Title: Determinants of Success in the Leadership Succession Process in Family Companies in East Java, Perspective of Successors and Founders
Author: Tulasi Daniel
Item Type : Thesis (Thesis)
Affiliations: Master of Management Science Study Program, Faculty of Economics and Business, Universitas Airlangga , Surabaya, Indonesia
Publisher: Universitas Airlangga
Abstract
The number of family companies in various countries in the world is between 65% and 90%. However, from various research and facts it is known that the continuity of family companies from one generation to the next tends to decrease, especially the transition of companies from the first generation to the second generation only remains around 30%, from the second generation to the third generation around 12% to 15%. and only about 3% survive to the fourth generation. There are various factors that influence this failure, but in general the main determinants are issues of value conflict, succession, management structure, alignment of family desires with business requirements, competence, compensation and income distribution. Apart from that, crucial problems that often occur are communication between family members, leadership succession and the sustainability of family companies, as well as uneven succession between generations. Various research results show that leadership succession is a very crucial factor for the survival of family companies. Issues related to leadership succession include succession planning, succession process, organizational climate, characteristics of successors, characteristics of founders, and relationships between family members. This research aims to discuss the leadership succession process by focusing on factors related to successor characteristics that determine the success of the leadership succession process in family companies in East Java from the perspective of successors and founders of family companies. Sample selection was carried out using purposive sampling and a total of 158 successors and founders were selected as respondents. Data collection was carried out using a survey method, using instruments, questionnaires. Data analysis was carried out by applying partial least squares-structural equation modeling and the t-test. The research results show that the variables of successor preparation and the relationship between the successor and the founder have a positive and significant effect on satisfaction with the leadership succession process. The variable of the successor's willingness to take over the company has a significant but negative effect on satisfaction with the leadership succession process, while sibling relationships have no significant and negative effect on satisfaction with the leadership succession process. The variable satisfaction with the leadership succession process has a significant but negative effect on the effectiveness of the leadership succession process. Apart from that, the test results are different, the t-test also shows that there is a significant difference in the average value of perceptions between successors and founders regarding the level of satisfaction of successors and the effectiveness of the leadership succession process. Overall, the average value of the successor's perception is lower than the average value of the founder's perception of the successor's satisfaction with the leadership succession process. On the other hand, the average value of the successor's perception is higher than the average value of the founder's perception of the effectiveness of the family company leadership succession process. What factors cause these differences, further research and discussion is needed.
Keywords: Willingness of successor to take over the company, preparation of successor, relationship between successor and founder, sibling relationship
Sources: http://repository.unair.ac.id/94297/
