Succession Planning Strategies in Family Businesses

Section 1: Foundation of the Study

Background of the Problem

Family businesses play a significant role in Western civilization and comprise the

backbone of many countries’ economies based on their contributions to gross domestic

product (Ljubotina et al., 2018). But the long-term survival of businesses hinges on how

leaders manage the succession planning process (Judd, 2017), and long-term survival is

one of the most critical concerns for family businesses. Researchers have found a link

between effective succession planning, business sustainability, and survival amid the

challenging demands of a turbulent and changing business terrain (Alvani et al., 2016;

McKee & Froelich, 2016; Patidar et al., 2016). A succession plan is essential to serve as a

roadmap for preserving valuable knowledge during leadership transitions (Stephens,

2016).

Despite widespread knowledge of the importance of succession planning and the

added cost to businesses when missing, many boards of directors do not plan for leader

turnover (Hooijberg & Lane, 2016). Family business owners similarly do not establish

formal succession plans despite understanding the importance and need (Bozer et al.,

2017). There is a demand for research to understand the link between family and business

ownership (Payne, 2019). The purpose of this study was to explore effective succession

planning strategies that family businesses employ when preparing for the next generation

of family leaders.

Problem Statement

Only one-third of family businesses survive into the second generation and

approximately one-eighth into the third generation (Wang & Jiang, 2018). By the time

they have transitioned to the fourth generation or beyond, about 97% of family-owned

businesses would collapse (Mokhber et al., 2017). The general business problem is the

lack of effective succession planning strategies in family businesses. The specific

business problem is that some leaders in family businesses lack strategies to implement

an effective succession plan.

Purpose Statement

The purpose of this qualitative multiple case study was to explore the strategies

leaders in family businesses use to implement an effective succession plan. The targeted

population consisted of six senior executives from three family businesses in Ghana who

have successfully developed and executed strategies for succession plans for future

leaders. The social impact includes increased awareness of the need to plan effectively

for leadership succession, which could contribute to helping solve the challenges

associated with the lack of viability and sustainability of family businesses. Economies

experience growth in the number of family businesses when such organizations continue

to remain viable, which may increase economic activities. The social impact also includes

the opportunity to help reduce unemployment in the communities served by the family

businesses.

Nature of the Study

I used a qualitative research methodology for this study. Qualitative researchers

focus on continuous exploration and description of the context of a phenomenon to gain

an in-depth understanding of subjective and socially constructed meanings (Levitt et al.,

2018; Saunders et al., 2016). The qualitative research method was appropriate for this

study because I intended to gain a more in-depth insight into succession planning

strategies within family businesses. A quantitative analysis helps the researcher to

examine potential causal relationships (Taguchi, 2018). A quantitative methodology was

inappropriate for this study because the focus was not on reviewing the relationship

between variables. Elements of both qualitative and quantitative methods are

characteristic of mixed methods study used for examining a common phenomenon along

with statistical data analysis (Abutabenjeh & Jaradat, 2018; Doucerain et al., 2016). The

mixed-methods approach was also unsuitable for this study because I did not conduct

statistical data analysis to determine variables, relationships, or group differences.

Different qualitative research design approaches exist, including case study,

ethnography, phenomenology, and narrative design (Korstjens & Moser, 2017).

Researchers can identify and explore issues related to a phenomenon in a real-world

context by adopting a case study design (Yin, 2017). I applied a multiple case study

design involving three unique family businesses in Ghana. Ethnography involves

studying human cultures within a society (Korstjens & Moser, 2017; Spradley, 2016), but

I was not interested in studying business cultures. The phenomenological design

emphasizes the meanings of participants’ experiences and ideological processing (Yan et

al., 2017). Phenomenology was also not suitable for this study because the study was not

about exploring the meanings of human experiences. Finally, using the narrative design,

researchers can collect stories used to define conduct in a social context because an

individual’s life story builds on previous chapters and is related to future chapters (Maree

et al., 2018). The narrative design did not align with my study because I was interested in

career studies of participants’ stories.

Research Question

The overarching research question for the study was “What strategies do leaders

in family businesses use to implement effective succession plans?”

Interview Questions

I conducted semistructured interviews to collect information on the succession

planning strategies in family business using the following interview questions:

1. What are the succession planning strategies included in your organization’s

strategic plan?

2. What effective processes do you use in your organization for leadership

development?

3. What key competencies do you use to select future leaders as part of the

succession planning process in your organization?

4. What are the knowledge transfer practices in your organization?

5. What are the factors impacting success and barriers to effective succession

planning?

6. Would you like to add any additional information about succession planning

strategies?

Conceptual Framework

The family systems theory (FST) was the conceptual framework for this study.

Bowen (1978) introduced the FST, an approach that allows for a view of the family as a

complex, interacting social system that is open, ongoing, goal-focused, and mechanical

(Pratt & Skelton, 2018). FST enhances the understanding of family members’ role in the

circumstances explained by generational adaptations over time and across generations

(Palombi, 2016). The FST offers a solid basis for comprehending issues related to family

communication, goal setting, complex relationships, and maintaining boundaries (Jaccard

& Jacoby, 2010). The FST can provide a valuable framework for success to capitalize on

the family dynamics that foster growth and sustainability (Pratt & Skelton, 2018). The

objective of this qualitative multiple case study was to explore the strategies leaders in

family businesses use to implement an effective succession plan. The FST helped

understand the complex dynamics involved in family business succession planning in

Ghana.

Operational Definitions

The definitions of terms in this section are associated with succession planning

and related to the subject matter of this proposed study:

Family business: A business founded or controlled by family members related

either by blood or marriage (Kudlats et al., 2019).

Knowledge management: A process by which organizations or individuals can

locate, store, retrieve, share, adapt, and use company knowledge to support the

achievement of organizational or individual objectives (Centobelli et al., 2017; Karamitri

et al., 2017).

Performance management: A combination of systems and policies established to

make managers more strategic, effective, and accountable for programs and organizations

(Birdsall, 2018).

Succession planning: Refers to a process where the organization creates a

constant pool of high potential talent for future use by strategically planning for,

developing, replacing, and applying the workforce for sustainment and continuity

(Pandiyan & Jayalashmi, 2016).

Talent management: A continuous process that involves sourcing, hiring,

developing, retaining, and promoting employees while simultaneously meeting the

organization’s requirements (Savanevičienė & Vilčiauskaitė, 2017).

Assumptions, Limitations, and Delimitations

Research assumptions, limitations, and delimitations can help the researcher

identify their assumptions, establish boundaries to conduct the study, and avoid making

inferences (Leedy & Ormrod, 2016). Assumptions, limitations, and delimitations are

important to identify relevance, presumptions, weaknesses, and boundaries that could

negatively impact the research outcomes (Bryman, 2016).

Assumptions

Assumptions are conditions that the researcher cannot be sure about but appear to

be valid and pending verification (Niven & Boorman, 2016). A researcher might

formulate certain assumptions about what to expect from the study based on their

previous knowledge or expectations of theory and practice (Cerniglia et al., 2016). The

first assumption in this study was that I would have access to the information concerning

effective succession planning strategies in Ghana. The second assumption was that

participants would respond honestly, voluntarily share their experiences, and provide

adequate responses to the interview questions. The final assumption relevant to this study

was that all secondary data collection would give accurate information about firms

selected for this multiple case study.

Limitations

Limitations are potential weaknesses threatening a study due to factors the

researcher cannot control (Yin, 2017). The limitations of a research study are factors or

challenges that affect the study’s outcome or how we interpret the results (Bloomberg &

Volpe, 2016). All studies have their limitations (Green et al., 2016). Potential

discrepancies between company documents on succession planning and managers’

perception of succession planning strategies could have been a critical possible limiting

factor in this study. A second limitation could have been limiting the semistructured

interviews to six senior executives and omitting other employees or stakeholders in the

family businesses.

Delimitations

Delimitations are certain boundaries in which the researcher may confine the

study to narrow the scope of the study (Bloomberg & Volpe, 2016). Delimitations are the

boundaries that researchers establish to define the scope of the study (Stenson, 2016). In

this study, multiple boundaries determined the location and caliber of the participants

involved. A delimitation of the study was the restriction of the geographical area to

Ghana.

Significance of the Study

Effective succession planning is crucial to organizational performance in bringing

about strong leadership, motivated employees, compelling work, and extended continuity

(Smith, 2015). Effective succession planning strategies may benefit family business

managers in helping them gain more awareness and information about planning

successful transitions. The social impact may create awareness by providing advisory

services to executive leaders of family businesses to prepare for leadership succession.

The social impact may contribute to helping solve the challenges associated with a lack

of viability and sustainability of family businesses.

Contribution to Business Practice

The leading cause of failure in family-owned businesses is the lack of a viable

succession plan, a critical element for continuity that contributes to the long-term

viability of family businesses (Vincent, 2017). During leadership transitions, the

expectation is for successors to bring onboard innovative, sustainable, and succession-

oriented strategies that enhance sustainability (Perrenoud & Sullivan, 2017). The findings

from this study could be beneficial for management practice by elucidating various

strategies for effective succession planning practices in family businesses that managers

may find helpful. Managers of family businesses may benefit from more information

about effective techniques necessary for ensuring smooth leadership transitions for

business sustainability.

Implications for Social Change

A study on succession planning may produce more insight into effective

leadership transition strategies, which may help executive leaders in family businesses in

the communities. The potential for positive social change from the findings of this study

could result in far-reaching social benefits by guiding advisory services to executive

leaders of family businesses on effective succession planning strategies. The awareness

created may positively impact beneficiary communities served by the family businesses

due to senior executive leaders of family businesses planning effectively for leadership

succession. Additionally, more awareness may help solve the challenges associated with

the lack of viability and sustainability of family businesses. When family businesses

remain viable, communities can benefit by increasing numbers of family businesses and

increasing economic activities to potentially reduce unemployment in the communities

served by the companies.

A Review of the Professional and Academic Literature

The purpose of this qualitative multiple case study was to explore the strategies

that leaders in family businesses use for effective succession planning. The literature

review process allows the researcher to critically read, extract, and synthesize text from

relevant sources (Badenhorst, 2018). The literature review on succession planning

strategies in family businesses involved peer-reviewed scholarly articles and seminal

works to help answer the research question. The literature review may provide critical

insight into existing succession planning and knowledge management strategies in family

businesses. I conducted a thorough review of previous succession planning studies, which

provided a solid foundation for understanding succession planning. I further reviewed the

literature on family business succession planning, including research on relevant

strategies applicable in such family businesses from different scholarly sources.

The review of the existing literature provided a sound understanding of

succession planning, knowledge management, and talent management (TM) practices

applicable to family businesses. Within the literature review, broad topics on succession

planning will include managerial succession, knowledge transfer, strategic planning,

performance management, and TM. The primary sources of articles were from the

Walden University online library using the Emerald Insight, ABI/Inform Complete,

ProQuest, Business Source Complete, EBSCO Host, ERIC, IEEE Explore, and

ScienceDirect databases. I used keywords such as succession planning, family business,

familiness, performance management, strategic planning, talent management, business

continuity, knowledge management, knowledge transfer, coaching, and mentoring. I

ensured that I attained 85% of the references in the literature review from peer-reviewed

sources published within 5 years of my anticipated completion date. I kept more than

85% of the references published within the past 5 years. I reviewed 254 articles,

including 227 peer-reviewed articles published between 2020 and 2016 and not more

than 27 published in 2015 or earlier.

Family Systems Theory

The author of the FST is Bowen (1966), who set out to explore individual

interdependent family systems. The fundamental tenets of the FST within family studies

include the determination of membership, the existence of subsystems, families striving

to maintain equilibrium, need for resources, adaptation, change, the existence of family

rules, and the presence of unique behaviors (Pratt & Skelton, 2018). These tenets allow

clinical psychologists to support patients better based on knowledge of certain behaviors

due to the underlining patterns of family traits (Williams-Reade et al., 2018). Underlying

family traits in individuals can be the reason for the complex system of characteristics

observed among immediate family members (Scott et al., 2018).

Bowen (1966) suggested that the FST is an appropriate framework for studying

individual interdependent systems. Human social systems are complex and adaptive

systems like all living systems (Missimer et al., 2017). The complex system of

interrelated family-level interdependence among the immediate family members reflects

how individuals develop within families (Scott et al., 2018). The family is a complex

system with subsystems and mutual and interdependent social influence where members

interact to influence each other reciprocally (Vedanthan et al., 2016). Social systems,

such as the family, can play a significant role in communication and transfer of resources

between members (Neagoe, 2018). There is a direct link between the nature of the family

system and how the family turns out, either positively or negatively (Padilla-Walker et

al., 2019). For example, the decline in parental monitoring or involvement with

adolescents contributes to adolescent problem behavior, substance use, and internalizing

problems (Brinberg et al., 2017). Factors such as parents’ mental health, co-parenting

relations, and parenting quality can also play a significant role in how well a child adjusts

(Feinberg & Jones, 2018).

The FST presents the family as a complex, interacting social system that is open

and continuously pursuing a common goal (Padilla-Walker et al., 2019; Pratt & Skelton,

2018). But although family characteristics and family traits can influence the features of

the next generation’s families (Padilla-Walker et al., 2019), parents who have the will and

intention may be able to improve the aspects of their children through higher levels of

connection, individuation, and minimizing conflict (Bell, 2018). Unique family member

behavior patterns and interactions lead to ongoing individual behavioral changes,

repetitive habits, routines, rituals, and the creation of shared realities (Padilla-Walker et

al., 2019). The unique developments influence the complex interactions among the

behaviors of family members over time (Scott et al., 2018).

The FST applied to the complex dynamics involved in family business succession

planning in Ghana. The FST provides a valuable framework for studying group behavior

because of the focus on a systems approach (Bowen, 1978). Researchers can identify

mechanisms through which parents train other generations, broadening understanding of

how families evolve in behavior through longitudinal, whole-family designs (Scott et al.,

2018). Family businesses make a significant contribution to economic growth; therefore,

it is paramount to further study creating a shared cognitive map and the associated

consequences (Nandi et al., 2019). Family business leaders can develop well-informed

succession planning strategies with defined means of dealing with family conflicts that

could arise during leadership transitions.

Application of Family Systems Theory to Family Business Research

Researchers using the FST go beyond biological observations to include thinking

around family systems and engaging the family of origin (Pratt & Skelton, 2018). Family

systems thinking can be used to train clinicians to understand family behavior patterns

better (Fogarty & Mauksch, 2018). Family psychologists have made meaningful

recommendations for appropriate remedies using the family systems approach to

establish a systems-based psychosocial understanding of relevant family cycle patterns

and transitions (Rolland, 2019). Consistent with family systems psychology, problems

are rooted in a complex matrix of culture, economics, history, politics, psychology, and

religion (Thoburn et al., 2019).

Adopting family interactions using family systems thinking helped in this study to

appreciate the family patterns. For instance, members of family businesses may select the

best leaders when they understand the development patterns of individual family

members. The family business is often the manifestation of the family system and the

nature of family structures, parenting styles, and communication patterns that influence

the entrepreneurial abilities of family members (Soleimanof et al., 2019). A relaxed

parenting style nurtures entrepreneurial ability where family members are open to

democratic leadership, comfortable with delegation, and supportive of collaborative

cultures (Jaskiewicz et al., 2017). A more rigid inflexible parenting style promotes

entrepreneurial capabilities because family members have mindsets that do not appreciate

adaptability, change, and decentralization (Soleimanof et al., 2019). The nature of the

home environment also impacts what happens in the family business (Combs et al.,

2018).

Benefits of Family Systems Research

Family system studies can help form a foundation for understanding and

determining strategies for dealing with unique and complex family business problems

(Combs et al., 2018). Studying a family in-depth may help understand how to deal with

challenges that may arise in family businesses. Knowledge of diverse family structures,

family member relationships, goals, and emotions affect family firm management

practices, which can illuminate the consequences of negative behaviors (Combs et al.,

2018). Delays often occur in succession planning when family problems arise and

communication and relationships among family members (Reardon, 2018). Family

business leaders can better understand and mitigate any issues based on an understanding

of the genesis in the family firm, how the firm has evolved, imprinting, and learning

practices (Combs et al., 2018). Family business scholars may also benefit from using FST

as the theoretical framework to understand development patterns in the family businesses

and relevant developmental plans to groom potential successors.

Alternative Conceptual Framework: Transformational Leadership Theory

The transformational leadership theory is an alternative conceptual framework for

this study. Downton (1973) introduced the term transformational leadership (Safonov et

al., 2018), and James MacGregor Burns (1978) introduced the concept of

transformational leadership with four main components including charisma and idealized

influence, inspiring motivation, intellectual stimulation, and individual approach (Avolio

& Bass, 1988). Bass then introduced a new multifactor leadership theory model,

including the transformational, transactional, and laissez-faire leadership types (Samanta

& Lamprakis, 2018).

A transformational leader is a person who drives processes of transformational

change and unites followers to realize higher shared goals (Fourie & Höhne, 2019).

Transformational leaders contribute at a higher level to organizational outcomes because

of their ability to lead and impact the job satisfaction of their followers (Samanta &

Lamprakis, 2018). Transformational leadership styles relate to leaders’ vast experiences

and high decision-making abilities (Grossman & Sharf, 2018). Transformational

leadership is related to the quality of exchanges between leaders and their followers,

supporting interactions that foster healthy working environments (Wong & Berntzen,

2019). During a crisis, leaders can harness their social influence to elicit their social

circles’ cognitive, social, and emotional capacity to generate leadership and relational

connections that could impact the team’s resilience (Teo et al., 2017). The

transformational leadership style thus enhances employees’ competency, leading to

increased productivity and high organizational performance (bin Atan & Mahmood,

2019).

There are three critical assumptions involved in transformation leadership,

including (a) leaders transform followers, (b) followers transform in specific ways, and

leadership (Siangchokyoo et al., 2019). Further, transformational leader behaviors are

associated with an increase in a leader’s emotional exhaustion due to how

transformational leadership behaviors have often appeared as beneficial (Lin et al., 2019).

Additionally, acknowledging that a leader is not perfect may lead to curbing unrealistic

expectations placed on transformational leaders and empowering followers (Fourie &

Höhne, 2019). Although both transformational and transactional leadership styles

contribute to practical organizational commitment, the transformational leadership style

has a more substantial impact compared to the transactional style of leadership (Choi-

Sang et al., 2016).

Family Businesses and Economic Development

Family firms are dynamic players in the global world economy, accounting for

two-thirds of all businesses around the world and 70 to 95% of all business entities in

most countries and ranging in size from small partnerships to Fortune 500 firms such as

Ford and Wal-Mart (Sharma & Sharma, 2019). Further, family businesses contribute 70%

to 90% of the global gross domestic product and create more than half of the total

employment in the developed countries (Oudah et al., 2018; see also Mosbah et al.,

2018). Family businesses thus play a crucial role in national economies (Horčičkova &

Stasiulis, 2019; Ljubotina et al., 2018), acting as an economic bedrock and

entrepreneurial business base in most economies (Kudlats et al., 2019). There is a

growing attention on family firms (Michiels & Molly, 2017), as they contribute to the

economic and social well-being of countries (Welsh et al., 2018).

The market systems are continually expanding with business opportunities, and

there is an increased demand for participation from family members (Nandi et al., 2019).

The survival of family businesses benefits both the family firms and the entire

community (Alonso-Dos-Santos & Llanos-Contreras, 2019). Despite the vital role, family

firm research within the management discipline and closest link to entrepreneurship is

still an emerging field of study (Debicki et al., 2017). Family business succession studies

may help in guiding the crucial economic role that such businesses play.

Challenges of Family Business Succession

Importance of succession planning. The transition of a CEO marks a crucial

turning point often characterized by strategic change, market entry, and investments

(Berns & Klarner, 2017). The succession process is among the essential issues for

assuring the long-term growth and sustainability of ongoing business (Ljubotina &

Vadnjal, 2018). There is a link between chief executive succession and strategic change,

emphasizing the role that succession planning plays in the strategic management process

(Berns & Klarner, 2017; Easter & Brooks, 2017). An effective succession plan could be a

lifesaver for the organization during emergencies (Pandiyan & Jayalashmi, 2016). A

business can ensure a smooth leadership transition without setbacks through effective

succession planning, allowing the company to run seamlessly in fulfilling its mandate

(McKee & Froelich, 2016). On the other hand, when leaders fail to manage or guide a

transition the right way using an effective succession plan, it could result in high

transactional costs (Berns & Klarner, 2017).

Need for succession planning in family business and challenges related to family

structure Family business failures can lead to the selling of the business, highlighting the

need for business continuity (Budhiraja & Pathak, 2018; Perrenoud & Sullivan, 2017;

Suess-Reyes & Fuetsch, 2016). But succession planning in family businesses may be

more challenging compared to other business types. As family firms move from one

generation to another, a natural tension occurs concerning preserving traditions and

innovating to meet the evolving needs of the marketplace (Erdogan et al., 2020). The next

generation finds it challenging to maintain a past family heritage (Jameson, 2018). The

involvement of family members in family business succession could also lead to a loss in

shareholder value because of nepotism, intra-family conflict, and incompetent successors

(Kudlats et al., 2019). Additionally, there may be challenged with keeping the next

generation of younger family members motivated for family business continuation

(Ljubotina et al., 2018). Although the intra-family succession of incumbent family

members is significant, less than 7% of the next generation of family members may be

willing to work in the parent’s business (Zellweger, 2017). Family firm parents also face

the dilemma of finding the balance of instilling in their children a sense of belonging and

the confidence to be independent (Garcia et al., 2019). Limited availability of talent

within the family, emotional factors associated with incumbent successor relationships,

and other complex dynamics in family social structure make family business succession

challenging and difficult (DeNoble et al., 2007). Therefore, an effective succession plan

must include measures to effectively align the expectations of both generations (Van

Skiver, 2015).

More challenges to succession—finances. Family business succession may also

be more difficult because of succession financing issues, threatening the successful

intergenerational transfer of family firms (Koropp et al., 2013). Well-planned successions

are critical to the life of family businesses, yet the financial management aspect of

succession planning in family businesses can be complicated, requiring a reflective and

planned succession strategy (Csákné Filep & Karmazin, 2016). Family business financial

management is different from that of other businesses (Csákné Filep & Karmazin, 2016).

Family business leaders may have to contend with the difficult decision of keeping things

in the family versus using external support during a financial crisis. The family culture

and nonfamily members have a role to play in family succession planning because they

shape the business culture from which the incumbent obtains their professional identity

(Bozer et al., 2017). Family businesses may be more resilient to economic crises due to

the willingness to support the business with family savings and family resources;

however, the preference to not use external financing for a financial crisis can sometimes

lead to loss of growth opportunities, which can be detrimental to the business’s future

performance (Koropp et al., 2013).

Businesses may deal with the challenge of family business succession when they

adopt a social planning strategy with stakeholder engagement (Devins & Jones, 2016).

Family business owners view their business as assets and investments relevant when

transferring ownership (Csákné Filep & Karmazin, 2016). The succession strategy must

emphasize an understanding of hidden assumptions, a shared understanding of the

problem, and reconciling different family business interests, leading to a consensus on the

next steps (Devins & Jones, 2016). The evolution of family structures is leading to many

different types of structures such as dual-earner families, single families, and single-

parent families, so business strategies must include family situations for creating policies,

practices, organizational culture, and support systems (Powell et al., 2018).

Family Businesses Approach to Leadership Succession

Leadership succession is a crucial issue for family business continuity

(Horčičkova & Stasiulis, 2019). Commitment to the family business as the psychological

state of mind compels a next-generation member toward their family business (Garcia et

al., 2019). The management of succession needs must be prioritized and supported by a

database of retirement wave of staff, talent pipelines, talent assessments, formalized

talent pools, diversity initiatives, and a record of the return on investment (Bleich, 2019).

It is essential to identify essential leadership skills and competencies for success, attract

and motivate leaders, create a sense of responsibility, align succession plans with the

corporate culture, measure results, and reinforce desired behavior (Pandiyan &

Jayalashmi, 2016). The succession planning process can be pinned to three simple steps:

successor identification, developing and documenting a transfer plan (Earls & Hall,

2018). Belief in the successor’s diplomacy, conflict resolution, and negotiation abilities is

even more relevant and salient in family firms than in other firms (Garcia et al., 2019).

Strategies for Long-Term Sustainability

Researchers may examine financial performance and noneconomic outcomes

when reviewing performance outcomes (De Massis et al., 2018). Family firms do not

only focus on economic benefits but may be more concerned about long-term

sustainability (Alessandri et al., 2017). Family firms are heterogeneous and pursue

simultaneously financial and nonfinancial goals (Sharma et al., 2020). Family businesses

are concerned about the long-term survival, trans-generational growth of the family, and

wealth (Ljubotina & Vadnjal, 2018). Family firms have a unique bundle of resources and

challenges that shape their transactions and helps them to adapt compared to nonfamily

businesses (Miller et al., 2020). Long-term survival strategies of German family firm –

Mittelstand involve; (a) family ownership and control; (b) niche focus globalization

strategy; (c) relying more on internal funds; (d) long-term strategies over short ones; (e)

bonding with employees and involving them in decision-making; and (f) embeddedness

in local communities (De Massis et al., 2018).

Family firms may not be quick to internationalize compared to nonfamily

counterparts because of the fear of the danger this may pose to loss of socioeconomic

wealth, financial wealth, the risk of losing family control, and the belief that such risks

might not be worth it (Alessandri et al., 2017). Family firm succession planning processes

inevitably lead to different emotions that need to re-surface and be subject to alleviating

to ensure satisfaction at the individual level, move the process along quickly, and prevent

an impasse from occurring in the process (Bertschi-Michel et al., 2020).

Family Firms Succession Strategies

Family businesses prepare heirs to perform the most critical traditions as a part of

long-term survival and continuity strategies (di Belmonte et al., 2016). It is importance to

select the right chief executive, emphasizing that leaders play a crucial role in managing

the organization’s internal goals and ensuring the company meets external expectations

(McKee & Froelich, 2016). The planning for succession is a great opportunity for

changing organizational strategy (Judd, 2017). In most cases, family members occupy

leadership positions in family firms (Bøhren et al., 2019). Owners usually invest

significant funds into these businesses, sometimes having over 50% ownership; therefore,

failure during the transition can be chaotic and could lead to disastrous consequences for

the owners and the business (Perrenoud & Sullivan, 2017; Suess-Reyes & Fuetsch, 2016;

Vincent, 2017). A family firm chief executive officer (CEO) may be more risk-averse,

more likely to be concerned about long-term survival, and interested in reinvesting profits

back into the business compared to nonfamily counterparts (Sánchez et al., Luis Gallizo,

& Moreno, 2019).

Succession planning constitutes a critical success factor in the performance of

family businesses and affects firms’ financial performance (Judd, 2017). Business leaders

must develop strategies to have an exit strategy in place to deal with eventful occurrences

(Lane, 2018). Even though succession strategies and continuity are crucial in family-

owned businesses, researchers have identified the lack of adequate understanding of

succession planning as one of the most crucial issues family businesses face (Vincent,

2017). A well-executed, well-created succession planning strategy may be beneficial for

continuity and for dealing with complexities associated with leadership transitions.

The absence of a succession plan may pose severe challenges to the business.

Without a succession plan, a business will encounter delays in replacing a departed CEO

(Rivolta, 2018). Long delays in naming a successor may impact shareholder reaction and

firm performance when the new CEO is appointed (Rivolta, 2018). Successors could fail

when the transition occurs if they cannot restore control of the political and cultural

changes that manifested during a leadership transition (Tichy, 2015). Successors who

disrupt their organization’s strategic goals can also contribute to the loss of financial

stability or competitive advantage (Soebbing et al., 2015). New leaders may use

repressive strategies to try and gain some domestic reputation when the transition process

is not smooth (Licht & Allen, 2018). Although family succession planning is vital to

family businesses, 47% of the time, such businesses fail to have a succession plan due to

factors such as context, relationships, process, and governance (Lockamy et al., 2016).

The failure of successors to understand the expectations of their board members and

subordinate employees could play a crucial role in the decline of an organization during

succession (Soebbing et al., 2015). Failure to engage the next generation could put family

business continuity at risk (Garcia et al., 2019).

There is a strong relationship between succession planning and financial

performance in competitive markets (Patidar et al., 2016). When leaders manage a CEO

transition well, it may improve organizational performance (Berns & Klarner, 2017). The

chance of a successor coming from the family could be enhanced by having: (a) board of

directors that includes family members, (b) formalized succession process, (c) family

business work experience, (d) potential successors develop relationships with significant

customers and suppliers, and (e) financial resources to support effective succession

(Lockamy et al., 2016). The active participation of family members in the governance of

the family firm leads to increased firm performance (Bøhren et al., 2019). The family

belief systems underpin the management’s value system, which informs the

organization’s strategic behavior (Oro & Lavarda, 2019).

When it comes to succession planning, a blend of appropriate strategies is

advisable (Stephens, 2016). The early stage of the succession planning process is vital

because family or nonfamily conflicts of interest arise early in the process (Meier &

Schier, 2016). A good succession plan must be well-timed, communicated, involve the

board of directors, flexible, and ensure the new CEO receives respect from others (Judd,

2017). Family business succession plans can involve activities such as identifying future

leaders, change of ownership, the transition of control and management, and the

development of leaders (Budhiraja & Pathak, 2018). It is importance of this early stage

due to the impact of the team’s behavioral response to the new leader (Lam et al., 2018).

An effective succession plan must include technical, political, and cultural components to

attract an executive who can influence all the dynamics needed to achieve successful

organizational performance (Tichy, 2015).

The selection process of a family business successor is somewhat different from

that of other businesses. Family members have a strong influence on the operations of

micro-family businesses (Agyapong et al., 2016). Family governance mechanisms such

as family councils, assemblies, offices, meetings, committees, and family constitutions

are necessary to regulate the relationship between the family and the business (Adams &

Quagrainie, 2018). A study into how nonfamily members are involved in family firms

indicated that family members would undermine nonfamily members who work in the

firm from being integrated successfully into the family firm (Tabor et al., 2018).

Restricted family relationships are rare but may be helpful to enhance the formalization

of roles and responsibilities of family members throughout the succession process (Daspit

et al., 2016).

The succession planning process in family businesses is often unstructured and

begins with assessing the organizational size, vision, and overall performance in the

recent past (Budhiraja & Pathak, 2018). Selecting the right candidate is what matters

most to management (Suess-Reyes & Fuetsch, 2016). Leaders of family businesses who

use formalized and informal knowledge transfer strategies during succession over

generations benefit from sustaining their competitive advantage (Boyd et al., 2015). The

succession planning process involves assessing leadership competencies in areas such as

trust, hard work, accountability, mentoring, and leadership development (Budhiraja &

Pathak, 2018).

The successor must have the ability to carry on the cherished and priced family

heritage to the next generation (Suess-Reyes & Fuetsch, 2016). Zellweger (2017) defined

next-generation engagement as their intention to actively contribute to the leadership and

sustainability of their family business through ownership, managerial, or governance

roles. The family influences the choice of successor; however, the family head has

ultimate authority and must choose carefully to avoid generational conflicts (Budhiraja &

Pathak, 2018). The low family influence could be detrimental to high organizational

performance (Hughes et al., 2018). Zhou et al. (2016) noted that family structures,

intrafamily regulation, and family control significantly impact succession in family

businesses. For example, the father plays different roles at different stages of the son’s

business knowledge development process by acting as an example, a supporter, a mentor,

and an advisor (Pham et al., 2019).

Various models proposed for succession planning include structured leadership

and mentoring training programs, forums, courses, motivation, a formal succession plan,

continuity policies, and family integration plans (Stephens, 2016). To ensure continuity

and transfer of knowledge, some family business leaders rely on trusted advisors as to the

most reliable external source of advice and knowledge. Trusted advisors can influence

the outcome of the succession process in either a positive or a negative manner,

depending on potential agency conflicts (Michel & Kammerlander, 2015). The leader

having the relevant higher education makes a positive contribution to effective succession

planning. Bozer et al. (2017) noted that family culture, spousal support, and sibling

rivalry are factors that could impact family business succession.

Developing a procedural approach for having succession conversations can be

helpful for family succession planning, according to Helin and Jebril (2016). For the next

generation to be successful, family businesses must ensure continuous growth and

development, avoiding the risk of over-admiring and instead combining the heritage with

how they want to run the company (Jameson, 2018). Families can control conflict

through stewardship, control, monitoring mechanisms, collaborations between

generations, a flexible approach, and a shared vision of future ownership and control

(Meier & Schier, 2016). A good succession strategy goes beyond corporate succession to

include handling finances to ensure business continuation (Kess & Mendlowitz, 2015).

An essential tool that an incoming executive can utilize during the transition into a

leadership role is to evaluate the level of turmoil, assess the capabilities and hurdles to

success, and seek support for the new vision through a transformational type of

leadership style (Tichy, 2015).

The family business founder wields much power in making critical decisions

relevant to ownership and beliefs in the business (Nandi et al., 2019). Horčičkova and

Stasiulis (2019) asserted that a young person’s intention to work in a family business

increases if they engage in the business during their studies. Family members must

generate and sustain the interest of young members in the business in the early stages of

their lives, asserted Ljubotina and Vadnjal (2018).

Family Routines

Family routines are part of family dynamics that can impact work-life differently

(Jaskiewicz et al., 2017). Family firm outcomes and behaviors result from the collective

psychological behaviors of individuals and family characteristics (Sharma et al., 2020).

Family psychology helps to understand individual and family characteristics and

behaviors that drive firm-level goals, strategies, resources, capabilities, behavior, and

performance (Sharma et al., 2020). Attention to family routines and how these routines

change (or not) over time can reveal additional insights regarding next-generation

engagement in the family business (Reay, 2019). Therefore, it is essential to treat family

traditions and innovations that occur because of processes developed and structures

imprinted over generations of family ownership as strategic tools (Sharma et al., 2020).

Corporate Governance in Family Firms

Governance mechanisms may be in the form of formal and informal processes,

both of whom may be equally important and profoundly influence the behavior and

performance of family firms, as is external governance mechanisms. (Chrisman et al.,

2018). Family firms could benefit from women directors who could be good forces for

change in the family firms because women can apply feminine values that humanize the

workplace to positively impact employee morale and retention of future women leaders

(Cruz et al., 2019). It is important not to include all family businesses in the same

category but rather consider the heterogeneity of family businesses and how this

influences their decisions (Michiels & Molly, 2017).

Knowledge Management in Leadership Transitions

The ability of organizations to realize the economic value from their collection of

knowledge assets and their assets of information, production distribution, and affiliation

is a significant source of competitive advantage (Ellard et al., 2018). Knowledge

management is pertinent to sustaining strategic competitive advantage and perhaps

enhanced through a vibrant business transactional atmosphere of a highly cohesive family

culture (Boyd et al., 2015). When knowledge management aligns with business strategy,

a business could have success and competitive advantage (Karamat et al., 2018).

A succession strategy in the acquisition and management of social capital can be

through building internal and external relationships and human capital with both industry

and tacit business knowledge (DeNoble et al., 2007). Even though being a knowledge-

based organization offers a competitive advantage, knowledge management remains a

challenge for senior managers (Ellard et al., 2018). Leaders wield knowledge about the

organization, such as regulatory and financial issues; therefore, it is crucial to preserve

such knowledge during leadership transitions through succession planning (Stephens,

2016). Appropriate knowledge management could improve organizational

competitiveness, performance, and productivity and facilitate the efficient use of

resources (Karamat et al., 2018).

Family businesses may be better at knowledge management compared to other

firms. Idiosyncratic knowledge transfer strategies, such as internal exposure and early

exposure of successors to the family business, can lead to increased interest in their

commitment to driving the business, maintaining a cohesive family business, creating an

adaptable family culture and fostering familiness (Bozer et al., 2017). Families could

exchange knowledge through shared family interests such as creative gift-giving, or a

beach vacation could be a great way to reinforce new patterns of interaction (Walsh &

Harrigan, 2003). Relationships among family members built on trust, loyalty, and respect

are vital in enhancing knowledge and skills (Daspit et al., 2016).

Knowledge management must be associated with a change in organizational

culture; therefore, the environment can be conducive to accumulating experiences

necessary for grooming the next generation of leaders (Mehrtak et al., 2017). Individual

components such as family business socialization and external experience play a crucial

role in ensuring the successful transfer of knowledge (Bozer et al., 2017). Also, family

firms are more effective with knowledge preservation than non-family firms (Werner et

al., 2018). Ghanaian family-owned businesses recognize knowledge and capabilities as a

valuable resource to be passed on during the succession planning process and the need for

a systematic approach that makes easy retrieval when collecting, storing, and using the

knowledge (Buckman et al., 2019).

Talent Management Strategies

Human resources can be a source of competitive advantage if they include value,

rare, inimitable, and unique qualities proposed in the business analysis framework

(Pandita & Ray, 2018). Employees are the lifeblood of an organization, the currency that

can lead a company to success (Crittenden, 2018). The quality of employees determines

the success or failure of TM, which requires significant investment (Krishnan & Scullion,

2017). Poisat, Mey, and Sharp (2018) opined that the benefits of competitive advantage

and long-term success hinge on TM as a vital part of the strategic process. Businesses

may have a valuable, rare, inimitable, and unique workforce providing a business with a

competitive edge when they manage talent proactively (Pandita & Ray, 2018). Talent

management is vital to business continuity because loyal employees are derived when the

workforce is qualified, committed, and equipped to perform their roles (Pandiyan &

Jayalashmi, 2016).

Strategic TM is defined as having the right candidate in the right job (Cui et al.,

2018). There is the need for every business strategy to include a good TM strategy for

managing the human resources, who are the implementers of the strategy (Van Zyl et al.,

2017). It is important to take attrition into account when planning the strategy to ensure

recruitment will become a more deliberate exercise instead of just being about filling a

gap (Crittenden, 2018). However, a succession planning strategy that focuses on

developing organizational capabilities through effective TM can lead to employee

engagement and retention (Alvani et al., 2016; Mihalcea, 2017; Pandita & Ray, 2018).

Engaged, skilled, and motivated employees impact competitive advantage and

business growth (Mahfoozi et al., 2018). Leavy (2018) opined that the eager, capable

employees tackling new challenges are the ones who drive innovation within

organizations. Savanevičienė and Vilčiauskaitė (2017) identified TM as the critical

competency for any organization that is future-oriented. People skills are 50% inbuilt and

50% developed; therefore, there is a possibility to develop people skills half of the time

(Eichinger, 2018). An effective TM system has the potential to help business owners deal

with complex challenges regarding demographic changes, mobility, globalization,

economic climate, competition, and business transformation (Savanevičienė &

Vilčiauskaitė, 2017). Although TM has become one of the critical strategic issues for

global organizations, much focus has been on the large multinational enterprise context

(Krishnan & Scullion, 2017). Much consideration must be placed in the TM strategy

because TM contributes to the fulfillment of business goals. Business leaders need to

have robust TM strategies in place that can help prepare employees for future succession.

The focus of leadership succession planning includes social capital strategies for

attracting and identifying potential leaders, measuring leadership competencies, learning,

and mentoring (Pedersen et al., 2018). The best TM strategies involve a robust approach

for attracting the right talent, a conducive work environment, career growth opportunities,

an excellent compensation package, and the right image (Cui et al., 2018). Other forms of

candidate potential include innovation, product and service creation, technical advances,

and individual excellence such as artificial intelligence, as well as the potential for

international or global service (Eichinger, 2018).

A broader theoretical framework is necessary to consider individual talent and

TM architecture by understanding the value to the organization, according to Sparrow

and Makram (2015). Activities in TM include attraction, recruitment, deployment,

transition, development, performance management, talent reviews, rewards, engagement,

and retention (Van Zyl et al., 2017). A dynamic contextual approach based on the size

and complexity of the business and the different organizational life stages can be a useful

to describe talent characteristics, proposed by Krishnan and Scullion (2017). Managers

should adopt a more comprehensive approach when planning for TM, integrating the

different dimensions of TM such as talent attraction, development, deployment and

retention strategies, and interventions (Erasmus et al., 2017). Leaders must balance

individual needs and organizational context when identifying which TM strategies work

best (Guérin-Marion et al., 2018). In the same vein, family business leaders may benefit

from applying TM strategies that best suit their context.

Effective TM practices must align with business strategy, values, and mechanisms

to ensure internal consistency, cultural embeddedness, management involvement, the

balance of global and local needs, and employer branding (Al Ariss et al., 2014).

Effectively managing talent involves focusing on specific value processes, including

creation, capture, leverage, and protection. These processes hinge on reflecting the

functions of the talent, explaining the potential value of the activity, and contributing to

the underlying strategic purpose of the organization (Sparrow & Makram, 2015). A

strong strategy is cyclical and not rigid, but flexible and tailored to the organization’s

culture, mission, and objectives (Pandita & Ray, 2018). Mihalcea (2017) opined that the

modern-day TM helps develop the core skills needed for increased organizational

performance regarding leadership, analytics, and advanced skills in problem-solving,

decision-making, and design-thinking. Al Ariss et al. (2014) envisioned that

technological innovation would significantly impact TM in helping companies find talent

quickly throughout the world, more effectively matching talent supply with demand.

Businesses will benefit from harnessing technology to design strategies and

models that can lead to a shared culture, engagement, construction of a new leadership

model, and career development (Deloitte, 2016). A moral and ethical dimension must be

a factor of the strategy to ensure a high degree of standards, credibility, fairness, justice,

taking responsibility, and professionalism in TM-related activities (Hess & Jepsen, 2009).

Sanders (2017) noted the difficulty in dealing with who will oversee creating and

implementing TM strategy at a senior level. Leaders must plan strategies fairly and

equitably, demonstrating to employees that they are valuable through inclusion and

equity in practice (Hughes et al., 2018). Erasmus et al. (2017) advocated for the

differentiation and segmentation of talent to ensure fair and equitable investment. Leavy

(2018) identified seven accelerants of personal learning and growth in organizational

contexts, including identifying the suitable risks, playing to individuals’ distinctive

strengths, imposing thoughtful constraints, entitlement, and stepping backward to move

forward. The ultimate strategy depends on the organization’s size, mandate, culture, and

resources (Guérin-Marion et al., 2018). Organizations can use TM to engage and retain

employees by developing specific competencies suitable for the workplace culture

(Mahfoozi et al., 2018).

TM strategies must have an inclusive approach that responds to the principles of

human potential and development-oriented expression (Savanevičienė & Vilčiauskaitė,

2017). Managers need to target employees’ distinctive strengths, encourage them to play

with others, and create momentum for climbing the learning curve (Leavy, 2018). Philpot

and Monahan (2017) encouraged the use of data-driven assessment methods that measure

talent at different levels. Neri and Wilkins (2019) viewed TM as a central strategic area;

hence, organizations must invest more eﬀort and money in developing and retaining

talent who meet or exceed performance expectations. There is a strong correlation

between TM strategies and generational cohort preferences (Poisat et al., 2018).

There is a need to formulate further insight into TM based on the use of internal

potential. Exclusive TM strategies are for attraction and selection of employees of high

potential and high efficiency (Savanevičienė & Vilčiauskaitė, 2017). Employee potential

is related to performance and promotion, with the potential to be an agile strategist,

people manager, and leader imperative during times of challenge and change (Eichinger,

2018). When organizations define the leadership potential of a potential leader, this may

avoid bias, increase office diversity, and provide economic gains (Philpot & Monahan,

2017). The strategy needs to be evidence-based to ensure a strong business plan for

sustained investment (Spofford, 2017). Other critical dimensions include engaging

members of a new generation and encouraging their involvement in the business. Smalls-

Glover et al. (2019) showed that family members’ level of engagement and involvement

has a consequence on the behavioral engagement of the younger generation.

Leadership Competencies Development

The competency approach is a strategy that involves the identification of desirable

leadership skills and attributes that are crucial and that directly contribute to performance

and outcomes (Wong, 2019). Competent employees contribute to high productivity

levels, which can lead to improved organizational performance (bin Atan & Mahmood,

2019). Some leadership competencies include the ability to establish and maintain vision,

strategy, and communication and guide, influence, monitor, and evaluate the performance

of their teams (da Silva et al., 2019). Successors need to have skills for managing the

entrepreneurial processes that drive the business model of the family firm (Clinton et al.,

2018). The successor should possess all necessary innovative ideas, excellent

communication skills, and futuristic strategies that enhance sustainability (Perrenoud &

Sullivan, 2017). Mansour et al. (2019) identified self-awareness as one of the critical

competencies required for effectively preparing leaders and ultimately reducing burnout.

Various approaches could apply when dealing with leadership competency

development with formal or non-formal programs on workplace learning, experience,

networking, researching, professional writing, mentoring, and coaching (Wong, 2019).

Wulf et al. (2018) noted that mentors could play a role in developing competency when

offering appropriate training and assignments to develop skills. Graham (2019) supported

mentoring as a strategy for building leadership competency in which the mentor can

challenge an employee to accept more challenging assignments. Training is necessary to

enhance the ability of mentors to maintain effective communication, aligning

expectations for the mentoring relationship, assessing mentees’ understanding of

research, addressing equity and diversity, fostering mentees’ independence, and

promoting mentees’ professional development (Weber-Main et al., 2019). Ensuring

appropriate educational opportunities for mentors and employees may impact TM.

Succession Planning in Ghanaian Businesses

The vital contribution that small businesses can experience with the economic

growth of developing and developed economies is quite enormous (Agyapong et al.,

2017). Small and medium businesses create employment and are instrumental in

advancing economic development and reducing poverty rates (Abor & Quartey, 2010).

Small and medium-scale businesses contribute to job creation, income generation, and

poverty reduction in emerging economies such as Ghana (Kusi et al., 2015). Family

businesses equate to a significant percentage of the business sectors in Africa and other

developing economies (Acquaah, 2011). In Ghana, small and medium businesses make

considerable contributions to the socio and economic development of the country,

including the lower-middle-income status of $1,000 per capita (Ghana, 2006). Small and

medium enterprises in Ghana contribute about 85% of manufacturing employment in the

country and around 57% of the country’s GDP (Abor & Quartey, 2010). Subsistence

agriculture accounts for 40% of GDP and forms the core of the domestic economy, with a

considerable number of small and medium businesses creating employment opportunities

in the country (Boeh-Ocansey, 1996; Tetteh & Burn, 1999).

The domestic business sector in Ghana contributes to Ghana’s economy

(Boohene, 2010). Typical domestic business activities in Ghana include tourism,

detergents, fabrics, textiles, leather, blacksmithing, tin smithing, ceramics, timber,

mining, bricks, cement, beverages, food processing, baking, furniture, electronics, agro-

processing, chemical-based products, and engineering activities (Kayanula & Quartey,

2000). There is evidence of an increase in lower-rated accommodation providers; 68%

belong to small family-operated establishments (Mensah-Ansah, 2014).

Family Businesses Contribution to Ghana’s Export Industry

The export industry in Ghana includes a) traditional exports such as cocoa beans,

gold, and other minerals, timber, and unprocessed electricity; and b) non-traditional

exports comprising of other exports not included in the main traditional export category

(Kyereboah-Coleman & Amidu, 2008). Between 2000 and 2003, the export of non-

traditional commodities experienced massive growth yielding $588.7 million – an

increase of 16.8% over the year 2000 (Agrawal & Knoeber, 1996). 63% percent of non-

traditional exports are from domestic Ghanaian owned-businesses (Kyereboah-Coleman

& Amidu, 2008). In 1983, the economic recovery program, initiated growth in the non-

traditional exports sector from $1.91 million to $62.34 million between 1984 and 1990,

accounting for 6.9% of total exports and 1% of the country’s gross domestic product

(Abor & Hinson, 2004). The value of non-traditional Ghanaian exports increases by

16.8%, while the number of exporters increase by 3.2% and the number of products by

3.9% during the same year (Agrawal & Knoeber, 1996). Based on Ghana’s Vision 2020,

the total revenue was estimated to be around $60 billion with, non-traditional exports

contributing about $12 billion (Kyereboah-Coleman & Amidu, 2008).

SMEs contribute to the economic growth in Ghana (Abor & Biekpe, 2006). Small

businesses in rural economies contribute to a country’s economic stability and lower

poverty rates (World Bank, 2014). A significant contribution that domestic business

provides to the Ghanaian economy is the indigenous technology which requires local raw

materials and equipment (Aryeetey et al., 1994). Domestic Ghanaian businesses

contribute to entrepreneurial and managerial skills, which is foundational for local

investment and sustained industrialization (Boohene, 2010). Family businesses contribute

to creating employment, encourage entrepreneurship, develop communities, and support

economic growth and development (Acquaah, 2011).

Ghanaian Women and Entrepreneurship

Women own most informal African businesses and are driven into this work by

necessity (Ndemo & Mkalama, 2019). Ghanaian women entrepreneurs are risk-takers in

terms of entrepreneurial activities (Quagrainie, 2016). Frohmann (2018) asserted that

about 70% of the informal traders in Africa are women. Kusi et al. (2015) opined that

young female operators dominate most small and medium enterprises in Ghana with low

levels of education. Like many women in developing economies, Ghanaian women

engage in entrepreneurship because of necessity as there may not be many other job

opportunities or other options for income generation (Adams et al., 2017). Although

women’s entrepreneurial activities are higher in Sub-Saharan Africa than in other

regions, male-owned businesses outperform women-owned (Campos & Gassier, 2017;

OECD/European Union, 2017).

Because traditional women’s roles involve balancing social and economic goals,

women are more prone to intrinsic or noneconomic goals (Adams et al., 2017). Women

may be predisposed to adopting informal business practices because of stereotypes and

the adverse nature of the operating environments (African Union Commission, 2018).

Adom and Asare-Yeboa (2016) noted that women who own businesses could increase

their profitability and performance by enhancing the human capital of women

entrepreneurs in the areas of the level of education, business training, and experience

from previous employment. In addition, males are socialized to be aggressive, assertive,

and innovative, while women are perceived to be more laid-back, calm, and take care of

others (Adams et al., 2017).

Succession Strategies in Ghanaian Family Businesses

Family businesses create a competitive advantage by pursuing coherent

competitive strategies that enhance firm performance (Acquaah, 2011). Ghanaian small

business marketing activities may appear simple but are complex and sophisticated

(Blankson et al., 2018). The lack of financial resources is a challenge to Ghanaian family

businesses as they may not fully explore entrepreneurial competencies embedded within

family members (Acheampong, 2018). Decision-making systems in family businesses in

Ghana are flexible, informal, and dependent on one or more of the executives (Okello-

Obura & Matovu, 2011). Family businesses operate a more flexible work environment

based on clients’ commitment, loyalty, and well-being (Acquaah, 2011). Local businesses

in Ghana harness their social networking skills and relationships with customers and staff

for survival in a competitive subsistence marketplace (Blankson et al., 2018).

Ghanaian family businesses often give priority to family members for top

management and other essential positions during succession planning (Bertrand &

Schoar, 2006). Owners may manage their small and medium businesses themselves, often

assisted by family members (Okello-Obura et al., 2009). Strong internal managerial

capabilities are crucial for micro-family firms in Ghana irrespective of the strategic

position (Agyapong et al., 2016). Ghana has a collectivist ethical culture that leads to

kinship and traditional responsibilities of caring for the extended family, as family

members automatically expect family business owners to employ from within the

extended family (Mensah-Ansah, 2014). Ferrari (2019) explored the family relational

aspects that affected women’s succession family firms and noted that gender issues play a

role during succession planning. Institutionalized social structures may lead to gender

differences that could skew the distribution of males and females in domestic Ghanaian

businesses (Boohene, 2010). Indigenous Ghanaian business strategies for competitive

positioning may include elements of morality and religion (Blankson et al., 2018). Ghana

has gained the reputation of being the only economy with more females than males in

entrepreneurship, with tourism being the sector where women outnumber men (Kelley,

2013). Further studies on how cultural and social factors impact succession planning may

be helpful.

The Role of Innovation Capabilities

Innovation is related to the performance of small businesses to increase firm

performance and respond better to competitive pressure if they harness the positive social

capital while utilizing the knowledge, bond, trust, and information generated from social

capital to innovate (Agyapong et al., 2017). Ghanaian small and medium enterprises

indulge in innovative practices; however, they need to increase the innovative capability

to improve their financial performance (Donkor et al., 2018). A micro-family firm

seeking to pursue a low-cost position or differentiation should build strong internal

managerial capabilities. (Agyapong et al., 2016). The six critical facets identified as

suitable measures of innovative capabilities include product, process, solution,

behavioral, information technology capability, and training for managers (Agyapong et

al., 2017). Innovative family firms looking to build on competitive strategies should

consider differentiation strategy rather than cost leadership (Agyapong et al., 2016).

Transition

In Section 1, I discussed some essential foundational and background information

about succession planning. I also presented the problem and purpose statements, research

questions, interview questions, and the nature of the study. I further discussed Bowen’s

(1978) FST, which constitutes the conceptual framework for this study. I presented

operational definitions, assumptions, limitations, and delimitations of the study. I

concluded this section with a review of the professional and academic literature.

In Section 2, I presented the process for the research project by detailing the

purpose of the study, the role of the researcher, research method, and design. I also

discussed population sampling, ethical impact, data collection, data analysis, reliability,

and validity.

Section 2: The Project