Factors Associated with Longevity of Small, Family-Owned Firms

By Williams, Densil; Jones, Oniel | International Journal of Entrepreneurship, January 1, 2010 | Go to article overview

Factors Associated with Longevity of Small, Family-Owned Firms


Williams, Densil, Jones, Oniel, International Journal of Entrepreneurship


ABSTRACT

This study reports on an empirical investigation into the factors that impact the longevity of small, family-owned firms from a developing economy. There is a dearth of empirical literature on the factors that influence longevity of firms in developing economies. Using variables from other empirical studies in other geographical jurisdiction, this study modelled the impact these variables have on the longevity of small, family owned businesses in Jamaica. The analysis drew on data for over 260 small, family-owned firms in Jamaica. Using the ANOVA statistical technique to derive results, the findings revealed that the possession of a succession plan, the size of the firm and, the location of the firm all impact on its longevity. The implications of these findings are explored in the paper.

Keywords: Longevity, Small, Family-Owned Firms, Developing Economies.

INTRODUCTION

It is argued that with each successive generation, the life span of family-owned businesses is reduced (Jivraj & Woods, 2002). Further, researchers have posited that only one third of family firms survive to the second generation (Ward, 2004). Indeed, it appears that the number of firms that make it through successive generations is very small. In other words, the life of many small, family-owned businesses is very short. This pattern however, has to be reversed if small and family-owned firms are to live up to their expectation as the foundation for economic growth, job creation and wealth creation, especially in small, open developing economies. To reverse this trend, it is critical that policymakers and managers in these firms understand the factors that are associated with increased longevity of small, family-owned firms. That is, they need to know what factors have helped these firms to overcome the "generational curse" and continue to operate successfully over long periods. This issue is at the heart of the research in this paper.

A plethora of work exists on the likely demographic, organisational and social factors that influence planning for continuity in family businesses (Handler & Kram, 1998). Effective succession planning is also seen as one of the strong determinants of longevity in the family business (Lank, 2001). The aim of this paper is to determine which organisational, demographic and social factors are most critical in impacting on the longevity of small, family firms in Jamaica. The extant literature posits a number of factors that are critical for increased longevity in small firms. In this paper, this work will be extended by replicating some of the variables in the Jamaican context. The goal of the study is to determine whether or not succession planning along with other factors such as; location, industry sector, firm size and, education level of the principal (owner) influence the longevity of firms in Jamaica. The guiding research question is: what internal and external factors influence the longevity of small, family-owned firms in Jamaica? This issue is under-researched in the Jamaican context. A thorough understanding of it will be critical for those who manage these firms and public policymakers who want the small firm to be the driver for economic prosperity. Further, this research will provide theorists in the field of small business research with a strong basis for building an evidence base in this line of work.

The literature argues that the factors that impact longevity may vary from one geographical location to another, given the idiosyncrasies associated with firms from different geographical locations (Lank, 2001). Some critical structural and socio-economic conditions in Jamaica (e.g. high crime levels, low growth, high debt burden, high levels of migration, inefficient government bureaucracy, inadequate infrastructure etc.) make it important that a geographically-based study be done on this location. These conditions will mediate the level of impact that these factors have on the longevity of the small, family-owned firms in Jamaica.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Factors Associated with Longevity of Small, Family-Owned Firms
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.