Factors Influencing Succession Planning for Continuity of Family-owned Businesses in the Wa Municipality, Ghana

Abstract

The literature generally indicates that succession in family businesses takes the form of transfer from one generation to another, but succession planning appears to be left to chance by many firms. This neglect of succession planning and the emotions generated by the process make owners ill-prepared for succession. The objective of this study was to explore the factors that influence succession planning in family-owned businesses and their importance in ensuring the continuity and prosperity of businesses in the Wa Municipality, Ghana. A random sample of 205 out of 440 family businesses was systematically drawn, and an interview schedule was used to collect data which were analysed using descriptive and inferential statistics. The findings indicate that higher level of education of founders and communication of the succession decision, comprising the transfer date, and post-succession roles to all key stakeholders affect the succession process and the success of the transfer. When the founder's level of education is relatively high, there is the likelihood of succession planning in the business, but trust seems to be limited with respect to female owners. It is therefore recommended that family-owned businesses in the municipality should be encouraged by supervisory or oversight agencies like the registrar general or National Board for Small Scale Industries to improve their educational level, build trust, and set dates for transfer of responsibilities, specify post-succession roles of incumbents and communicate the succession decision to all key stakeholders in order to improve the succession process and ensure the continuity of the businesses.