Open AccessA Family Affair: A Quantitative Analysis of Third-Generation Successors’ Intentions to Continue the Family Business
Author(s) -
Francine Chan,
Dominique Jalandoni,
Cecil Austin Sayarot,
M. C. Uy,
Denver Daradar,
Patrick Adriel P. Aure
Publication year - 2020
Publication title -
organizations and markets in emerging economies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.195
H-Index - 4
eISSN - 2345-0037
pISSN - 2029-4581
DOI - 10.15388/omee.2020.11.43
Subject(s) - third generation , family business , normative , psychology , social psychology , control (management) , generation y , wright , first generation , mediation , generation gap , marketing , sociology , management , business , political science , computer science , economics , telecommunications , population , social science , demography , law , programming language
Family businesses face a succession crisis where only 13% survive until the third generation (Lee-Chua, 2014). While there is sufficient literature on family business succession planning , research on the motivations behind next-generation engagement in family firms, especially for third-generation successors, is limited (Garcia, Sharma, De Massis, Wright & Scholes, 2018). Thus, the present study tested Garcia et al. (2018)’s model where perceived parental support and psychological control predict next-generation engagement, with family business self-efficacy and commitment to family business mediating this relationship. 118 third-generation successors were surveyed using established and newly developed scales based on previous literature. Mediation analysis showed that normative commitment partially mediated verbal encouragement and next-generation engagement, while affective commitment fully mediated parental psychological control and next-generation engagement. Results were also compared against 124 second-generation successors, revealing that there were no significant differences between generations. Combining these two datasets led to a new conceptual framework, where normative commitment partially mediated verbal encouragement and next-generation intention, while affective commitment partially mediated parental psychological control and next-generation intention. The results of the study can contribute to the enrichment of family business literature, particularly on the factors that influence the intentions of third-generation successors, and to the creation of effective succession plans.