Small enterprises (SEs) represent wide-world a fundamental factor in economic development and wealth. In Europe, small businesses account for some 99% of the total firms, and some 60-70% of total employment (Observatory of European SMEs, 2004). In a similar manner, family business is one of the most frequent organisational and managerial typology. The Family Firm Institute published data concerning the number of family business in industrialised countries. As such, in North America family businesses account for some 80-90%, while in the U.K. some 75%, in Germany two third of SMEs are family owned and managed, while in Italy they reach 80% (Shanker and Astrachan, 1996; Marseguerra, 2004). According to the Italian national statistics (ISTAT, 2001), 88,80% of firms employ less than 10 employees, 9,83% between 10 and 49 employees. If just the manufacturing sector is considered, the average dimensions increase but still some 87% of the firms employ less than 250 employees. Almost the totality of these firms (92%) can be considered family business, and employ some 79% of total employment in the manufacturing sector (Istat, 1996; Bank of Italy, 1996). One of the cause of business termination is the conclusion of ownership by one generation and the failure of the following generation to assume ownership. The European Commission’s study conducted by the Best Project Expert Group (2002) estimated that 1/3 of European SMEs will experience an intergenerational transfer in the next 10 years: on average, this would mean some 600.000 SMEs per year. Business transfer will become more and more strategic for the future economic stability and development in Europe, as larger number of entrepreneurs are reaching a retirement age. Thus, along the attention on business creation, it would become politically and economically necessary to develop actions, studies and projects on this specific topic. The literature suggests that 30% of firms survive into the second generation of family ownership, and just 15% survive into the third generation (e.g. Kets and Vries, 1993; Ward, 1987; Matthews, Moore and Fialko, 1999). The economic and social consequences of this data are relevant. Despite the importance of the issue, there is still wide areas for theoretical development (Sharma et al., 1996). The aim of this paper is to develop a theoretical model for managing knowledge in family business succession (FBS), informed by Intellectual Capital (IC) literature. In doing so, the paper draws from literature related to family business succession and IC management. FBS, in this sense, is perceived as a process of knowledge transfer to preserve the organisation’s future value creation capacity. The theoretical model is proposed as an hermeneutic device to understand how FBS can be connected to the management of IC. The paper will be structured as follows: section 2 will present a summary of the FB literature focussed on the business succession, while the third section will analyse the small businesses characteristics under an IC perspective. The fourth section describes the assumptions and structure of the theoretical model, addressing both reflections on its research and practical implications, and limitations. Finally, some concluding comments and recommendations are presented.

A knowledge framework for understanding small family business succession process

BRACCI, Enrico;VAGNONI, Emidia
2007

Abstract

Small enterprises (SEs) represent wide-world a fundamental factor in economic development and wealth. In Europe, small businesses account for some 99% of the total firms, and some 60-70% of total employment (Observatory of European SMEs, 2004). In a similar manner, family business is one of the most frequent organisational and managerial typology. The Family Firm Institute published data concerning the number of family business in industrialised countries. As such, in North America family businesses account for some 80-90%, while in the U.K. some 75%, in Germany two third of SMEs are family owned and managed, while in Italy they reach 80% (Shanker and Astrachan, 1996; Marseguerra, 2004). According to the Italian national statistics (ISTAT, 2001), 88,80% of firms employ less than 10 employees, 9,83% between 10 and 49 employees. If just the manufacturing sector is considered, the average dimensions increase but still some 87% of the firms employ less than 250 employees. Almost the totality of these firms (92%) can be considered family business, and employ some 79% of total employment in the manufacturing sector (Istat, 1996; Bank of Italy, 1996). One of the cause of business termination is the conclusion of ownership by one generation and the failure of the following generation to assume ownership. The European Commission’s study conducted by the Best Project Expert Group (2002) estimated that 1/3 of European SMEs will experience an intergenerational transfer in the next 10 years: on average, this would mean some 600.000 SMEs per year. Business transfer will become more and more strategic for the future economic stability and development in Europe, as larger number of entrepreneurs are reaching a retirement age. Thus, along the attention on business creation, it would become politically and economically necessary to develop actions, studies and projects on this specific topic. The literature suggests that 30% of firms survive into the second generation of family ownership, and just 15% survive into the third generation (e.g. Kets and Vries, 1993; Ward, 1987; Matthews, Moore and Fialko, 1999). The economic and social consequences of this data are relevant. Despite the importance of the issue, there is still wide areas for theoretical development (Sharma et al., 1996). The aim of this paper is to develop a theoretical model for managing knowledge in family business succession (FBS), informed by Intellectual Capital (IC) literature. In doing so, the paper draws from literature related to family business succession and IC management. FBS, in this sense, is perceived as a process of knowledge transfer to preserve the organisation’s future value creation capacity. The theoretical model is proposed as an hermeneutic device to understand how FBS can be connected to the management of IC. The paper will be structured as follows: section 2 will present a summary of the FB literature focussed on the business succession, while the third section will analyse the small businesses characteristics under an IC perspective. The fourth section describes the assumptions and structure of the theoretical model, addressing both reflections on its research and practical implications, and limitations. Finally, some concluding comments and recommendations are presented.
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11392/521347
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