Succession Planning in Family Firms: Emotional Struggles and Gender Differences

Abstract

For family firms, succession embodies the central issue to be addressed in order to survive. However, many family firms do not succeed in transferring the leadership to a future family generation. This failure is generally due to a lack of adequate succession planning. A prominent reason for this absence is the family CEO’s emotion of being unable to let go of the firm. Though, the influence emotions have on organizational outcomes are likely contingent upon the family CEO’s gender as men and women vary in the way they think and behave. Therefore, by drawing on relational theory, we argue that the influence of emotions on succession planning is smaller in female-led family firms than in male-led family firms. Using a moderation analysis on a sample of 262 family firms, results show that the family CEO’s inability to let go negatively affects the level of succession planning when the family CEO is male. Differently, when the family CEO is female, the negative effect no longer holds. Thereby, we enrich the field of gender research by showing that emotions have a different outcome with regard to succession planning dependent on the family CEO’s gender.