Employees' Contribution to the Succession Process of Family Small and Medium Sized Businesses: Conceptual Model and Research Agenda

INTRODUCTIONConsidering the growing number of aging owner mangers of SMBs in Canada, there will be a massive transfer of ownership of businesses in the world in the next years (Bruce Wong, 2012) In Canada, more than 50% of family businesses will change hands (Le Breton Miller St Cyr, 2011) Considering that employment in Canada is primarily created by small and medium sized businesses (SMBs) because more than 50% of the workforce in that country are employed by this type of enterprises (Bruce Wong, 2012) and that 70% of the SMBs could not survive to a second generation of owners1, it is fundamental to examine the succession process of these organizations because the Canadian economy could be badly shaken in these circumstances.Certain factors required to successfully complete a family succession have been proposed in the literature, among which we find the leadership of the successor (Stavrou, Kleanthous Anastasiou, 2005) In fact, on one hand, the succession depends on the transfer of property, but also upon the more complex change in management (Hugron, 1992) Because of their behaviour and their influence on an organizational culture favourable to change along with the transitional phases associated with a succession, senior managers obviously have an important role to play in the success of the transfer (Stavrou et al. 2005; Venter, Boshoff Maas, 2005) In addition, since the leadership, notably the transformational type, seems to embody an important nexus for the satisfaction and the involvement of company staff (Emery Barker, 2007) it thus becomes pertinent to ask how to properly manage the employees in the transitional process in order to identify what may facilitate the transfer of management from the predecessor to the successor. In this way, it is possible to assume that this type of approach may highlight the eventual contribution of employees towards a successful succession, a perspective that seems apparently absent in contemporary literature on this particular subject. In fact, HRM in SMBs is more often than not assumed by the owner manager. When we know that 98% of Canadian companies employ less than 100 employees (Industry Canada, 2008) and that a formal HR function only takes form when the employees exceed 100 plus in the company, (St Onge, Guerrero, Haines Audet, 2009) we must therefore question the methods used to manage the employees in SMBs in order for the owner manager to have certain tools that favour an affective commitment by employees and thus the success of the process of succession.From a theoretical viewpoint, this paper assumes that all forms of organizations represent a structured entity where not only managers but also employees contribute to its success (Bernoux, 2009) It aims to widen the perspective of the resource based view (RBV) by emphasizing the anticipated positive effects of various HRM practices on the extent of organizational involvement by employees in order to identify what favors, in a work environment, the success of SMBs succession processes. By presenting a research model susceptible to provide a better understanding of the potential role of employees in this type of process, this paper may help managers of SMBs to use better tools in order to positively affect their process of succession.In such circumstances, the following sections will deal, firstly, with the family enterprise and the succession process. Afterwards, a review of the fundamental principles relative to RBV will be undertaken in order to show that the success of an organization is based not only on the HRM practices directed at its employees, but especially on the synergy between them and the desire of employees to be fully involved. Next, the principal concepts of the article are examined in order to identify the potential relationships that will define the degree of involvement of these practices leading to a successful transfer through the bias of employee commitment.