AD ALTA
JOURNAL OF INTERDISCIPLINARY RESEARCH
The strategic influence of family members on the business
management, whether they are active in management or
not, by continuing the formation of culture and by serving
as advisors or board members, or by being an active
shareholders.
Interest in family relationships.
Wish (or opportunity) for continuity across generations.
(Poza, 2010)
The definition mentions corporate culture to which is currently
paid much more attention than before. Astrachan and Shanke
(2006) report that the definition of family business by experts is
based on different criteria. These are their percentage share of
the family property, the involvement of multiple generations in
the strategic decisions about the company, the intention to
transfer the company to future generations.
Family businesses differ from non-family ones in many ways,
but the biggest difference is that the family business is built on
the personality of the founding father/mother, on family values
and its know-how, on the intensity of the involvement of owners
in business processes, on the commitment thanks to which the
family members give much better performance as employees -
work is said to be "on their own" because they generally invest
their own money to start the business. The basis of the family is
the emotional and affective perspective, solidarity and
communication inwards. The company stands on specific results,
rational facts, evidence-based information, it is open to its
business partners and customers. The communication is oriented
rather outward. The task of the family is the mutual
encouragement, support, tolerance and education. On the
contrary, ferocity, rivalry, achieving profits are more valued in
the company. There is more emphasis on developing
professional skills than on upbringing. These at first glance
disparate variables must be in complete harmony to ensure the
functioning of the family business. (Hnátek, 2012)
2.1 The importance of knowledge management in the
management of the succession strategy in family businesses
The strategic management of the company, to which the
knowledge management can be also included, is a dynamic
process of the creation and the implementation of development
plans. It includes activities aimed at the maintaining of long-term
harmony between mission, long-term objectives and available
resources. (Jakubíková, 2013) As the available resources can be
considered, in addition to financial resources, physical assets and
know-how, also human resources - in the case of family
businesses founding father/mother and the potential successor of
the family ranks. Becker emphasized that the unit of company
employees with their exceptional knowledge, skills and abilities,
motivations and emotions represents a unique, exceptional and
inimitable resource of development that differentiates one
company from another. (Boučková, Viduna, 2014) Why, for
example, do some family businesses, some entrepreneurs find
suitable opportunities and others do not? One reason is that these
opportunities are associated with the so-called tacit knowledge
that is further developed by experience, study, and is given in
different contexts. This will enable to identify market
opportunities, to introduce their products or services to market
faster, at lower cost, and with marketing support based on the
family name and tradition.
The dynamics within the family and the various stages of the life
cycle of the family affects not only business results, but also
business growth and changes and transitions throughout the life
cycle of the family firm. Owners of family businesses are at a
disadvantage because they do not have the opportunity to consult
their decisions with anyone and the majority of them do not have
enough managerial knowledge and skills. Training and education
are more often considered the waste of time and financial burden
rather than the investment in the future development of their
businesses. In family businesses, we can very often encounter
the dependency of all strategic decisions relating to
competitiveness, information technology, human resources,
marketing and finance only on one person. Therefore the
strategic decisions, like the succession management strategy, are
implemented rather intuitively than analytically and they often
depend on the complex family and property ties. (Antlová, 2009)
Knowledge resources can be found both inside and outside the
family business. Knowledge generated within the family
business is especially valuable because it is unique and specific.
Some common sources of external knowledge generally include
publications, educational programs, universities, government
agencies, consultants, the labour of professional associations,
availability, and qualification of external advisors (legal, tax,
marketing agencies), etc. The ability to absorb external
knowledge and integrate it into the inner environment can be a
competitive advantage of family businesses. The knowledge
transfer is essential for the future success or failure of the next
generation of the family business. Therefore it is very important
to involve the future successor into the operation of the family
business as soon as possible in order to gain as much tacit (non-
transferrable, obtained by one's own experience and stored in the
sub-consciousness of the company founder) knowledge in the
field as possible. The acquisition of professional explicit
(portable, easily articulated) and implicit (conscious, but hardly
transferable) knowledge must be also present. And here we face
a major problem. For example in the USA the family businesses
and their importance are taken very seriously and there are more
than 100 active family centres at the universities that help family
businesses solve their problems. (Mccann, 2000)
There is not sufficient attention given to the research of the
family business, succession planning including the necessary
succession strategy of the knowledge transfer by the external
environment not even by academia in the Czech Republic.
According to the results of the 32nd survey of the Association of
SMEs, nearly 70% of the Czech family businesses have no
succession plan which is directly related to the transfer of
knowledge to the successor generation. The family companies
temporize with handing over the management of the company.
The consequence of this is that approximately every third
company out of ten does not survive the succession. The third
generation, then, keeps the family business only in one case out
of ten. The owners underestimate the whole process of
transmission, although they realize that it will be challenging.
They are overwhelmed by the common tasks resulting from the
running of the company and then the handing over is managed
more intuitively and under time pressure. That can be very
dangerous. (Svobodová, 2015) This could lead to their gradual
extinction, to the loss of family traditions, of their know-how,
and to an increased unemployment.
In the whole process of succession, the key is to identify
individuals within the family who are interested and able to
continue the tradition and to gradually take over the crucial
powers. Exploring approaches to family business and offering
possible solutions to the issue of the management of the
succession strategies through knowledge management is
becoming a popular topic. If we generally understand
management skills as the systematic approach to creating,
acquiring, storing, disseminating, sharing and active using of
knowledge in order to enhance the performance of the
organization, then we can interpret the meaning of managing the
succession strategy in family firms as the process of knowledge
transfer in the synergistic relationship between the
predecessor and the successor. There is no need to explain the
fact that the relationship between the parent and his descendant
is vastly different from the way the "standard" relations between
superiors and subordinates work.
3.
The succession strategy in the practice of family companies
- case studies
For the purposes of this article there has been used the type of
case studies which clearly describe the surveyed unit and the
surveyed issue - how does the transmission of knowledge in
connection with the succession strategy happen in the specific
companies.
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