An investigation of management succession planning in black–owned family business in selected areas in South Africa
The objective of this study is to investigate management succession in black–owned family businesses in South Africa. The study was conducted in two Provinces, namely Limpopo and the North–West. In the Limpopo province, the study was conducted in the Vhembe District. The Vhembe district is consists of four municipalities, i.e. Thulamela, Mutale, Musina and Makhado. In the North–West province, the study was conducted in the Bojanala District. The Bojanala district has three municipalities, namely Phokeng, Marikana and Tlhabane. Family businesses are one of the driving forces behind economic growth in the developed and developing countries. Their general lack of longevity is a cause for concern. Their lack of longevity has mostly been attributed to poor succession management processes which hinder the transfer of the family businesses from one generation to the next generation. It is because of this concern that the research was undertaken in order to provide possible suggestions that the family businesses can adopt and implement in order to ensure a successful transfer of the family business to the next generation family members. The research was conducted by means of a literature and empirical study. The purpose of the literature study was to attain in–dept knowledge of family businesses and management succession. The literature study formed the basis of understanding family businesses and the unique challenges facing such businesses. The literature review has focused on issues such as: the definition of a family business, unique characteristics of family businesses, the advantages and disadvantages of family businesses, challenges to the continuity of family businesses, the definition of succession and succession planning, the importance of management succession, the nature of the succession process, the selection of a successor, mentoring and preparing a successor as well as the complete transfer of management to the successor. The empirical study indicated that successful management succession in family businesses is hindered by a lack of or poor management succession planning, estate and retirement planning, the selection of the successor, the prevention and management of conflict as well as the establishment of family forums which enable effective communication within the family business. Therefore, an investigation of management succession in black–owned family businesses was undertaken due to their lack of longevity as presented in findings from the empirical study. Practical recommendations were suggested to support the family and the business to effectively manage the management succession process in the family businesses.