Succession Planning and Sustainabilty of Family Owned Business in South-East Nigeria

Abstract

The contributions of family owned businesses to the economic wellbeing of any nation are so remarkable that one cannot expect a world without family owned business. Despite their relevance and the positive economic impact on the Nigeria economy and in particular the South-East, their longevity and sustainability is often short-live. Available statistics shows that there is no family owned business in the South-East Nigeria that survived beyond the founder even to the third generation. This high mortality rate necessitated this study. The main objective is to determine the extent of the relationship that exists between primogeniture rule (the rule of first born) and longevity of family owned business in South-East Nigeria. Survey research design was adopted for the study. Primary data for this study were obtained mainly by means of questionnaire and interviews methods. The population of study were drawn from family owned businesses in different sectors that registered with the Ministries of Trade, Commerce, Industry and Tourism in the states of South-Eastern Nigeria, as at 2021. A sample size of 216 was determined using Yamane’s formula. Descriptive statistics such frequency counts with simple percentage was used to analyze data collected while Z-score was used to test the hypothesis formulated. The findings shows existence of a positive relationship between factors associated with primogeniture (first born) rule of inheritance and succession planning in family owned businesses in South-East Nigeria. It was recommended that owner-founder of family owned business should pay ample attention to managing culture and acknowledge the importance of succession planning and develop a well-designed, functional succession plan for the future.