Determining the factors which positively affect the intra-family chief executive officer succession of UK small and medium-sized companies

A change in Chief Executive Officer (CEO) is a critical event in the life of any business. For family businesses the stakes can be higher, as failure may lead to the dual issues of business collapse and significant family harm. Intra-family business CEO succession is the transfer of leadership to a different member of the family and is a strategic direction family businesses take, even if sacrificing performance across generations to secure long-term control benefits. The research aims to determine the factors which positively affect the intra-family CEO succession of UK Small and Medium companies as gaps were identified in the research of businesses that had been through a succession across a range of areas. This research uses a deductive research design to test the existing theory and combines theoretical conceptualisations developed within the literature review with the aim of providing new theory and insight into the issues. Quantitative data was collected from primary and secondary sources from 230 UK Small and Medium Enterprises (SMEs) which identified as family businesses and had been through a succession. The questionnaires were completed by company directors and the questions consisted of measures relating to the succession event, processes and outcomes. The data collected was tested empirically using process tracing and regression analysis. Findings show that disagreements relating to the initial planning made an intra-family CEO more likely as did a discussion of passing control to a professional manager. It was found that a family business with higher proportions of senior management, higher levels of generational involvement and higher levels of experience led to an increasingly likely succession to an intra-family CEO. This finding took an additional step in the understanding of elements of the Family Influence on Power, Experience and Culture model. The thesis also found, empirically, that satisfaction with the succession process increased with the presence of advisors and that there was a positive relationship between director stability and profit and a negative relationship with management stability and profit. The findings indicated that a degree of externality in the succession contributes to a positive intra-family CEO succession outcome.