Analysis of factors affecting succession management of family-owned enterprises in Nairobi County
Gitiche, Paul Mwangi
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Succession Management is an important event in the life of a family enterprise. The strategies employed in the succession have been observed to have a significant influence on the survival and performance of family businesses. Against the background of minimal research on family-owned business succession in Kenya, coupled by the important position the family enterprise holds in the economy, this study aimed at determining factors affecting succession management in family-owned enterprises within Nairobi County. The study was guided by the following variables; founder leadership style, mentorship programs and successor attributes. A descriptive research design was used in the study. The population of interest was based on the number of family-owned businesses operating in Nairobi County. A quota sampling method was used to select samples for the study. Based on a confidence level of 95%, a representative sample size of family-owned enterprises operating in the County was determined. Structured questionnaires were used to collect the relevant data for the study. Descriptive survey designs were used in the study. The data analysis was both quantitative and qualitative. This study informed best practices in family enterprise succession to ensure smooth transition in management of family-owned businesses. In the analysis of the founder’s leadership style influence on succession management, over 73% of respondents believed that it does to a great extent. 78% of the respondents indicated that successor to their respective organizations had been proposed and most of them viewed the successor attributes as an important factor influencing succession management in family-owned enterprises in Nairobi County. Family-owned business should enhance professionalism in the running of family businesses. Also, providing training for those in leadership positions including the founders, on the value and necessity of succession management would increase the likelihood of a stronger commitment to succession process.