Academic journal article Journal of Emerging Trends in Economics and Management Sciences

Culture Determinants and Family Business Succession in Jos Metropolis, Plateau State Nigeria

Academic journal article Journal of Emerging Trends in Economics and Management Sciences

Culture Determinants and Family Business Succession in Jos Metropolis, Plateau State Nigeria

Article excerpt


Family businesses are one of the dominant entrepreneurial forces in today's global economy but their poor survival rate is a continuing source of concern all over the world. They are culture specific and researchers need to consider the way in which culture may be impacting positively or negatively on them as firm's culture has a relatively weak influence on an individual's core culture beliefs and values. This study therefore examined the impact of culture determinants such as age, extended family system, inheritance tradition (preference for sons, marriage, etc) and education (formal training and development) on family business succession with a focal point among small and medium enterprises in Jos Metropolis, Plateau State. Using a cross-sectional survey, structured questionnaire schedule was administered to obtain data from 372 SMEs in various sectors. Data from the questionnaire were analysed using summary statistics, binomial logistic regression analysis and Pearson correlation coefficient in establishing preliminary relationships among the study variables. The findings of the binomial logistics indicates that all the determinants of culture have significant impact on the successful succession of family businesses while the result of the Pearson correlation coefficient shows that extended family system followed by inheritance law has the highest magnitude effect on successful succession of family business. It was recommended that founders of family businesses should put in place sound policies in business operation and succession plans to forestall any problem that may arise through cultural laws such as extended family system, inheritance law etc as only through this can a long-term functioning of the business operations be ensured among others. It is hoped that the study findings and the integrated framework provide family firms, professionals, academics and policy makers with an insight to cultural factors contributing to successful succession in family firms as understanding these factors is the keystone to reducing the high mortality rate of this important segment in the economy.

Keywords: cultural determinants (age, extended family system, inheritance tradition, education) and Family business succession

(ProQuest: ... denotes formulae omitted.)


The size of the family business component of the Nigerian economy suggests that it is a predominant way of doing business in the country (Oluwatayo, 1999; Central Bank of Nigeria, 2002; Adelaja, 2006). The "European Group of Family Enterprises " and the 'Family Business Network"(2008), defines family business as a company whose ownership and management are concentrated in one or more families, with at least one member of the family at the helm and control of the business and others are being groomed or considered for eventual leadership. One can say therefore that family business is quite simply the "wider-lens" view of entrepreneurship as the initial business efforts of one or more family members grow and change over time. Even Sexton and Bowman-Upton, (1991) opines that family businesses has entrepreneurship as its start and heart.

The poor survival rate of these firms is a continuing source of concern given the dominance of family businesses in so many national economies all over the world as only 13 percent survive through the third generation (Sharma, 1999, Heck & Trent, 1999). According to Davis and Harveston, (1998) just 30% of family businesses see the light of the day beyond the first generation while about 10% to 15% go beyond third generation. In Nigeria more than 70% of SMEs die before their founders as most of them are not able to survive a generational transition (Lansberg & Astrachan, 1994; Nworah, 2011). Although successful family businesses still abound in Nigeria such as the Ibrus Groups, the Bruce family's Domino Group, Dangote Group, the Dantata family business, the Ekene Dili-Chukwu transport, the Iyare transport, Owodunni & Sons, Ehidenro & Sons among others (Momoh, 2010). …

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