Family Business Succession: What Are the Ways Used by the Men Business Managers to Legitimize Their Successors?

ABSTRACTThis paper aims at helping entrepreneurs to make their family business succession successful. Among the success factors of the succession, the successor's legitimacy seems determinant. This exploratory study involving five cases of succession by men predecessors shows that the outgoing leader can increase the legitimacy of his successor by helping him to develop his skills, by giving him responsibilities and authority, and by helping him to show his ability to be successor and to be respected.INTRODUCTIONFor Aronoff and Ward (1994) as well as Bruce and Picard (2005), the family businesses represent a model for the future, not only because the values they convey and their commitment in their respective communities on the redundancy and cultural plan (Astrachan & Shanker, 2003; Deloitte & Touche, 1999), but also because they establish a driving strength of the economic growth. Indeed, only in Canada, they represent about 75% of all the companies, with approximately 45% of the Gross National Product (GNP), and they provide work for 50% of the workforce (Cadieux & Brouard, 2009; Family Firm Institute, 2003; Le Breton-Miller et al., 2004; Richer et al., 2004; Sharma, 2004).However, most of these companies face a problem of transmission. According to the results of the study conducted by Bruce and Picard (2005), 41% of the business managers are going to transfer their company before the next five years and this proportion will reach 71% in the upcoming 10 years. But only 35% of the business managers have a plan to sell or transfer their family business. Bruce and Picard (2005) also argue that 10 years are needed approximately to prepare the succession in good conditions. In addition, according to the Oeuvre Suisse d'Entraide Ouvriere (OSEO) (2005), only 20% of the family companies succeed in the passage of the first to the second generation in the six years following the transfer by the manager.The success of the transmission is depending on a variety of factors. It is associated, not only to the predecessor's decision to leave (Lansberg & Astrachan, 1994) or to let go (Bah, 2008; Brun de Pontet et al, 2007), but also to the succession planning (Sharma, 2004; St-Cyr & Richer, 2005), and to the successor's ability to take the lead (Venter et al., 2005). Other authors emphasize the predecessor's skill to establish good relations with his successor (Cabrera-Suarez, 2005; De Massis et al., 2008; Garcia-Alvarez et al., 2002).Other studies have been performed on the successor's skills to assume his leader's role (Mitchell et al., 2009; Venter et al, 2005), but also on his experience (Le Breton-Miller et al., 2004), commitment, satisfaction, and motivation (De Massis et al., 2008). For other authors, some dynamics should not be neglected, for example, the transmission of good values to the successor (Garcia-Alvarez et al., 2002), the successor's development (Cabrera-Suarez, 2005), the importance for the successor of feeling integrated throughout the process (Haberman et al, 2007; Koffi, 2008), and the predecessor's disengagement (Bah, 2008; Cadieux, 2007). Finally, a particular and growing importance is accorded to the acquisition of legitimacy which, according to numerous authors, is a success factor of the business transmission (Barach et al., 1988; Culliere, 2010; Koffi, 2008; Sathe, 1985).The need to support the predecessors in a successful succession brings all its relevance to the main objective of this research. This objective is to grasp the predecessor's behavior to legitimize his successor. Several studies indicate that the men business managers adopt a different leadership from those of the women in a similar position (Bass, 1990; Eagly et al., 2003; Koffi, 2008). The diversity needed to face the complexity in the transmission of companies justifies the interest to analyze the succession behaviors according to the predecessor's gender. In this study, the specific objective is then to understand and to describe how the men family business managers near to retire bring their successors to gain their legitimacy in the company, while this legitimacy seems to be very important for the timelessness of the company (Barach et al. …

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