Succession Planning in Black Owned Family Businesses: A South African Perspective
A significant number of businesses existing in South Africa originated as family owned businesses and contribute substantially to employment creation, poverty eradication and wealth creation. However, globally the longevity of family businesses through generations remains a major cause for concern for all stakeholders. South African economy is characterised by a history of apartheid, where prior to 1994, the black majority only owned less than 5 percent of the businesses active in the economy. The economy is swiftly taking a turn and more black businesses are emerging. This study focused on understanding the factors that influence succession planning decisions in black owned family businesses. The study followed an exploratory qualitative approach, using semi structured interviews. Thirteen black family owned business owners were interviewed. The key findings showed that possible successors in family owned businesses regard the successor related factors as the predominant drivers of management succession. The successor's commitment to and interest in the business has a strong influence on decisions and criteria design across all the stages of the management succession process.