Factors Influencing Strategic Succession Planning for Small & Medium Family Enterprises in Nairobi Central Business District

Abstract

The purpose of this study to identify factors determining successive strategic succession plans for family SME businesses in Nairobi Central Business District. There are three research questions that have been addressed by this study: What role does effective leadership play on successive family succession strategy? What role does gender play in determining successive family succession plans? To what extend does successor attributes factors affect family succession plans? The study has used descriptive survey design to ascertain and describe the characteristics of the variable of interest in this situation. A descriptive cross sectional research design was used in the study. The population of interest in this study was small and medium size family owned businesses operating in Nairobi County Central Business District as at June 2015. This study used convenient sampling technique. The study surveyed 36 small and medium size family businesses in Nairobi Central Business District. Data was collected using self-administered and emailed questionnaires. The questionnaire adopted the quantitative research method which uses close-ended questions. The data analysis was quantitative. The data from the questionnaire was coded into numerical data for analysis. It has been presented in the forms of graphs and tables and this information analyzed for the beneficial of Small and Medium Size Family owned businesses in Kenya as it will explore the factors influencing successive business succession planning in Family Businesses. In regards to the first research question, the study found out that most of the respondents displayed the knowledge of vision formulation and the process of relinquishing control. However, the respondents showed little understanding of the mentorship program in relation to succession planning. On the question of what role gender plays in determining success of succession planning, the respondents in the study indicated that they will consider all members in their inheritance plan regardless of gender. The respondents were of the opinion that religious inheritance laws do not govern their succession planning. In addressing the third research question; to what extend does successor attributes factors affect family succession plans? The study found out that the majority of the respondents will consider the following successor attributes during succession planning; age, successor’s relationship with current CEO and family members, commitment to the business and successor’s competence as key in succession planning. From this study we can conclude that, effective leadership and successor attributes play a role in successive strategic succession planning however gender does not to play a role in successive succession planning. The study recommends that since effective leadership plays a role in succession planning, we should seek to gain mastery experience in envision the future and sharing the vision. We should also master the experience of relinquishing control. Important to note that mentorship still remains a challenge among us, thus we should enroll in mentorship causes and trainings. Gender is decreasingly becoming a less important factor affecting succession planning as per this study. However we should continue raising awareness to the importance of treating all gender equally in regards to inheritance of family business.