How about this other succession option? Gaining a deeper understanding of the conditions under which a nonfamily CEO can thrive

Abstract

Family firms serve as the backbone of many economies throughout the world. Few family firms, however, manage to survive into the next generations. When it comes to succession, the owner has to choose between appointing a family member, selling the firm, or hiring a non-family member to fulfill the function of the CEO.Despite the widespread attention given to succession issues, the effects of hiring a nonfamily CEO has received scant attention. Moreover, research also indicates significant differences in post-succession performance between family and nonfamily CEOs. Given the large economic importance and mixed research conclusions, there is an absolute necessity for research that identifies the conditions under which a nonfamily CEO will lead to firm success. This paper aims to provide an answer to this matter by adopting a qualitative study. Our guiding research question is: “How and when do nonfamily CEOs lead to firm success and why?”. We draw on an inductive theory building approach, based on interview data of seven family firm owners and their nonfamily CEOs.