Family business literature reveals that the majority of family businesses do not make it to the second generation, and quite a few are fortunate to be passed onto the third generation. Succession planning is the critical issue that enhances continuity of the family business. Relational influences indicate that the balancing of family systems and business systems is more likely to encourage high quality succession. The development of effective practical governance systems can help the family business achieve its strategy. External influences indicate that owner role adjustment, defined as the predecessor’s “letting go” in the firm, as well as the development and mentoring of the successor, shape the effectiveness of succession in the family business.

Every business organisation has a unique set of challenges and problems. The family business is mainly affected by personal factors and family political influences. Most family business political influences are based on succession. Many of these problems exist in corporate business environments, but can be exaggerated in a family business. Family businesses go through various stages of growth and development over time. Many of these challenges will be found once the second and subsequent generations enter the business. One of the key problems is succession planning. Most family organisations do not have a plan for handing the power to the next generation, leading to great political conflicts and divisions. Despite the foregoing problems, family business is the world’s dominant form of business organisation. Based on figures compiled by the Family Firm Institute (FFI), in the Barclays Wealth Insights 2009, family firms comprise 80% to 90% of all businesses in North America. In the United Kingdom 75% of all businesses are family businesses. Some of the world’s biggest and best-known companies are family-owned. In the United States, some 37% of Fortune 500 companies are family-owned. In the global beer industry there are two family owned businesses in the top five, namely the Anheuser Busch Inbev Brewing Company and Heineken Breweries. Charlene de Carvalho-Heineken, a Heineken family member is delegate member of the Board of directors of Heineken Holding N.V. (Heineken Annual Report, 2011).This research report investigated succession at Heineken (as a family business). The researcher employed a mixed methodology approach where both quantitative and qualitative data collection instruments were used to gather data from two different groups of respondents (Heineken Operational Company Executives and Heineken Expatriates). Numerous attempts were made to contact Mrs Charlene de Carvalho-Heineken as well as other members of the Heineken family, without success. None of the questionnaires were returned. The research concluded that despite the fact that Heineken management has been highly professionalised with the majority of senior management structures filled with non-family members; the company is still a family business because 50.005% of the shareholding is held by Mrs. de Carvalho Heineken who is a family member. The research also observed that Mrs. de Carvalho Heineken sits on the Heineken Board of Directors. There is also an interesting side to the family ownership of the Heineken business. According to the Heineken Group’s 2009 Annual Report, the Hoyer family and Heineken family own L’Arche Green, a company that holds 58.78% interest in Heineken Holdings. This scenario confirms earlier research findings that according to the Agency Theory, managers who are not owners will not watch over the affairs of a firm as diligently as owners managing the firm themselves. The placement of Mrs.de Carvalho Heineken and Mr. D.P. Hoyer on Board of Directors is therefore very strategic in terms of maintaining the “familiness” of the Heineken business. Although respondents were not as direct as to whether there was a succession plan at Heineken, available documents reveal that indeed there is a succession plan at the company. It is interesting to note that Mrs. de Carvalho Heineken has been a member of the Executive Board of Directors since the age of thirty-four (she was nominated in 1988). This type of exposure to the Heineken business would went a long way in preparing Mrs. de Carvalho-Heineken for future positions. Her experience as a member of the Executive Board of Directors therefore confirms results of studies that found that positive firm performance by family successors is associated with successor’s development and intergenerational relationships, succession planning, successor’s potential capability, commitment to the firm and successor’s business skills.

This doctoral dissertation utilizes survey research design and an interview research design to compare the influence of cultural factors on successful succession in South African and American family owned business (FOB’s). The target populations consisted of owner managers and successors of FOB’s located in two countries: USA (State of Indiana) and South Africa (Indian South Africans). The qualitative research methodology was based on 1:1 interviews with 10 FOB’s in South Africa and the USA. The survey research methodology was based on a cross-sectional survey and the research design was correlational. The independent variables included nine cultural dimensions of the target populations measured using a dedicated survey instrument. The dependent variable (Perceived Success) was the relative success of each participant in the target population, with respect to his/her alleged levels of accomplishment in the succession processes. The demographic characteristics of the members of the target populations were also recorded. Correlative relationships between nine reliably measured cultural dimensions, seven demographic characteristics, and the Perceived Success of the succession process were identified. Differences between the populations in USA and South Africa were apparent. Multiple Linear Regression analysis indicated that the most important predictor of Perceived Success in the USA population was Performance Orientation, followed in rank order by In-Group Collectivism, Assertiveness, and Uncertainty Avoidance. Demographic variables had no significant effect on the relationship between Predicted Success and the cultural dimensions of the USA population. In comparison the most important predictor of Perceived Success in the Indian South African population was Uncertainty Avoidance, followed in rank order by Performance Orientation, Future Orientation, the age of the participant, and the number of people who worked in the participant’s organization. The combined model between the USA and the Indian South African FOB’s indicated that the most important predictor for perceived success was Uncertainty Avoidance, followed in rank order by In- Group Collectivism, Performance Orientation and Assertiveness. Evidence is provided to conclude that the relative importance of cultural dimensions and demographic characteristics to the succession planning of owner managers and successors in South Africa was significantly different to those of their western counterparts.

This doctoral dissertation utilizes survey research design and an interview research design to compare the influence of cultural factors on successful succession in South African and American family owned business (FOB’s). The target populations consisted of owner managers and successors of FOB’s located in two countries: USA (State of Indiana) and South Africa (Indian South Africans). The qualitative research methodology was based on 1:1 interviews with 10 FOB’s in South Africa and the USA. The survey research methodology was based on a cross-sectional survey and the research design was correlational. The independent variables included nine cultural dimensions of the target populations measured using a dedicated survey instrument. The dependent variable (Perceived Success) was the relative success of each participant in the target population, with respect to his/her alleged levels of accomplishment in the succession processes. The demographic characteristics of the members of the target populations were also recorded. Correlative relationships between nine reliably measured cultural dimensions, seven demographic characteristics, and the Perceived Success of the succession process were identified. Differences between the populations in USA and South Africa were apparent. Multiple Linear Regression analysis indicated that the most important predictor of Perceived Success in the USA population was Performance Orientation, followed in rank order by In-Group Collectivism, Assertiveness, and Uncertainty Avoidance. Demographic variables had no significant effect on the relationship between Predicted Success and the cultural dimensions of the USA population. In comparison the most important predictor of Perceived Success in the Indian South African population was Uncertainty Avoidance, followed in rank order by Performance Orientation, Future Orientation, the age of the participant, and the number of people who worked in the participant’s organization. The combined model between the USA and the Indian South African FOB’s indicated that the most important predictor for perceived success was Uncertainty Avoidance, followed in rank order by In- Group Collectivism, Performance Orientation and Assertiveness. Evidence is provided to conclude that the relative importance of cultural dimensions and demographic characteristics to the succession planning of owner managers and successors in South Africa was significantly different to those of their western counterparts.

Thesis (MTech (Business Administration (Entrepreneurship))--Cape Peninsula University of Technology, 2017. / Family-owned businesses have long played a significant role in the economies of the developed countries and are rapidly becoming an equally dominant force in those of developing countries. Family businesses are also recognised as a potential driver of economic growth and the creation of wealth throughout the world. The significant contribution which family businesses have been making to the South African economy over the last 300 years is made evident by the fact that approximately 80% of businesses in South Africa could be classified as family businesses and the equally compelling fact that they comprised of the order of 60% of the companies which were listed on the (JSE) Johannesburg Stock Exchange during its infancy. The main objective of the study was to determine the drivers of planning for succession in family-owned businesses in the township of Gugulethu in Cape Town in South Africa. The study also undertook to investigate the challenges which family-owned businesses encounter as they endeavour to transfer ownership and control from one generation to the next. The fact that although family-owned businesses contribute significantly to the economy, very often they do not survive a generational transition provides ample justification for undertaking to determine the factors which contribute to successful successions. This research study took the form of a real-time, longitudinal study in which the researcher could experience how the succession process unfolds in the family-owned businesses of the respondents and participants who made up the research sample. The study made use of a mixed methods approach to collect and analyse the data. In the quantitative study, questionnaires were administered to 120 owners and managers of family-owned businesses, while the qualitative data were obtained from in-depth interviews with owners and managers. The quantitative data were analysed using the Statistical Package for the Social Sciences (SPSS) software, while the data which were obtained from the face-to-face interviews were analysed by means of thematic analysis.

Given the predicted increase in the number of family businesses owned and/or managed by siblings (Sibling Partnerships), as well as the lack of understanding and research attention given to such sibling teams, the purpose of this study was to contribute to the more effective functioning of such family businesses in South Africa by identifying the factors that impact on their success. With this purpose in mind, the primary objective was to identify, investigate and empirically test the possible influences of, and relationships between, various factors and the Perceived success of Sibling Partnerships. This study sets out to integrate prior findings and theories on team effectiveness and family relationships, to find support for these theories in the family business literature, and to incorporate these findings into a comprehensive model. The literature study revealed 5 main categories (context, composition, structure, processes, and people) of constructs influencing the Perceived success of sibling teams. Within these 5 main constructs, 13 underlying independent variables were identified and hypothesised to influence measures of effectiveness of sibling teams, namely the dependent variable Perceived success, and the 2 intermediate variables Financial performance and Family harmony. Of the 13 underlying independent variables, 6 were categorised as task-based and 7 as relational-based factors. In addition, hypotheses were formulated for possible relationships between the various task-based constructs (context, composition and structure) and the processes and people constructs. Each construct was clearly defined and then operationalised. Operationalisation was done by using reliable and valid items sourced from tested measuring instruments used in previous studies, as well as several self-generated items based on secondary sources. A structured questionnaire was made available to respondents identified by means of the convenience snowball sampling technique, and the data collected from 371 usable questionnaires was subjected to various statistical analyses. An exploratory factor analysis was conducted, and Cronbach-alpha coefficients were calculated to confirm the validity and reliability of the measuring instrument. The 6 task-based latent variables were confirmed by the exploratory factor analysis. However, all the other latent variables, as originally intended in the theoretical model, could not be confirmed. Instead, 3 dependent variables were identified, namely Financial performance, Growth performance and Satisfaction with work and family relationships, and 6 relational-based constructs, with some changes, did emerge. Structural Equation Modelling (SEM) was the main statistical procedure used to test the significance of the relationships hypothesised between the various independent and dependent variables. Because of sample size restrictions the conceptual model could not be subjected to SEM as a whole; consequently 10 submodels were identified and subjected to further analysis. The following independent variables were identified as influencing the dependent variables in this study: • Internal context • Complementary skills • Leadership • Shared dream • Fairness • Sibling relationship • Non-family members • No other family members (spouses and non-active siblings) In addition, the factors Complementary skills, Leadership, Past parent involvement, No present parent involvement, and No other family members, were identified as significantly influencing the relationship between the siblings involved in the Sibling Partnership. Furthermore, an Analysis of Variance (ANOVA), Multiple Linear Regression analysis and t-tests were undertaken to determine the influence of demographic variables on the dependent variables. How ownership is shared in a family business involving siblings, the shareholding between the siblings themselves, and the nature of leadership between the siblings, has been found to influence the iv dependent variables in the present study. In addition, a Sibling Partnership is likely to perform most effectively when it is composed of a relatively young sibling team that has a small age gap between the members, and business performance will improve as the siblings gain work experience together, and as the number of employees increase. This study has added to the empirical body of family business research by investigating a particularly limited segment of the literature, namely Sibling Partnerships in family businesses. By identifying and developing various models that outline the most significant factors that influence the success of such family business partnerships, this study offers recommendations and suggestions for managing family businesses involving siblings, in such a way as to enrich their family relationships and to improve the financial performance of their businesses.