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ABSTRACT
This study tests various hypotheses concerning the relationship between correlates of effective succession planning and longevity, using a sample of Lebanese family firms. The findings lend support to the hypotheses regarding how proper succession planning and healthy family relationships positively affect the longevity of the firm and thus the success of the firm. However, the model used does not lend support to the hypothesis that openness and liberal attitudes to accepting qualified successors, whether from within or from outside the firm, is positively correlated with longevity. In fact, the findings suggest a negative relationship between liberal attitudes and longevity, suggesting that older businesses have more conservative attitudes than younger businesses towards family members and outsiders in the family firm.
(ProQuest-CSA LLC: ... denotes formulae omitted.)
INTRODUCTION
Worldwide statistics on success and transitions during succession in family businesses are alarming. The percentage of family firms that pass to the second generation is 30%. This percentage drops by 50% from the second generation to the third, and only 3% of family firms go beyond the third generation (Kets de Vries, 1993; Ward, 1987). Firms that make the transition to the next generation are relatively small in number. Success is directly linked to the continuity of the firm, and effective succession planning is considered a determinant of longevity (Lank, 2001). Considerable research is devoted to identifying a series of organizational, demographic and psychological factors that are likely to influence the level of planning for continuity in the family business (Handler & Kram, 1988). The objective of this paper is to determine whether proper planning, positive family relationships, and openness to including women and outsiders in the leadership position in family firms have significant influence on the longevity of firms. Longevity is used in the study as a proxy for success. The paper begins with a brief literature review leading to the hypotheses that the paper will test. The following sections present the sampling procedure and methodology used to collect and analyze the data, analysis and results of the study, and, finally, the conclusion.
LITERATURE REVIEW AND HYPOTHESES
A number of researchers show that the most significant factor that determines the continuity of family businesses from one generation to the next is a proper succession planning...