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Factors Dominating the Continuity and Decline of Family Businesses

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  • Rasoul Shafieyoon
  • Marjan Mansouri

Abstract

A family business refers to the ownership and management of specific business run by two or more members of a family. Such transactions are functionally varied and involve diverse industrial activities playing a pivotal role in national economy. The present essay aims to identify effective factors dominating the continuity and decline of family businesses to establish a conceptual model of continuity and succession for family businesses. As such, 3 corollary questions were formulated: a) why does continuity and succession in a family business last for two or three generations? b) What factors can guarantee the continuity and decline of family businesses? c) Which factors are influential in governing continuity and decline of family businesses? For this purpose, a descriptive research design was used in which from the population of successful owner managers running a family business in Iran, a sample of nine was selected using a purposive sampling method. Initially, the existing literature on family business was analyzed by Delph: a procedure based on which a questionnaire with 24 statements addressing the continuity and decline of family businesses was developed. Then, a semi-structured interview with the sample members helped to identify 10 more factors. Accordingly, a questionnaire with 34 statements was developed and administered to the sample members who were required to respond to each statement by providing a percentage value showing the relevant distance of the statement from the ideal state. The rank ordered analysis of the data by TOPSIS procedure revealed a number of insightful facts about the continuity and decline of family businesses.

Suggested Citation

  • Rasoul Shafieyoon & Marjan Mansouri, 2014. "Factors Dominating the Continuity and Decline of Family Businesses," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(1), pages 327-343, January.
    • Handle: RePEc:hur:ijarbs:v:4:y:2014:i:1:p:327-343
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    References listed on IDEAS

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    1. Miller, Danny & Steier, Lloyd & Le Breton-Miller, Isabelle, 2003. "Lost in time: intergenerational succession, change, and failure in family business," Journal of Business Venturing, Elsevier, vol. 18(4), pages 513-531, July.
    2. Peter S. Davis & Paula D. Harveston, 1998. "The Influence of Family on the Family Business Succession Process: a Multi-Generational Perspective," Entrepreneurship Theory and Practice, , vol. 22(3), pages 31-53, April.
    3. Christian Koropp & Dietmar Grichnik & André Gygax, 2013. "Succession financing in family firms," Small Business Economics, Springer, vol. 41(2), pages 315-334, August.
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