The impact of selected stakeholders on family business continuity and family harmony

Abstract

The growth, survival and success of a family business are often influenced by issues relating to family relationships and family harmony. Not only do the actions of family members influence the success or failure of the family business, but so does thebehaviour of non-family stakeholders. The success or failure of the family business may also have important emotional and financial ramifications for the different stakeholders involved in the business, whether that involvement is physical or emotional. Yet, very little is known about the impact that the various stakeholder groups have on the success of the family business, its continuity or the family harmony that prevails. Consequently, the primary objective of this study is to evaluate the impact of selected stakeholders, namely non-family members, inactive family members, the senior generation and the incumbent generation on the success of family businesses. Success, for the purposes of this study, was measured using two variables, family harmony and perceived future continuity. 9 Respondents were identified by means of convenience sampling, and a total of 468 usable questionnaires were returned. The data collected were subjected to various statistical analyses. The validity of the measuring instrument was assessed by means of an exploratory factor analysis and reliability by calculating Cronbach’s alpha coefficients. The relationships proposed in the hypothesised model were assessed by means of structural equation modelling (SEM). The empirical results of this study reveal that family harmony influences the perceived future continuity of family businesses. In turn, inactive family members and the incumbent generation have a significant impact on the family harmony that exists in the family business