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Factors affecting succession planning in family-owned fish trading SMEs in Mwanza City, Tanzania

Author

Listed:
  • Evelyne Magambo

    (Department of Accountancy- College of business Education)

  • Aloyce Nyamwesa

    (Department of ICT- College of Business Education)

  • Alberto Mgulunde

    (Department of Accountancy College of Business Education)

  • Chacha Magasi

    (Department of Marketing- College of Business Education)

Abstract

The purpose of this study was to assess factors affecting succession planning in family-owned fish trading SMEs businesses in Mwanza city. The research utilized quantitative methodologies to evaluate the effect of individual, familial, and organizational factors on succession planning within family-owned small and medium-sized enterprises (SMEs) in Mwanza city. Chi-square analyses revealed that leadership, delegation, the ability to disassociate from the business, and successor preferences significantly influence succession planning. Moreover, the interest and abilities of the successor plays a crucial role in the planning process. The study further found that family-level factors, including traditions, compensating family members, formal communication forums, and the desire to maintain family control, also significantly affect succession planning. Regression analyses indicated that individual factors such as leadership, delegation, and the abilities of potential successors positively influenced succession planning. At the family level, practices like compensating family members and establishing formal communication channels significantly contributed to succession planning, while traditional practices like favouring the eldest son as a successor did not have a substantial impact. Additionally, the study identified that the readiness of the successor, the presence of a clear and documented succession plan, effective board governance, a well-defined organizational structure, and the existence of a written strategic plan were key predictors of successful succession planning. The findings suggest that businesses with well-defined and specific succession plans, identified successors, and active development plans for the next generation are more likely to achieve success in shaping succession planning within family-owned fish trading SMEs, providing a solid foundation for successful ownership transitions. This research offers valuable insights for future research and policy development concerning SME succession planning and business sustainability. Key Words:Succession planning, family-owned SMEs, fish trading, business longevity, Mwanza

Suggested Citation

  • Evelyne Magambo & Aloyce Nyamwesa & Alberto Mgulunde & Chacha Magasi, 2024. "Factors affecting succession planning in family-owned fish trading SMEs in Mwanza City, Tanzania," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 13(2), pages 84-97, March.
    • Handle: RePEc:rbs:ijbrss:v:13:y:2024:i:2:p:84-97
    DOI: 10.20525/ijrbs.v13i2.3094
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    References listed on IDEAS

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    1. Nyoni, Thabani, 2019. "Factors affecting succession planning in Small and Medium Enterprises (SMEs) in Zimbabwe: a case study of Harare," MPRA Paper 91352, University Library of Munich, Germany.
    2. 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.
    3. Martijn Boermans & Daan Willebrands, 2012. "Financial constraints, risk taking and firm performance: Recent evidence from microfinance clients in Tanzania," DNB Working Papers 358, Netherlands Central Bank, Research Department.
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