Must eagle breed doves? : the joint effect of the characteristics of successors and predecessors on gerenational shadow

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Must eagle breed doves? : the joint effect of the characteristics of successors and predecessors on gerenational shadow

 

Author: Chen, Litsung Louis
Title: Must eagle breed doves? : the joint effect of the characteristics of successors and predecessors on gerenational shadow
Degree: D.B.A.
Year: 2014
Subject: Family-owned business enterprises -- Succession.
Inheritance and succession.
Hong Kong Polytechnic University -- Dissertations
Department: Faculty of Business
Pages: 127 pages : illustrations ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b2825653
URI: http://theses.lib.polyu.edu.hk/handle/200/7980
Abstract: Unlike other type of firms, previous research suggests that, in family-owned firms, predecessors often choose their successors based on criteria other than the ability and motivation of the successors (e.g., De Massis, Chua, & Chrisman, 2008; Klein & Kellermanns, 2008). This observation is surprising as one would expect that a business owner would choose the most capable and motivated candidate to take over the business. In other words, "eagles do not breed doves'. More surprisingly, although the literature has amassed a large number of descriptive and case-based studies on the reasons for the failures and successes of success, the field lacks a predictive and theory-based framework to address the phenomenon (De Massis, Chua, & Chrisma, 2008).To fill this void, we draw from the double bind theory (Bateson 1972) to develop a novel theoretical framework that depicts how the characteristics of successors and predecessors jointly predict the predecessors' reluctance to pass the power to the next generation during the succession processes. We capture this reluctance to give up power using the construct of generation shadow. Following Davis and Harveston (1999), we define "generational shadow" as continued influence of the predecessor on the actions of successor as well as the decision making processes in the company.Specifically, we propose that there is a non-linear (U-shaped) relationship between the child-successor's willingness to take over the family business and the generational shadow from the parent-predecessor. Further, we hypothesize the same non-linear relationship between the successor's capability and the predecessor's generational shadow. We also expect that the predecessor's narcissism trait will moderate the above two non-linear curve relationship, in the way that a higher level of predecessors' narcissism, the non-linear effect of willingness and capability on generational shadow would be stronger. Lastly, during the succession process, the appointment of a third party to take up the major position in the firm (the presence of a "seat-warmer", would mitigate the non-linear effect of willingness and capability on generational shadowing. Multiple-regression was conducted to test the hypotheses in this research. The data from 157 predecessor-successor dyads revealed that there is a U-shaped curvilinear main effect between the successor’s willingness to take over the business and the generational shadow he or she perceives. We also found the same U-shaped curvilinear main effect between the successor's capability and the generational shadow cast on the successor. We found that a narcissistic personality on the part of the predecessor moderates both of the above-mentioned curvilinear main effects. However, the results suggest that the moderation effect of narcissistic trait weakened the curve-linear relationship rather than strengthen it, which is opposite to our prediction. Furthermore, we found that the presence of a seat-warmer does in fact ease the intergenerational tension, but in a manner opposite to our prediction. In the absence of seat-warmer, the predecessors tend to show a higher level of generational shadowing, irrespective of the levels of successors' willingness. The curvilinear relationship between the successor's willingness to take over the family firm and the generational shadow was stronger in the presence of a seat-warmer. Also, the statistical findings do not support the hypothesis that the presence of a seat-warmer will moderatse the main effect between the successor’s capability and generational shadows.

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