Planning Strategies for Generational Succession in Flemish Third-Generation Family-Owned Businesses

Planning Strategies for Generational Succession in Flemish Third-Generation FamilyOwned Businesses by Anne-Marie De Scheemaecker MBA, University of Wales, 2012 BSC, University College Ghent, 1986 Doctoral Study Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Business Administration Walden University June 2017 Abstract Survival over generations is critical for family-owned businesses (FOBs). Only 3% of family firms survive the 3 generation, and a succession strategy is the most challenging decision for family business leaders to make. The purpose of this multiple case study was to explore nonfinancial succession planning strategies that 3generation FOB leaders in Flanders, Belgium, apply for the transition of ownership and leadership to the 4 generation. The conceptual framework for this study was the socioemotional wealth paradigm. Data were collected using semistructured interviews, archival document reviews, company internal and public documents, and press releases. Yin’s 5-step data analysis was applied to identify themes and patterns. Analysis of the data revealed that, among these 3-generation FOBs, the socioemotional aspect of generational succession planning required strategies thatSurvival over generations is critical for family-owned businesses (FOBs). Only 3% of family firms survive the 3 generation, and a succession strategy is the most challenging decision for family business leaders to make. The purpose of this multiple case study was to explore nonfinancial succession planning strategies that 3generation FOB leaders in Flanders, Belgium, apply for the transition of ownership and leadership to the 4 generation. The conceptual framework for this study was the socioemotional wealth paradigm. Data were collected using semistructured interviews, archival document reviews, company internal and public documents, and press releases. Yin’s 5-step data analysis was applied to identify themes and patterns. Analysis of the data revealed that, among these 3-generation FOBs, the socioemotional aspect of generational succession planning required strategies that simultaneously focused on successor suitability and well-being, consensus of the family, mode of transition, leadership and governance, and survival of the family firm. These findings may provide other, similar FOB leaders with insights into the dynamics of a successful transition of the 3-generation family firm to the next generation. Findings may be used to increase FOB survival rates, provide new job opportunities, contribute to community growth, and enhance the well-being of stakeholders. Successful family firms may engage in philanthropic activities as a way of transmitting legacies between generations. Planning Strategies for Generational Succession in Flemish Third-Generation FamilyOwned Businesses by Anne-Marie De Scheemaecker MBA, University of Wales, 2012 BSC, University College Ghent, 1986 Doctoral Study Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Business Administration Walden University June 2017 Dedication I dedicate this doctoral study to my goddaughter, Ella Bruwier, for whom I hope to be a role model on the merit of commitment to excellence in profession and academia. I also dedicate this study to every FOB leader who aspires to turn the generational transition into a success. Generational succession is a once-in-a-lifetime chapter comprising often difficult choices and decisions. Perhaps no other challenge in the course of running the family business has as much ability to fulfill an aspiration or to aggravate a concern. My desire is that the results of this study may help FOB leaders to navigate the road to a successful transition and increase the probability that their business will persist through the future generations, conveying lasting value to their family, their employees, and society at large. Acknowledgments First, I would like to extend my gratitude and appreciation to Dr. Ronald Black, my committee chair and mentor, for his incessant commitment to my doctoral study progress and for helping me cross the finish line in four. Dr. Ron deeply cares for his students and his ability to stimulate, motivate, and inspire was a solid anchor throughout this challenging journey. It was my pleasure and honor to work with Dr. Ron. In addition, I would like to thank my second committee member, Dr. Dina Samora, and my University Research Reviewer, Dr. Rocky Dwyer, for their valuable reviews, suggestions, and guidance that helped me improve the quality of my doctoral study. To my friends and peers, Dr. Roxie Mooney and Dr. Masoud Malakoti-Negad, thank you for showing me the way and helping me to stay focused. Special thanks to Jacques Claes for his support and understanding and for allowing me the time and space to complete this demanding project. To Wouter Torfs, thank you for testifying how family values, vision, mission, and focusing on positive social change can make the family business durable and profitable; how it really can be different; how this respectable family ethos was and will be passed on across generations. Finally, to my dear friends and neighbors, thank you for understanding when I could not join you as much as I would have liked during the past few years. Thanks for believing in me all the way and supporting me in attaining this lofty goal.