Small Business Review

Case Study
Pages 10 (2510 words)
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The issue of management succession in small and medium sized businesses is of paramount importance to the founding entrepreneurs if the business is to survive and grow into a larger organisation. For instance, in the UK, the DIY wholesale company - B&Q started off as a small business which eventually grew into the main and/or leading retailer of home and trade improvement products.


Whilst this may seem like a relatively simple task to orchestrate, it is actually a difficult task considering that most SMEs are family owned businesses (Bowman-Upton 1991).
Lassini (2005) found that family businesses are unlikely to survive after the third generation with only 30% of these businesses successfully handing over leadership to the second generation and 12% handing over to the third generation. Lassini (2005) also found that nearly 2-3% of family businesses progress to permanent development, compared with approximately 97% that either close down or are sold. There are a variety of reasons for these statistics, some of which include the fact that some of these businesses are started by immigrant populations. As their children get older, they can lose interest in the family business and develop a preference for integrating with other members of society by attending university, or moving into mainstream employment. Some of the businesses may not be owned by immigrant populations but the younger generation are constantly under pressure to take on employment offers in the more seemingly attractive areas of technology, media and other more glamorous occupations which offer bigger pay packets and benefits.
This demonstrates the importance of manageme ...
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