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Business Succession Planning in Indian MSM-FOBEs: A Study Based on Managerial-Role Employees

Author

Listed:
  • Sudhir Kumar Jain

    (Sudhir Kumar Jain is a Professor in Department of Management Studies, Vishwakarma Bhawan, Indian Institute of Technology Delhi, Hauz Khas, New Delhi-110016, India. E-mail: skjain51@rediffmail.com)

  • Nalin Jain

    (Nalin Jain is an Associate Professor in International Management Institute (IMI), B-10, Qutab Institutional Area, Tara Crescent, New Delhi-110016, India. E-mail: nalin@imi.edu; jain_nalin@hotmail.com)

Abstract

Family owned business enterprises (FOBEs) are prolific contributors to the Indian economy. Micro, small and medium family owned business enterprises (MSM-FOBEs) form a substantial portion of Indian FOBEs. MSM-FOBEs are highly vulnerable to intergenerational business succession. The extent of succession planning, an important factor for the success of business succession, varies with the size of the MSM-FOBE. The number of managerial-role employees is one of the indicators of the size of the MSM-FOBE. The importance of business succession planning to the owner–manager is one of the determinants of the extent of succession planning in any MSM-FOBE. The importance of six succession planning issues to owner–managers is compared on the number of the managerial-role employees in their MSM-FOBEs. The study reveals higher importance of five succession issues to owner–managers of larger MSM-FOBEs that is, those with higher number of managerial-role employees. The lower importance of most succession planning issues among owner–managers of small Indian MSM-FOBEs (with no managerial-role employees) could be one of the reasons for their higher vulnerability to business succession.

Suggested Citation

  • Sudhir Kumar Jain & Nalin Jain, 2014. "Business Succession Planning in Indian MSM-FOBEs: A Study Based on Managerial-Role Employees," Global Business Review, International Management Institute, vol. 15(3), pages 517-530, September.
    • Handle: RePEc:sae:globus:v:15:y:2014:i:3:p:517-530
    DOI: 10.1177/0972150914535138
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    References listed on IDEAS

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