Succession planning process in Maltese family businesses : an analysis

Abstract

Purpose: The research seeks to identify the factors that limit family businesses from making it through generations. The researcher aims to assess the issues and complexities that family businesses face at succession stage. The study seeks to analyse factors that increase the likelihood that a family business survives through generations. Design: The study is based on seventeen interviews. Eleven interviews were carried out with individuals from the professional field who work closely to family businesses. To support and complement the view of professionals, six interviews were carried out with family businesses. Findings: Results show that early succession planning is of utmost importance. Families need time and professional mentoring to find a solution to the issues that crop up at succession stage. Family members need to make difficult decisions. It is necessary that family businesses develop with time. At succession stage, family businesses face fiscal and financial burdens and problems brought by different generations, amongst other issues. The involvement of non-­‐family executives is significant for the success of the business. A family business is not to be driven as a family but as a business with a strong governance structure. Conclusion: Family businesses are constantly referred to as the backbone of the Maltese economy. Decision makers need to focus on achieving what is best for the business. Family issues should not be detrimental to the survival of the business. A family business needs to be managed professionally. One does not afford to take any short cuts. Discussions with future generations are immensely important. There is no one solution that suits all family businesses since every business faces unique circumstances. Such distinctive characteristics continue to make the world of family businesses increasingly interesting. Value The study is expected to provide insight into the world of family businesses and the issues faced when transferring the business to the next generation. It is expected that the research raises awareness on the importance of planning early for succession and gives a clear picture of what the succession planning process involves.