Leadership Succession Problem: an Examination of Small Family Businesses

Abstract

The greatest challenge facing the Small Family Businesses (SFBs) is the problem of succession (continuity) in today’s dynamic world. This phenomenon is caused by lack of proper planning by the business founders for the succession when they retire or die. The aim of this study is to examine the problem of succession among small family businesses in Nigeria. Drawing from eight small family businesses in Gombe metropolis, Gombe State of Nigeria, we examine why these businesses failed after the death of their founders. Primary data was used from former employees of the businesses under investigation and the children and relatives of the founders which, was qualitatively discussed. We also discussed some of the factors that prevent smooth succession or continuity of small businesses in Nigeria. The findings show that lack of proper planning by the founders for succession is the backbone of this problem. However, this happens due to fear of losing control of the business to subordinate or any of the family members by the founders. In addition, there is inheritance problem among the members of the founder’s family which tie down the business. The study suggests that SFB founders should have a long term succession management strategy by training a member of the family or hiring an expert to manage the business, alternatively, they should sale some shares of the business to the public or a partner.