Business Succession Planning in Indian MSM-FOBEs: A Study Based on Managerial-Role Employees. (September 2014)

• Record Type: Journal Article
• Authors: Jain, Sudhir Kumar; Jain, Nalin
• Is Part Of: Global business review. Volume 15:Number 3(2014)
• Page Start: 517
• Page End: 530
• Publication Date: 2014-09
• Subjects: Business succession planning -- Succession planning issues -- MSM-FOBEs (Micro, Small and Medium Family Owned Business Enterprises) -- Managerial-Role employees; Economic history -- 1990- -- Periodicals; Industrial management -- Periodicals; Business -- Periodicals; Commerce -- Periodicals; 650.05
• DOI: 10.1177/0972150914535138
• Languages: English
• ISSNs: 0972-1509

Abstract

Family owned business enterprises (FOBEs) are prolific contributors to the Indian economy. Micro, small and medium family owned business enterprises (MSM-FOBEs) form a substantial portion of Indian FOBEs. MSM-FOBEs are highly vulnerable to intergenerational business succession. The extent of succession planning, an important factor for the success of business succession, varies with the size of the MSM-FOBE. The number of managerial-role employees is one of the indicators of the size of the MSM-FOBE. The importance of business succession planning to the owner–manager is one of the determinants of the extent of succession planning in any MSM-FOBE. The importance of six succession planning issues to owner–managers is compared on the number of the managerial-role employees in their MSM-FOBEs. The study reveals higher importance of five succession issues to owner–managers of larger MSM-FOBEs that is, those with higher number of managerial-role employees. The lower importance of most succession planning issues among owner–managers of small Indian MSM-FOBEs (with no managerial-role employees) could be one of the reasons for their higher vulnerability to business succession.