Important selection criteria in family business succession and the transfer of social network in family business

Abstract

This paper investigated the requirements that a family business successor must possess to be considered as a suitable successor. The paper also explored the different methods of business network transfer between generations. Even though there are large number of researches on family business succession and networking, this very same topic has not received much attention in Thailand and is still understudied. Therefore, to add to the existing literature on family business succession, this study served as another review on the topic and provides cross-cultural data to make the current research more robust. This paper identified the most important criteria in the process of successor selection and network transfer. The study collected the data by 60 interviews from conducted across 30 Thai households. The results indicated that the possession of certain sets of personality traits are considered to be the most important criterion from both the incumbent and the successor's point of view. Surprisingly, family standing was rated as the least important among other factors despite its importance shown by several literature. For social networks, all respondents have acknowledged the importance of networks and do agree that a successor must be competent enough to be able to build and maintain the existing business allies. There are different means engaged by the concerning parties to prepare the chosen successor to be as competitive as possible. One of the most common ways is to gather experience within the family business. Another is through education and committing real-life consequential business decisions. The respondents also hold different views on how business networks can be transferred to the next generation, some of which are: the transference of social network with the help of a family member. Another is the automatic transference of networks along with succession.