A RESEARCH ON SUCCESSION MANAGEMENT IN FAMILY COMPANIES

The world economy depends heavily on the continuity and success of the family business. It is unfortunate, even alarming, that such a vital force has such a poor survival rate. Less than one third of family businesses survive the succession from first to second generation ownership. Of those that do, about half do not survive the succession from second to third generation ownership. There are four basic reasons why family firms fail to transfer the business from generation to generation successfully: 1-lack of viability of the business; 2-lack of planning, 3- little desire on the owner's part to transfer the firm; 4-reluctance of offspring to join the firm. These factors, alone or in combination, make transferring a family business difficult, if not impossible. The primary cause for failure, however, is the lack of planning. With the right plans in place, the business, in most cases, will remain healthy. (Bowman, 2010:3).

Keywords:

Family Business, Succession Management Succession Planning,

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Bowman, Nancy, http://www.sba.gov/idc/groups/public/documents/sba homepage/serv sbp exit.pdf, 2011, 3
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