I have a

greater appreciation for small businesses and how they affect the economy.

Conclusion

The purpose of this qualitative multiple case study was to explore

strategies SBOs in the Washington, DC/Baltimore, MD metropolitan area

used to develop an effective succession plan to sustain business profitability

for the next generation of owners. Three main themes emerged from coding

and data analysis of interview data, interview notes, and company

documentation. The three emergent themes from the data analysis were: (a)

planning for the future; (b) training for the personnel; and (c) strategies to

overcome barriers. The research adds to the limited literature on SP for

SBOs in Washington, DC/Baltimore, MD metropolitan area. The SBA, local

and state governments, regulators, and other stakeholders may use the

research findings as background information to engage with SBOs to explore

strategies to develop effective succession plans to sustain business

profitability for the next generation of owners' mutual benefits. SBOs may

use the research findings to maintain and grow their businesses, reducing the

high business failure rate, cultivating business mentorship/advisors, and

steps to increase SBO utilization of resources. The increase in SBOs'

utilization and success rate will contribute to national economic

development through creating jobs, increased tax base, and revenues for

various economic and social benefits.

Strategies for Succession Planning and Sustained Business Profitability for Small Business

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