Global Journal of Management and Business Research, A: Administration and Management, Volume 22 Issue 5

Succession Planning and Family Business Continuity: Perspectives from Lagos State, Nigeria Olubiyi, T. O. α Lawal, A.T. σ & Adeoye, O. O. ρ Abstract- Environment scrutiny has shown that family businesses are the common form of business in Nigeria and their going concern has generated academic debate and public discourse worldwide. Yet, the features orchestrating continuity in these family businesses are different and geographically diverse. One of the major issues to which this can be attributed to is the uncommonness of adequate succession planning practices. The objective of this paper is to examine the effect of succession planning on family business continuity in Lagos State, Nigeria. A survey research design was adopted for this paper with 503 selected SMEs operating in Lagos State as the target population. Taro Yamane sample size method was adopted and data was collected through the use of structured questionnaire adapted and validated for the study. The Cronbach’s alpha coefficient for the questionnaire items ranges between 0.850 and 0.775. The questionnaire response rate was 93.20%. The gathered data were analyzed using descriptive and inferential (Pearson product moment correlation and regression analysis) statistics. The analysis of the data revealed that succession planning had a significant effect on family business continuity (R=0.738, R2 =0.545, Adj. R2 = 0.538, F (78.821) =1.95); p<0.05). This paper concludedthat, succession planning is pertinent to the enhancement of continuity in family businesses in Lagos State. The paper therefore, recommend that for family businesses to continue to perform and achieve continuity, succession planning must be put into strategic plan of the organization so that employees have adequate leadership competence and mentoring culture. Keywords: business continuity, family business, mentoring, performance, resources, succession planning. I. I ntroduction amily-owned businesses are the majority of all businesses in the world according to Aderonke, (2014). The academic research and policy- makers’ interests in Small and Medium-sized Enterprises (SMEs) have grown due to their role in the economy development of many countries. An Irish Author α : Ph.D., School of Management Sciences, Department of Business Administration and Marketing, Babcock University, Ilishan- Remo, Ogun State, Nigeria. e-mail: drtimiolubiyi@gmail.com Author σ : Ph.D., Faculty of Management Sciences and Social Sciences, Department of Business Administration, Al-Hikmah University Ilorin, Kwara State, Nigeria. e-mail: atlawal@alhikmah.edu.ng Author ρ : Faculty of Management Sciences, Department of Accounting, Adeleke University, Ede, OsunState, Nigeria. e-mail: muyiwa.adeoye@adelekeuniversity.edu.ng report asserted that 75% of SMEs are family-owned businesses, while over 60% of all businesses in most nations are classified as family businesses Osunde, (2017). Largely literature support that SMEs are seen as an important alternative sector in fostering socio- economic developments and reduction of poverty in both developed and developing. Therefore, Small businesses are expected to contribute in three areas: creating jobs, promoting economic growth, and reducing poverty level in poor countries, Arteaga and Menéndez-Requejo,(2017). Family business research has been gaining impetus in recent years (De-Massis, Sharma, Chua, & Chrisman, 2012; Kellermanns & Eddleston, 2010; Rondi, Emanuela, De Massis, and Josip (2019), Sharma, Chrisman, & Chua, (1997) since they possess great potentials for employment generation, improvement of local technology and development of indigenous entrepreneurship within large scale industries. Central Bank of Nigeria (CBN, 2011) articulated that SMEs or family businesses have the capacity to reduce poverty, inequality disparity and social vices and are catalysts of innovations, inventions and creativity; stimulate indigenous entrepreneurship. Although family businesses have the capacity to sustain the economy, yet their survival and continuity has been of great interest to researchers. One of the key research areas in the family business that has been discussed and still to be investigated further is intergenerational transferability which Zellweger, Nason, and Nordqvist (2012) alluded to and can be addressed through knowledge management and succession planning as a cushion for family business continuity. Despite known tremendous contributions, family-owned enterprises are facing the challenge of continuity, as 95% of family-owned businesses do not survive the third generation of ownership (Akani, 2015). Related studies have also shown that less than one-third of family businesses continue to the second generation and less than half of second-generation family enterprises make it to the third generation when the founder/manager retires or dies (Chacha, 2016). This problem is because of lack of succession planning because, without effective succession planning there cannot be generational enterprises Olulana, (2015). Succession planning is perceived as a systemic, long-term process of F 31 Global Journal of Management and Business Research Volume XXII Issue V Version I Year 2022 ( ) A © 2022 Global Journals