Successor development in family firms
Authors
Sardeshmukh, Shruti R
Issue Date
2008-05
Type
Electronic thesis
Thesis
Thesis
Language
ENG
Keywords
Management and technology
Alternative Title
Abstract
Family businesses are an important aspect of the economic landscape. In a family firm,
succession is one of the most important strategic decisions. This study attempts to
understand successor development dynamics as it looks at the relative contributions of
internal and external development. Internal development is the primary source of firm-specific human capital, while external development is associated with transferable and
general human capital. This study pulls together extant theoretical and empirical
literature in HRM, conflict theory, and family business studies. Through this process, it
develops an integrative model of successor development to understand how internal and
external development impact the commitment and self-efficacy of the successor, and
conflict and turnover in the senior management. This study also sheds light on the black
box of assumed relationships between demographic variables and psychological states of
senior managers.
This study finds that firm-specific human capital developed through internal work
experience is positively associated with affective commitment and self-efficacy – both
managerial and entrepreneurial. In particular, developmental intensity of internal work
experience is positively associated with both entrepreneurial and managerial self-efficacy. On the other hand, self-efficacy and commitment affect the conflict associated
with succession in the family business. This study also finds that external developmental
experiences increase conflict associated with succession. By applying the two-dimensional structure of conflict to the succession process, this study finds differential impact of cognitive and affective conflict on turnover in the family business. In particular, the data supported the prediction that affective conflict would be positively related to turnover, and such a relationship did not exist for cognitive conflict. While exploring the developmental processes, this study finds that it is essential to measure work experience both qualitatively and quantitatively. The number of years worked outside the family business and the developmental intensity of such external work
experience affected conflict in different ways. Further, entrepreneurial self-efficacy and
managerial self-efficacy were affected by the developmental intensity of work
experience and had no relationship with the duration of work experience. This study also
offers a promising first step in the construction of a short developmental intensity scale
for family business successors.
Description
May 2008
School of Management
School of Management
Full Citation
Publisher
Rensselaer Polytechnic Institute, Troy, NY