Successor attributes and entitlement theory in family businesses

• Main Authors: Cenidoza, Zcheyenne C., Chan, Rainalyn R., Hizon, Karen Louise H., Yapuco, Angeline Rose T.
• Format: text
• Language: English
• Published: Animo Repository 2011
• Subjects: Family-owned business enterprises > Succession; Business and Corporate Communications
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/11397
• Institution: De La Salle University

Studies show that succession planning in family business is a key factor to the success and continuation of the family business. Existing literature on the entitlement theory in family business argue that entitlement is one of the perils of family business succession, which leads to the failure of family businesses. However, if coupled with the right characteristics, having a sense of entitlement may benefit the family business. This, then, led the researchers to explore the relationship between these characteristics and the successors sense of entitlement. The study of Chrisman, Chua and Sharma (1998) on the characteristics of a suitable successor served as basis for the variables in the study. To test t his argument, through a non-probability judgment sample, 223 De La Salle University graduate students of the College of Business and School of Economics who have family owned businesses were surveyed using a 5-point Likert Scale to measure their perception of possessing certain characteristics and their sense of entitlement towards the ownership and management of the family business. Through the Pearson Product Moment Correlation and Multiple Correlation Method, the researchers determined the degree and direction of the relationship between sense of entitlement and 25 successor characteristics. It was found that generally male successors had a higher sense of entitlement versus the female successors and more so when he is the first-born or the only child. Commitment to the business is the only successor attribute that has a strong relationship with the successors sense of entitlement, while the successors relationship with family members in general appears to have the weakest relationship, among other attributes. This, together with the other findings of the study, provides a more accurate conclusion on the organizational fit of the potential successor mitigating the issues on erroneous successor choice as early as the pre-succession stage.