The mechanisms and process of succession in industrial family businesses: case studies in the Iranian context

Abstract

Management in industrial family businesses in textiles, in a politically-charged Iran, tends to seek continuity through inter-generational succession. Scant research into the phases involved and the influences in this regional context means that it would be commercially advantageous to understand how such families manage the process of succession, and what these influences actually are. Thus, initially a broad literature review was conducted in the area of family business succession, to discern whether the succession process of Iranian family business is aligned with existing literature; a conceptual framework representing succession in the target group was developed; and broad influential factors on the abovementioned succession process were identified, and probed for their criticality. Subsequently, this work follows an inductive approach of constructing theoretical frameworks from looking interpretively across multiple case study findings, from company interviews where successors were male, female and joint-tenure. It initially devotes considerable attention to articulating themes of the drivers and challenges, and transition strategy, before distilling through cross-case analysis the essential influential factors and what defines the phases that a successor proceeds through, from both successor and predecessor perspectives. Finally these are discussed with a number of insights coming into focus, namely the peculiarities of: the environment given the governance issues and internationally sanctioned business conditions; the foreign education experience of English-speaking successors and their autonomy as part of their identity alongside their surpassing of the predecessor academically which drives modernisation; and trust as a clear milestone marker. Notably, the widely accepted conceptualisation of succession in four phases – initiation, integration, joint reign and withdrawal – is extended in this work to include an initial phase, priming, supported by substantive literature on affective commitment arising from parent-child relations. Further, a complex conceptual mapping of the innate phase-specific characteristics helps in the understanding of successor capacity and progress. Notwithstanding the limitations inherent from using a flexible instrument in a qualitative study across narrow business perspectives, and without claim to any single generalisation, management consultancy and practice might consider being alert to the above insights and pressures emanating from important points on the two conceptualised models. The study also has an exploratory aspect that opens up multiple avenues for further investigation into specific mechanisms within this type of transition.