Academic journal article Journal of Managerial Issues

Succession-Related Role Transitions in Family Firms: The Impact of Proactive Personality

Academic journal article Journal of Managerial Issues

Succession-Related Role Transitions in Family Firms: The Impact of Proactive Personality

Article excerpt

One of the principal challenges for the continuity of a family firm is the transfer of leadership and ownership across generations. Research indicates that only a small percentage of family firms are able to survive this transition (Ward, 1997, 2004), which explains why many family business scholars focus on understanding factors affecting the succession process. In the context of family firms, succession refers to the transfer of leadership and ownership of the firm to family members or other outside parties (Le Breton-Miller et al, 2004; Sharma et al., 2001). The succession process occurs over long periods of time, is marked by different events, and influenced by characteristics of the individuals involved (Churchill and Hatten, 1987; Handler, 1990; Le Breton-Miller et al, 2004). Several integrative frameworks explain the succession process in family firms (e.g., Le-Breton-Miller et al, 2004; Royer et al., 2008; Sharma et al., 2001); however, one aspect that is not well understood and needs investigation is the manner in which successor and incumbent personality congruence affects the succession process (Daspit et al., 2016; Long and Chrisman, 2014).

Because change is an inherent part of succession, this paper focuses on the proactive personality trait which captures an individual's tendency to bring about meaningful change in his or her environment (Bateman and Crant, 1993). Previous research in organizational behavior suggests that the personality of incumbents and successors influences role transitions during succession (Ashforth and Saks, 1995). Specifically, those who score high on the proactive personality trait tend to be well suited for changes associated with the succession process such as learning new roles and making decisions independently (Cabrera-Suarez, 2005; Handler, 1994). However, drawing on both the succession and proactive personality literatures, this paper theorizes that the proactive personality of the incumbent and successor may or may not lead to effective role transitions during the succession process depending upon the personality congruence of incumbent/successor dyads.

The focus of this paper is leadership succession involving family members, which encompasses the transfer of responsibility for the ongoing management of the firm from members of senior to the junior generations (Blumentritt et al., 2013). The paper explicates the effects of incumbent and successor personality congruence relative to a key aspect of the intra-family succession process: effective role transition. While incumbent leaders have the ability to facilitate the succession process by nurturing and developing the successor (Cabrera-Suarez, 2005; Cadieux, 2007; Le Breton-Miller et al, 2004), these powerful actors often tend to resist the changes necessary for the transfer of leadership to a successor, and this can cause role transitions during and following changes of leadership to be less effective (Cadieux, 2007; Handler, 1994; Lansberg, 1988; Long and Chrisman, 2014; Sharma et al., 2001, Sonnenfeld and Spence, 1989). Therefore, theorizing in this paper considers the leader's readiness for change which describes the incumbent's cognitive state of readiness to move forward with the succession process and to transfer authority as well as decision-making to the successor (Michael-Tsabari and Weiss, 2015). (1) This paper focuses on two contexts: (1) when the incumbent is ready for the role transition, and (2) when the incumbent is not ready for transition.

Theorizing about how incumbent and successor personality congruence, with emphasis on the proactive personality trait, can explain the effectiveness of role transitions both during and following the transfer of intra-family leadership. Given that multiple factors may affect the succession process, it is important to note the following four assumptions. The first assumption is that there is an intention on the part of the dominant coalition in the family business to transfer managerial control from one family member to another. …

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