SOURCE:

Faculty: Management Sciences
Department: Business Administration

CONTRIBUTORS:

Imhanrenialena, B.
Osisioma, H. E.

ABSTRACT:

Family businesses in Nigeria have a long pathetic history of dying with their founders, and thereby impacting negatively on investment, employment, and Gross Domestic Product of the nation. This research therefore seeks to establish the nature of the relationship between succession planning and the sustainability of family businesses in Nigeria with particular emphasis on Lagos State. Breaking this broad objective into achievable form, the following specific objectives were derived: To determine the relationship between delayed-retirement of family business owner-managers and the perpetuity of the business; to determine the relationship between mentoring and successful management transference in family businesses; to evaluate the relationship between the appointment of non-family member Chief Executive Officers (CEOs) as successors in the absence of competent ones in family businesses and the continuous viability of the business; and to ascertain the relationship between family elders’ forum’s ability to resolve succession crisis and harmonious working relationship in family businesses. Survey Research Design was adopted for the study and Taro Yamane’s formula (1964) was used in determining the sample size. A total of 354 respondents drawn from SMEs in Lagos State participated in the study. To ensure the soundness of the research instrument, the Content Validity was used to test for the validity of the instrument while the Split-Halves Method was used in testing for the reliability of the instrument. In testing the research hypotheses formulated in line with the specific objectives, the F-test statistical tool was applied. The findings indicate the following: First, that there is a significant adverse linear relationship between delayed-retirement of family business owner-managers and the business perpetuity as the calculated F-ratio of 58.316 is greater than the F-distribution table value of 3.85 at 0.05 level of significance and at 1 degree of freedom. Second, that significant linear relationship exists between mentoring and successful management transference in family businesses as the calculated F-ratio of 22,170,75.427 exceedsthe F-distribution table value of 3.85. Third, that there is a significant linear relationship between the appointment ofnon-family member Chief Executive Officers as successors in family businesses in the absence of competent family member CEOs and the business continuous viabilityas the calculated F-ratio value of 28,204,57.581 is greater than the F-distribution table value of 3.85. Fourth, that family elders’ forum’s ability to resolve succession crisis is significantly related to harmonious working relationship in family businessesas the calculated F-ratio of 16,401,86.734 is greater than the F-critical table value of 3.85. These findings imply that failure of family business owner-managers in Nigeria to have a comprehensive succession plan in place will continue to expose their numerous workers to sudden job lose, throwing their families from affluence to poverty, and ultimately negating the nation’s GDP as the business will continue to fail to outlive their founders.