The role of succession planning in the sustainability of family owned agribusinesses in South Africa

Abstract

The purpose of this research report was to establish what the key contributing factors are towards the long-term sustainability of family owned agribusiness in South Africa. The reason this study was conducted in the agribusiness sector is that 90% of agricultural enterprises in South Africa are reportedly family-owned. Succession was chosen as a key construct, considering the fact that the ability of enterprises to have long-term sustainability is influenced by whether or not they have a plan for succession. A case study method of analysis was used to collect data, which involved interviewing four commercial farming families in the Eastern Free State. It was established from the interviews that each family had unique drivers that enabled or inhibited the succession process. A comparative analysis was conducted to analyse the key factors responsible for a smooth transition and what the barriers were. The research study was also intended to assess how succession planning within South African family-owned agribusinesses was unique. The political context in the country had a major influence on how these farming families would plan for their sustainability going forward. The papers thus examined how these reasons affected black and white commercial farmers differently. The literature that was reviewed was based on the nature of family business succession planning as well as the agriculture sector in both a global and South African context. The theory base used was that of the Conceptual Model of Satisfaction with the Succession Process Sharma et.al. (2003) supported by other theoretical frameworks. The intent was to bring about knowledge that could contribute to the study of family businesses and to find key insights that may be useful to stakeholders in the agricultural sector be it from a firm, advisory, or policy formulating perspective. Copyright