Key Considerations for Succession Planning in Family Firms

Abstract

Business succession in family firms represents a significant transformation involving generational change that occurs only once every few decades; therefore, the formulation of a succession plan is of even greater importance than in general corporate contexts. This transition process often entails not merely the selection of a successor but also a shift in management leadership and organizational transformation. Consequently, it is desirable to explicitly define the transition process in advance and to implement it over a sufficient period of time. This paper organizes and examines critical points in formulating succession plans for family businesses, including the training and education process, the successor selection process, and methods for resolving intergenerational conflicts.