Growth and beyond: Effect of internal and external successions to the business performance of family businesses in the Philippines

• Main Authors: Co, Nathan, Daradar, Denver Bingski D., Medina, Charles, Tan, Sean Paul, Wong, Johann
• Format: text
• Published: Animo Repository 2019
• Subjects: Family-owned business enterprises—Succession—Philippines; Business; Entrepreneurial and Small Business Operations
• Online Access: https://animorepository.dlsu.edu.ph/faculty_research/11319
• Institution: De La Salle University

Family businesses in the Philippines comprise a large portion of Philippine business types. LeeChua (2017) estimates that around 80 to 90% of all businesses in the Philippines are considered family-run. Moreover, according to Vries (1993) and Ward (1987) as cited by Morris et al (1996), approximately only 30% of family businesses transition well into the second-generation and only 15% transition into the third-generation as well.This study aims to determine how the factors from Ghee, Ibrahim, & Abdul-Halim (2015) and Chitoor & Das (2007) affect the succession experience, whether bias is present in the succession experience, how is the succession experience different between internal and external successors and whether succession experience affects succession performance. The researchers utilized the case study method and cross-case analyses, which they categorized the cases as compared to the following: Internal & External Success and Internal & External Contrast. Succession issues were found to manifest before, during and after succession experience, as opposed to the study of Ghee et al. (2015). The researchers developed individual frameworks for internal and external succession.The most impactful factors for internal succession were interest, ability to adapt to change and the relationship between the predecessor and the successor. Conversely, the most impactful factors for external succession are motivation, education, capabilities, outside work experience, interest and ability to adapt to change. Moreover, bias has been confirmed to exist in the succession process in the form that predecessors prefer their children or their relatives to succeed them.