IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i2p1237-d1029990.html
   My bibliography  Save this article

Sustainability of Taiwanese SME Family Businesses in the Succession Decision-Making Agenda

Author

Listed:
  • Cheng-Wen Lee

    (Department of International Business, College of Business, Chung Yuan Christian University, Taoyuan City 320314, Taiwan)

  • Hsiao Chuan Chen

    (Ph.D. Program in Business, College of Business, Chung Yuan Christian University, Taoyuan City 320314, Taiwan)

  • Choong Leng Peng

    (Ph.D. Program in Business, College of Business, Chung Yuan Christian University, Taoyuan City 320314, Taiwan)

  • Shu Hui Chen

    (Ph.D. Program in Business, College of Business, Chung Yuan Christian University, Taoyuan City 320314, Taiwan)

Abstract

SME family businesses play a vital role in the world economy as a recognized sustainable contributor to economic growth. Aged owners of Taiwan’s family businesses have become the biggest problem; because of the dramatically changing technology and business environment, many family businesses are faced with an inheritance crisis. This study tries to identify what the priority of influential factors is for the leader’s decision-making of succession. Based on the stakeholder, upper echelons, stewardship, and agency theories, we summarized 27 crucial factors derived from four dimensions (individual, interpersonal, organizational, and the environmental) after reviewing the relevant literature. This study was based on multilevel research and a multidisciplinary perspective. After using the Delphi method and decision-making trial and evaluation laboratory (DEMATEL) method, we applied the importance–performance analysis (IPA) to determine the key factor priority. The results are important for strengthening family business theory and identifying the conditions that best promote the future growth and sustainability of family businesses.

Suggested Citation

  • Cheng-Wen Lee & Hsiao Chuan Chen & Choong Leng Peng & Shu Hui Chen, 2023. "Sustainability of Taiwanese SME Family Businesses in the Succession Decision-Making Agenda," Sustainability, MDPI, vol. 15(2), pages 1-21, January.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:2:p:1237-:d:1029990
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/2/1237/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/2/1237/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Naveen, Lalitha, 2006. "Organizational Complexity and Succession Planning," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 41(3), pages 661-683, September.
    2. Juha Kansikas & Tuomas Kuhmonen, 2008. "Family Business Succession: Evolutionary Economics Approach," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 16(03), pages 279-298.
    3. Peter S. Davis & Paula D. Harveston, 2001. "The Phenomenon of Substantive Conflict in the Family Firm: A Cross‐Generational Study," Journal of Small Business Management, Taylor & Francis Journals, vol. 39(1), pages 14-30, January.
    4. Chen, Cheng & Steinwender, Claudia, 2021. "Import competition, heterogeneous preferences of managers, and productivity," Journal of International Economics, Elsevier, vol. 133(C).
    5. Fama, Eugene F & Jensen, Michael C, 1983. "Agency Problems and Residual Claims," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 327-349, June.
    6. Villalonga, Belen & Amit, Raphael, 2006. "How do family ownership, control and management affect firm value?," Journal of Financial Economics, Elsevier, vol. 80(2), pages 385-417, May.
    7. Umans, Ine & Lybaert, Nadine & Steijvers, Tensie & Voordeckers, Wim, 2021. "The influence of transgenerational succession intentions on the succession planning process: The moderating role of high-quality relationships," Journal of Family Business Strategy, Elsevier, vol. 12(2).
    8. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    9. Randall K. Morck, 2000. "Concentrated Corporate Ownership," NBER Books, National Bureau of Economic Research, Inc, number morc00-1.
    10. Yeh, Yin-Hua & Liao, Chen-Chieh, 2020. "The impact of product market competition and internal corporate governance on family succession," Pacific-Basin Finance Journal, Elsevier, vol. 62(C).
    11. Randall Morck & David Stangeland & Bernard Yeung, 2000. "Inherited Wealth, Corporate Control, and Economic Growth The Canadian Disease?," NBER Chapters, in: Concentrated Corporate Ownership, pages 319-372, National Bureau of Economic Research, Inc.
    12. Jau Yang Liu, 2018. "An Integrative Conceptual Framework for Sustainable Successions in Family Businesses: The Case of Taiwan," Sustainability, MDPI, vol. 10(10), pages 1-21, October.
    13. Sea-Jin Chang & Jungwook Shim, 2015. "When does transitioning from family to professional management improve firm performance?," Strategic Management Journal, Wiley Blackwell, vol. 36(9), pages 1297-1316, September.
    14. Paul Geroski & Steve Machin & John Van Reenen, 1993. "The Profitability of Innovating Firms," RAND Journal of Economics, The RAND Corporation, vol. 24(2), pages 198-211, Summer.
    15. Bertrand, Marianne & Johnson, Simon & Samphantharak, Krislert & Schoar, Antoinette, 2008. "Mixing family with business: A study of Thai business groups and the families behind them," Journal of Financial Economics, Elsevier, vol. 88(3), pages 466-498, June.
    16. Lucrezia Songini & Paola Vola, 2015. "The Role of Professionalization and Managerialization in Family Business Succession," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2015(1), pages 9-43.
    17. Mehrabi, Hamed & Coviello, Nicole & Ranaweera, Chatura, 2021. "When is top management team heterogeneity beneficial for product exploration? Understanding the role of institutional pressures," Journal of Business Research, Elsevier, vol. 132(C), pages 775-786.
    18. Giachetti, Ronald E. & Martinez, Luis D. & Saenz, Oscar A. & Chen, Chin-Sheng, 2003. "Analysis of the structural measures of flexibility and agility using a measurement theoretical framework," International Journal of Production Economics, Elsevier, vol. 86(1), pages 47-62, October.
    19. Morck, Randall K. (ed.), 2000. "Concentrated Corporate Ownership," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226536781, August.
    20. Isabelle Le Breton–Miller & Danny Miller, 2015. "The Arts and Family Business: Linking Family Business Resources and Performance to Industry Characteristics," Entrepreneurship Theory and Practice, , vol. 39(6), pages 1349-1370, November.
    21. Ibrahim H. Garbie, 2012. "Concepts and measurements of industrial complexity: a state-of-the-art survey," International Journal of Industrial and Systems Engineering, Inderscience Enterprises Ltd, vol. 12(1), pages 42-83.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. ElBannan, Mona A., 2017. "Stock market liquidity, family ownership, and capital structure choices in an emerging country," Emerging Markets Review, Elsevier, vol. 33(C), pages 201-231.
    2. Oriana Bandiera & Renata Lemos & Andrea Prat & Raffaella Sadun, 2018. "Managing the Family Firm: Evidence from CEOs at Work," The Review of Financial Studies, Society for Financial Studies, vol. 31(5), pages 1605-1653.
    3. Randall Morck, 2011. "Finance and Governance in Developing Economies," Annual Review of Financial Economics, Annual Reviews, vol. 3(1), pages 375-406, December.
    4. Bennedsen, Morten & Fan, Joseph P.H. & Jian, Ming & Yeh, Yin-Hua, 2015. "The family business map: Framework, selective survey, and evidence from Chinese family firm succession," Journal of Corporate Finance, Elsevier, vol. 33(C), pages 212-226.
    5. Pradiptarathi PANDA & Jinesh PANCHALI, 2019. "Corporate ownership structure and performance: An enquiry into India," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(4(621), W), pages 93-110, Winter.
    6. Barontini, Roberto & Bozzi, Stefano, 2018. "Family firm heterogeneity and CEO compensation in Continental Europe," Journal of Economics and Business, Elsevier, vol. 97(C), pages 1-18.
    7. Suveera Gill & Parmjit Kaur, 2015. "Family Involvement in Business and Financial Performance: A Panel Data Analysis," Vikalpa: The Journal for Decision Makers, , vol. 40(4), pages 395-420, December.
    8. Xu, Nianhang & Yuan, Qingbo & Jiang, Xuanyu & Chan, Kam C., 2015. "Founder's political connections, second generation involvement, and family firm performance: Evidence from China," Journal of Corporate Finance, Elsevier, vol. 33(C), pages 243-259.
    9. González, Maximiliano & Guzmán, Alexander & Pombo, Carlos & Trujillo, María-Andrea, 2012. "Family firms and financial performance: The cost of growing," Emerging Markets Review, Elsevier, vol. 13(4), pages 626-649.
    10. Fuxiu Jiang & Xiaojia Zheng & Wei Tang, 2018. "Non-family chair and corporate performance," Frontiers of Business Research in China, Springer, vol. 12(1), pages 1-30, December.
    11. Laura Abrardi & Laura Rondi, 2020. "Ownership and performance in the Italian stock exchange: the puzzle of family firms," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 47(4), pages 613-643, December.
    12. repec:agr:journl:v:4(621):y:2019:i:4(621):p:93-110 is not listed on IDEAS
    13. Attiya Y. Javid & Robina Iqbal, 2010. "Corporate Governance in Pakistan : Corporate Valuation, Ownership and Financing," Governance Working Papers 22830, East Asian Bureau of Economic Research.
    14. Andrea Bassanini & Thomas Breda & Eve Caroli & Antoine Rebérioux, 2010. "Working in family firms: less paid but more secure? Evidence from French matched employer-employee data," Working Papers halshs-00564972, HAL.
    15. Erbetta, Fabrizio & Menozzi, Anna & Corbetta, Guido & Fraquelli, Giovanni, 2013. "Assessing family firm performance using frontier analysis techniques: Evidence from Italian manufacturing industries," Journal of Family Business Strategy, Elsevier, vol. 4(2), pages 106-117.
    16. Kuo-Pin Yang & Gavin M. Schwarz, 2016. "A Multilevel Analysis of the Performance Implications of Excess Control in Business Groups," Organization Science, INFORMS, vol. 27(5), pages 1219-1236, October.
    17. Pan, Yue & Weng, Ruoyu & Xu, Nianhang & Chan, Kam C., 2018. "The role of corporate philanthropy in family firm succession: A social outreach perspective," Journal of Banking & Finance, Elsevier, vol. 88(C), pages 423-441.
    18. El Ghoul, Sadok & Guedhami, Omrane & Wang, He & Kwok, Chuck C.Y., 2016. "Family control and corporate social responsibility," Journal of Banking & Finance, Elsevier, vol. 73(C), pages 131-146.
    19. Sumon Kumar Bhaumik & Andros Gregoriou, 2010. "‘Family’ Ownership, Tunnelling And Earnings Management: A Review Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 24(4), pages 705-730, September.
    20. Hamadi, Malika & Heinen, Andréas, 2015. "Firm performance when ownership is very concentrated: Evidence from a semiparametric panel," Journal of Empirical Finance, Elsevier, vol. 34(C), pages 172-194.
    21. Dorra Ellouze & Khadija Mnasri, 2019. "Risk-taking behaviour of family firms: evidence from Tunisia," Post-Print hal-02999642, HAL.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2023:i:2:p:1237-:d:1029990. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.