Leadership Development And Succession Practices In Family Businesses In Saudi Arabia (Dissertation Sample)

LEADERSHIP DEVELOPMENT AND SUCCESSION PRACTICES IN FAMILY BUSINESSES IN SAUDI ARABIA
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Table of Contents TOC \o "1-3" \h \z \u 1.0Introduction PAGEREF _Toc479884284 \h 21.1Family Business PAGEREF _Toc479884285 \h 21.2Leadership and Succession in Family Business PAGEREF _Toc479884286 \h 41.3Research Rationale PAGEREF _Toc479884287 \h 61.4Research Objectives PAGEREF _Toc479884288 \h 71.5Research Questions PAGEREF _Toc479884289 \h 72.0Literature Review PAGEREF _Toc479884290 \h 82.1 Importance of Well-Structured Succession plan in Family Business PAGEREF _Toc479884291 \h 82.2 Characters and Leadership Skills to look when developing a Succession Plan PAGEREF _Toc479884292 \h 152.3 Characteristics of the Family Firms that are more likely to Adopt Well-Established and Governed Leadership PAGEREF _Toc479884293 \h 192.4 Theoretical Framework PAGEREF _Toc479884294 \h 21Theory of Social Capital PAGEREF _Toc479884295 \h 21Tuckman’s Forming Storming Norming Performing Four Stage Model PAGEREF _Toc479884296 \h 22Behavioral Theory of Leadership: Michigan Studies PAGEREF _Toc479884297 \h 233. Methodology PAGEREF _Toc479884298 \h 253.1 Introduction PAGEREF _Toc479884299 \h 253.2 Research design PAGEREF _Toc479884300 \h 253.3 Research context PAGEREF _Toc479884301 \h 263.4 Procedure PAGEREF _Toc479884302 \h 273.5 Methods for data collection PAGEREF _Toc479884303 \h 283.6 Methods of data analysis PAGEREF _Toc479884304 \h 283.7 Research Limitations PAGEREF _Toc479884305 \h 293.8 Ethical Concerns PAGEREF _Toc479884306 \h 294.0 Findings PAGEREF _Toc479884307 \h 314.1 Family Business Awareness of the Succession Theories and Leadership Development PAGEREF _Toc479884308 \h 314.2 Family Business Succession Planning PAGEREF _Toc479884309 \h 334.3 Process and Challenges in Acquiring Information Regarding Succession Planning PAGEREF _Toc479884310 \h 354.4 Characters and Leadership Skills to look when developing a Succession Plan PAGEREF _Toc479884311 \h 365.0 Discussions PAGEREF _Toc479884312 \h 385.1 Introduction PAGEREF _Toc479884313 \h 385.2 Importance of Well-Structured Succession Plan PAGEREF _Toc479884314 \h 385.2.2 Benefits of Succession Planning PAGEREF _Toc479884315 \h 395.3 Succession Plan in Saudi Arabian Family Businesses PAGEREF _Toc479884316 \h 41Forming PAGEREF _Toc479884317 \h 41Storming PAGEREF _Toc479884318 \h 42Norming PAGEREF _Toc479884319 \h 43Performing PAGEREF _Toc479884320 \h 435.4 Characters and Leadership Skills to Look When Developing a Succession Plan for Family-Owned Businesses in Saudi Arabia. PAGEREF _Toc479884321 \h 44The Capacity to Lead PAGEREF _Toc479884322 \h 44Competence and Management Skills PAGEREF _Toc479884323 \h 45Willingness and Commitment of the Successor PAGEREF _Toc479884324 \h 476.0 Conclusions PAGEREF _Toc479884325 \h 487.0 Recommendations PAGEREF _Toc479884326 \h 51
1 Introduction
1 Family Business
Family businesses play an important role in terms of creating employment as well as wealth in all nations globally. ADDIN CSL_CITATION { "citationItems" : [ { "id" : "ITEM-1", "itemData" : { "DOI" : "10.1108/IJEBR-01-2015-0020", "ISBN" : "1355255961", "ISSN" : "13552554", "abstract" : "Purpose - The succession process represents one of the most critical events in the family business lifecycle. The purpose of this paper is to explore this process while focussing first on the drivers behind the choice of successor and, second, on the impact of this choice on the entrepreneurial behavior of the siblings. Design/methodology/approach - The qualitative approach was used in which multiple case analyses were performed. A total of 12 cases were purposively selected from the Lebanese private sector, and semi-structured interviews were conducted with the successors and the founders when available. The interview data were transcribed and a coding scheme was created to generate relevant categories. Those categories were named and later re-assessed by an external researcher to ensure inter-rater reliability. Findings - The three dimensions of social capital were found to have a profound influence on the succession decision with much focus on familial stewardship as an emerging cognitive driving force. When \"familial stewardship\" is shared by incumbent and sibling, it strengthens the latter's chances of being chosen as successor. Further, a succession pathways model was introduced that depicts the siblings' behavior following the succession decision which seems to often trigger further entrepreneurship. Originality/value - This study is distinct as it introduces a new cognitive construct that helps rationalize the successor-selection decision in a Middle Eastern context. It also goes beyond the succession event to depict potential entrepreneurial behavior triggered by succession.", "author" : [ { "dropping-particle" : "", "family" : "Bizri", "given" : "Rima", "non-dropping-particle" : "", "parse-names" : false, "suffix" : "" } ], "container-title" : "International Journal of Entrepreneurial Behaviour & Research", "id" : "ITEM-1", "issue" : "1", "issued" : { "date-parts" : [ [ "2016" ] ] }, "page" : "133-154", "title" : "Succession in the family business: drivers and pathways", "type" : "article-journal", "volume" : "22" }, "uris" : [ "/documents/?uuid=cdf68ad2-06df-471d-aac6-fb4fa6e035dc" ] } ], "mendeley" : { "formattedCitation" : "(Bizri 2016)", "plainTextFormattedCitation" : "(Bizri 2016)", "previouslyFormattedCitation" : "(Bizri 2016)" }, "properties" : { "noteIndex" : 0 }, "schema" : "https://github.com/citation-style-language/schema/raw/master/csl-citation.json" }(Bizri, 2016, pp. 134). In both developed and developing economies, family businesses are rapidly becoming the primary form of business enterprise and their numbers and influence is expected to increase in the future ADDIN CSL_CITATION { "citationItems" : [ { "id" : "ITEM-1", "itemData" : { "DOI" : "10.1111/etap.12068", "ISBN" : "10422587", "ISSN" : "10422587", "PMID" : "91824658", "abstract" : "We investigate factors that influence family business owners' choice between passing ownership within the family or to new external owners. Taking an embeddedness perspective focusing on owner-family structure and involvement, we hypothesize that ownership dispersion, number of potential heirs, multigenerational involvement, and whether the chief executive officer is a family member influence the choice of an internal or external transition of ownership. We build a longitudinal data set from a sample of 3,829 family firms and their ownership transitions. Our theorizing and findings regarding ownership transitions complements the abundant research on management succession and therefore constitutes an important contribution to the literature. [ABSTRACT FROM AUTHOR]", "author" : [ { "dropping-particle" : "", "family" : "Wiklund", "given" : "Johan", "non-dropping-particle" : "", "parse-names" : false, "suffix" : "" }, { "dropping-particle" : "", "family" : "Nordqvist", "given" : "Mattias", "non-dropping-particle" : "", "parse-names" : false, "suffix" : "" }, { "dropping-particle" : "", "family" : "Hellerstedt", "given" : "Karin", "non-dropping-particle" : "", "parse-names" : false, "suffix" : "" }, { "dropping-particle" : "", "family" : "Bird", "given" : "Miriam", "non-dropping-particle" : "", "parse-names" : false, "suffix" : "" } ], "container-title" : "Entrepreneurship: Theory and Practice", "id" : "ITEM-1", "issue" : "6", "issued" : { "date-parts" : [ [ "2013" ] ] }, "page" : "1319-1340", "title" : "Internal versus external ownership transition in family firms: An embeddedness perspective", "type" : "article-journal", "volume" : "37" }, "uris" : [ "/documents/?uuid=7c5d36fb-1afb-433a-81d1-07aac045bfaa" ] } ], "mendeley" : { "formattedCitation" : "(Wiklund et al. 2013)", "plainTextFormattedCitation" : "(Wiklund et al. 2013)", "previouslyFormattedCitation" : "(Wiklund et al. 2013)" }, "properties" : { "noteIndex" : 0 }, "schema" : "https://github.com/citation-style-language/schema/raw/master/csl-citation.json" }( Wiklund, Hellerstedt, Karin & Miriam, 2013, 1320). Wallace (2010) explains that family-owned businesses especially the small sized and medium-sized business form the grassroots of the global economy and they are the majority of the businesses globally. It is important to note that, there is a distinction between “family businesses” and “small business.” There are several large corporations that are perceived as a family business, however, the majority of the family business is a small business that employs less than 20 employees. Astrachan and Shanker (2003) identified that there are three operational definitions of family business based on the family involvement. The first definition is based on the condition that the family has the voting control over the business. The second definition is based on the definition that the family is involved in the day to day operations of the business. The third definition attempts to classify family business as a business in which the family members have the voting control of the business as well as involvement in the everyday operations of the family.
Despite the definition of family business used, it is vital to note that, they contribute immensely to the gross domestic product of Saudi Arabia. According to Ramady and Sohail (2010), family business forms an important infrastructure for boosting economic activities and the creation of wealth in Saudi Arabia. Globally, the family business has played an important role in economic development. A study done by Astrachan and Shanker 2003 reveal that over two-thirds of the businesses worldwide are managed by family enterprises. This contributes to over half of the GDP-economic activity. For instance, in USA and Canada, about ninety percent of the business is family owned (Zata, Poutziouris, Steier and Smyrnios 2004 pp. 8). Despite the im...