Challenges to intra-family succession in South African townships

Abstract

While family-owned businesses contribute favourably to the economy, the fact that they seldom survive a generational transition provides ample justification for undertaking to determine the factors which militate against the successful planning for succession in family-owned businesses in South Africa. Mimicking the mixed research approach, this paper adopted an integrated approach in the collection and analysis of the data. The paper was based on quantitative data from 120 participants collected by the way of a semi-structured questionnaire administered to family-businesses in a designated township in South Africa. The study profited from the qualitative insights concomitant with the use of open-ended question in the questionnaire. The data was analysed using the Statistical Package for Social Sciences (SPSS) software. The results concede that the incapability of family owned businesses to ensure competent family leadership across generations is still a major problem today. In particular, the results noted that most family-owned businesses were unable to identify their future needs with respect to talents; found it difficult to discuss potential successors with members of their families and could not generate a pool of suitable candidates. Other obstacles to succession planning included the lack of interest on the part of the members of the family and complicated emotional factors in the incumbent-successor relationship. This paper contributes to the succession planning discourse with a specific reference to family-owned businesses in South African townships. Recommendations were made.