The factors of family business successor readiness and how their impact on the business transition from successors’ perspectives

Family businesses contribute more than 50% of Gross Domestic Product in global economy, though, only 13 percent of family businesses survive through third generation. Family business succession is a key to reduce the failure rate and leads to sustainable business. Recent literatures have identified many factors that lead to successful succession in family business. Nevertheless, there were few researches that focused on the successors’ perspectives. This paper aimed to 1) study the factors of family business successor readiness and 2) investigate the obstacles that are mostly found during the succession process and factors that lead to successful succession in family business from successors’ perspectives. Based on qualitative research, the study was undertaken in Thailand among eight family business successors who ran medium to large-size family businesses. They already had a successful transition in their family businesses. The participants were selected by purposive sampling technique; including family business successors from pharmaceutical industry, tea industry, packaging industry, energy industry, food processing industry, and shoe industry. The findings revealed that there were nine factors that contribute to the successor’s readiness: 1) working experience in family company, 2) working experience in other company, 3) industry specific knowledge, 4) reward or cash compensation, 5) personal interests or needs, 6) commitment to the company, 7) relationship among family members, 8) family harmony, and 9) trust in successor's ability. By addressing these nine factors appropriately from both the predecessors and successors, the family business will ensure its continuity into the future.