Management dilemmas of family businesses during the succession process: A case study on selected construction supply stores in the Philippines

• Main Authors: Barrozo, Celine Marie B., Lao, Lawrence Roy B., Lee, Alice Y., Soledad, Joanne M., Tiu, Diorella Mae N.
• Format: text
• Language: English
• Published: Animo Repository 2010
• Subjects: Family owned business enterprises > Philippines > Management; Family owned business enterprises > Succession > Philippines; Building materials industry > Philippines
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/14504
• Institution: De La Salle University

Most successful firms in the Philippines were started by young entrepreneurs with the support of their family. These enterprises usually evolve into family business and it is the people in the business that decides on the type of ownership but most of the time it is retained to be family operated. On the contrary, it is not always the case that a firm operated by a family remains successful. In understanding this circumstance, one ought to understand the succession process, the process which all family firms undergo. In this study, the researchers aim to answer the question: What are the management dilemmas experienced by family businesses in the Philippines during the succession process? The objective is to discuss the current succession process undertaken by family businesses selected for the study determine the problems they encountered during the succession process and present how they successfully survived these challenges. Thus, to be able to answer the research problem, the researchers employed a multi-case-study method for a descriptive research design. Originally, the researchers aim to prove eighteen propositions but due to the result of the pilot study, the researchers focused on eight propositions. After which, the researchers looked for construction supply--hardware stores located within the Luzon area, all of which must have undergone at least a second generation succession, as its sample for the interview proper. To be able to test the viability of each proposition, the researchers conducted an interview with the successors of the following companies: KIMSO General Merchandise, JNCS Hardware, WISCON Enterprise, and Triple T Hardware. After the interview and further analysis, the researchers found out that most propositions for the four companies were not applicable, some propositions were applicable but are not seen as a problem for the company, and the four companies have differing results in some propositions. This was mainly because of the factors found in the four companies, which the researchers found pertinent in affecting the result of each proposition: size of the enterprise, family closeness, age of the business, and the succession generation. This study aims to give light on management dilemmas experienced by family businesses during the succession process. Thus, the researchers recommend the following for application and further studies: first, for businessmen who are starting their own businesses, the incumbent leaders should already have a plan in mind and be prepared for determining the successor for business sustainability. Second, for the four companies of the study, the incumbent leader should build and maintain the interest of the potential successor to secure the future of the business. Third, for family businesses of the same industry, construction--hardware, they can replicate the process undergone by the four companies, if and only if, the circumstances for which they exist likely with that of the four companies. Lastly, for the academe who aims to replicate a similar study, the researchers recommends for the inclusion of the following factors: family closeness, size of the business, age of the business, succession generation, and ownership difference. By then, the researchers can confirm and create a pattern for the recurrence of management dilemmas during the succession process with the interplay of the aforementioned factors and going further the limitations that this study presented.