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The Importance Of Planning For Succession In The Family Business Before It Is Too Late: A Case Study Of A Small Manufacturing Firm

Author

Listed:
  • Francisco W. Johnson
  • Jorge Pelayo Maciel
  • Marco Valenzo Jimenez

Abstract

The family business discussed in this paper was founded in 1932 and had sustained growth during the first two decades of operation. It had transformed itself from a local to a national business and started to venture into international markets. The founder of the company had one daughter, an only child, who never worked in the company. When the founder died in 1955, the spouse of the only child took control of the business but never owned stock in the company. At the end of the 80’s the company was run by the third generation. The oldest and only of several siblings to work in the business. The oldest son was responsible for managing the business for more than 40 years. His main concern was always the efficiency of day-to-day operations. He never planned the succession process for the fourth generation. The CEO is ready to retire and at present there are no candidates among the family willing and able to succeed the leader of the company. This case requires two hours out of class preparation by students in small groups and one hour in class discussion among individual groups with teacher assistance. The case is intended for undergrad students in business, marketing or finance

Suggested Citation

  • Francisco W. Johnson & Jorge Pelayo Maciel & Marco Valenzo Jimenez, 2019. "The Importance Of Planning For Succession In The Family Business Before It Is Too Late: A Case Study Of A Small Manufacturing Firm," Review of Business and Finance Studies, The Institute for Business and Finance Research, vol. 10(1), pages 25-32.
    • Handle: RePEc:ibf:rbfstu:v:10:y:2019:i:1:p:25-32
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    File URL: http://www.theibfr2.com/RePEc/ibf/rbfstu/rbfs-v10n1-2019/RBFS-V10N1-2019-3.pdf
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    References listed on IDEAS

    as
    1. Ansari, Iram Fatima & Goergen, Marc & Mira, Svetlana, 2014. "The determinants of the CEO successor choice in family firms," Journal of Corporate Finance, Elsevier, vol. 28(C), pages 6-25.
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    Cited by:

    1. Juliana R. Baltazar & Cristina I. Fernandes & Veland Ramadani & Mathew Hughes, 2023. "Family business succession and innovation: a systematic literature review," Review of Managerial Science, Springer, vol. 17(8), pages 2897-2920, November.

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    More about this item

    Keywords

    Family Business; Succession; Family Protocol;
    All these keywords.

    JEL classification:

    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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