Majority of the time, the family business crash in the long run when the succession of the business is placed in the wrong hands. There is always this need for the older generation to pass on the business to the younger generation and a lot of the times, it is for the parents to pass on their legacy to their children. Sometimes the younger generation in the business may have no interest to succeed the business or sometimes, the parents force the children to succeed them in the business. In this situation, the idea of adequate management has to be introduced to the firm:
“It is important to recognize that management and ownership are not the same. The day-to-day management of the business may be left to one child, while ownership of the business is left to all of the children (whether or not they are active in the business). It is also possible that management may be left in the hands of key employees rather than family members” (Giarmarco, 2012, p. 59).
During the succession planning, it is important that the older generation understand that in order for the family business to remain strong in the long run, managerial positions in the firm has to be given based on adequacy. Introducing adequate management for the business does not mean that the family will lose ownership over their business.
Apart from adeqate management. the family business can avoid bad succession plan by properly preparing the younger generation for succesion; see link below.
This post addresses the critical issue of succession planning in family businesses, highlighting the potential pitfalls of placing the business in the wrong hands. You advocate for the importance of introducing adequate management and preparing the younger generation for succession to ensure the long-term success of the family business. However, your analysis lacks depth and fails to offer a nuanced understanding of the complexities involved in succession planning.
Your post appears to be normative, as you prescribe the need for adequate management and proper preparation of the younger generation without delving into the underlying factors contributing to succession failures. While you briefly mention the importance of recognizing the distinction between management and ownership, your analysis lacks analytical depth in exploring how these roles should be allocated and the criteria for determining adequacy in management.
Plus, your post lacks synthesis as it does not integrate different perspectives or theoretical frameworks to provide a comprehensive understanding of succession planning in family businesses. You could enrich your analysis by incorporating insights from academic literature or real-world case studies illustrating successful and unsuccessful succession strategies in family businesses.
Finally, while you provide a link to a Forbes article on preparing the next generation for succession, your post would benefit from additional evidence and credible sources to support your arguments. Incorporating peer-reviewed research or industry reports could strengthen the credibility of your analysis and provide readers with valuable insights into best practices in succession planning.