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Affective Commitment & Succession Intentions in Family Firms

In enterprising families, the family, as a social institution, is the foundation of the family business. However, intergenerational succession remains problematic: Often, children of entrepreneurial families do not intend to take over their parents’ businesses. In a new study, recently published in the scientific journal Entrepreneurship Theory and Practice, Dr. Daniela Gimenez from the Chair of Corporate Sustainability, TUM School of Management in Freising, and her co-authors examine the role of affective commitment, i.e. the emotional attachment to or identification with the firm, in the relationship between family business exposure and succession intentions. Authors furthermore address the moderating role of gender in this relationship.

Dr. Daniela Gimenez, Post-Doc Researcher at the Chair of Corporate Sustainability

While previous studies have focused on the impact of family characteristics on intergenerational succession, such as, among others, preparation level of the successor, parental roles, and family rivalries, Dr. Gimenez and her colleagues examine the paradoxical role played by family business exposure, i.e. children’s exposure to entrepreneurship and their experience in the family firm. Previous research on this has been inconsistent, possibly due to a lack of them exploring the psychological mechanisms between exposure and succession intentions, as well as family and individual level contingencies, according to the authors. “Our idea was to go one step backward and see how intergenerational family relationships influence children to succeed in family businesses because even nowadays intergenerational family successions are still problematic. In other words, we wanted to understand the relationship between the children, and the family businesses by having a family perspective”, explains Dr. Gimenez.

The findings of the study indicate that affective commitment partially mediates the relationship between family business exposure and offspring’s succession intentions. In the family business context, children’s exposure to entrepreneurship and their experience in the family firm provides a conduit for the exchange of information and access to opportunities, advice, and moral support. Further, exposure to the family business helps children to construct their leadership identity through key interactions with family members, which causes the child to form an attachment to the family business, and subsequently increases the child’s overall intentions to succeed in the family firm.

“We believe that family businesses could take advantage of this work, as it is clarifying the role of exposure and affective commitment. Therefore, if enterprising families want to keep their business within the family, we advise them to expose their children to the family business (i.e. talking about the family business, working in it); in this way, they can develop a positive and strong connection to the family business, leading them to pursue a career in the family business”, says Gimenez.

Researchers also find that the relationship between family business exposure and affective commitment has a gendered dimension. While exposure to the family firm matters for both sexes, it leads to greater family business commitment for sons than it does for daughters. A possible explanation: “Men and women have differences in the socialization process, and of course, this is translated into how children are involved within the family and the family business. For example, sons may be more exposed to the family business because business owners are mostly men (the father), therefore sons benefit from these interactions. Additionally, there is a cultural practice of the primogenitor in which the firstborn and typically male inherit the business, leaving daughters out of the equation for being potential successors.”

In conclusion, for families, the findings of the study help in clarifying the important role played by exposure and affective commitment on a potential family business successor’s succession intention. If, in enterprising families, the goal is to keep the business in the family, research suggests, developing affective commitment in future successors is vital.

The post Affective Commitment & Succession Intentions in Family Firms appeared first on Technical University of Munich – School of Management.

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