Influence of succession planning on the survival of family owned Small and Medium Enterprises in Nairobi City County Kenya
Date
2021
Authors
Njambi, Anne
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
The small and medium enterprises sector is one of the key drivers of economic growth and employment creation in Kenya. However, most firms within the sector; are faced by a myriad of challenges in their growth. One of the main challenges has been succession planning which plagues the family-owned small and medium enterprises resulting in low ch8nces of survival upon the demise or incapacitation of the founding owner. This study sought to examine the inf1uence of succession planning on the small of family-owned small and medium enterprises in Nairobi City County. Kenya. The study specifically sought to establish the effect of leadership development. Communication stakeholder involvement and stall career development on the succession and survival or family-owned small and medium enterprises. The study was guided by the hum8n capital theory. The leadership model of succession and the game theory of succession planning. The study employed a positivist philosophy. The population for the study was 490 family-owned businesses operating within the borders of Nairobi City County that have undergone 2nd", 3rd 4th generation succession. A sample of 220 enterprises was selected. This study utilized primary data that was sourced using a structured questionnaire. The collected data was analysed using descriptive correlation and regression analysis. Findings showed that I 04 of the sampled firms had a succession plan in place. The results also indicated that 125 of the firms were either in the 2nd or 3'd generation. The correlation results established that together, leadership development, communication, stakeholder involvement and staff career development had a moderate positive relationship with the survival of family-owned businesses. The regression results revealed that almost half of the variations in survival of family-owned businesses were determined by these four variables of succession planning. The research concluded that on its own leadership development had an insignificant effect on the survival of family-owned businesses. The study further concluded that communication stakeholder involvement and staff career development had a positive relationship with survival of family-owned businesses. The research recommends that on staff career development family-owned businesses should improve the capacity building among their staff and enhance the recognition schemes for their employees. Further the businesses should formulate better networking strategies and stakeholder involvement in the succession planning of the firm. Regarding communication. The study recommends that business owners initiate and communicate succession plans as a matter of formality rather than a last-ditch effort. Lastly, although leadership development appeared to haw· an in significant relationship to succession planning, it is still important for leadership teams to calculate their coaching and mentorship programs since this scam have significate impact of a company's future. The study recommends for further study on the viability and suitability of leadership development practices adopted within family owned businesses .
Description
A dissertation submitted in partial fulfilment of the requirement for the award of the degree of Master of Business Administration (MBA) of Strathmore University