Family Business Succession of SMEs and Post-Transition Business Performance

Abstract

This study aimed at identifying the relationship between the success factors of succession in terms of preparation of heirs, the relationship between family and business as well as planning and control activities to smooth transition process. In addition, the smoothness of the transition process was also studied to determine its relationship with post-transition performance. This study included 70 of the successors of family business around Kuala Terengganu which are selected as study samples. Data was analyzed using SPSS 18.0. Contingency coefficient test, Pearson r correlation and Spearman rho is used to measure the relationship between the variables of the study. The results showed the entry-level position and the relationship between family and business have significant influence on the smoothness of the transition process. While the planning and control has no significant relationship with the smoothness of the transition process. The study also shows the smooth process of transition has no significant influence on post-transition performance. The study is expected to help SMEs family business implement an effective succession process to develop future heirs and sustain the business in the market for a long time.

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