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Trusted advisors in a family business's succession-planning process—An agency perspective

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  • Michel, Alexandra
  • Kammerlander, Nadine

Abstract

Family business succession is a complex and challenging process, in which family members often build on the support of trusted advisors who can be seen as the most relied external source of advice and knowledge that family businesses draw on. Based on an extensive literature review, this article aims to synthesize prior research on both advisors and succession to systematically describe and analyze the role of trusted advisors during the succession-planning process. Based on arguments from agency theory, we discuss potential benefits and drawbacks associated with the involvement of trusted advisors along the four phases—trigger, preparation, selection, and training—of the succession-planning process and outline how trusted advisors can mitigate but also enhance agency costs—in particular goal divergence and information asymmetry—during each of these four phases. Subsequently, we discuss four typical constellations of advisor involvement, which vary in their agency costs and thus have different levels of bias and efficiency. We thereby outline several inefficiencies that result from the common setup in which an incumbent and a successor both rely on their own trusted advisors or a team of expert advisors and propose a balanced and efficient model of advisor involvement as a potential solution which reduces the agency costs. This conceptual article contributes to research on succession, agency theory, and trusted advisors in family firms.

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  • Michel, Alexandra & Kammerlander, Nadine, 2015. "Trusted advisors in a family business's succession-planning process—An agency perspective," Journal of Family Business Strategy, Elsevier, vol. 6(1), pages 45-57.
  • Handle: RePEc:eee:fambus:v:6:y:2015:i:1:p:45-57
    DOI: 10.1016/j.jfbs.2014.10.005
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    References listed on IDEAS

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    3. Ine Umans & Nadine Lybaert & Tensie Steijvers & Wim Voordeckers, 2020. "Succession planning in family firms: family governance practices, board of directors, and emotions," Small Business Economics, Springer, vol. 54(1), pages 189-207, January.
    4. Marta Widz & Nadine Kammerlander, 2023. "Entrepreneurial exit intentions in emerging economies: a neoinstitutional perspective," Small Business Economics, Springer, vol. 60(2), pages 615-638, February.
    5. Gregory Shumbambiri, 2023. "Inter-Generational Succession Planning in Zimbabwe’s Indigenous Family Businesses. A Case Study of The Challenges and Critical Issues For Consideration," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(2), pages 1400-1416, February.
    6. Ticián Baranyai & Miklós Kozma, 2019. "Family Firms with New Leaders in the Global Market.– A Potential Success Story?," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 69(supplemen), pages 131-162, December.
    7. Alexandra Bertschi-Michel & Nadine Kammerlander & Vanessa M. Strike, 2020. "Unearthing and Alleviating Emotions in Family Business Successions," Entrepreneurship Theory and Practice, , vol. 44(1), pages 81-108, January.
    8. Deferne, Marie & Bertschi-Michel, Alexandra & de Groote, Julia, 2023. "The role of trust in family business stakeholder relationships: A systematic literature review," Journal of Family Business Strategy, Elsevier, vol. 14(1).
    9. Barbara Iannone, 2019. "Il controllo strategico nelle imprese familiari del settore vitivinicolo. Elaborazione di una proposta," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2019(1), pages 45-72.
    10. Luis Cisneros & Mihai Ibanescu & Christian Keen & Odette Lobato-Calleros & Juan Niebla-Zatarain, 2018. "Bibliometric study of family business succession between 1939 and 2017: mapping and analyzing authors’ networks," Scientometrics, Springer;Akadémiai Kiadó, vol. 117(2), pages 919-951, November.
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