Survival of a family business as a viable entity : a South African case

Abstract

The study highlights the determinants of continuity and viability for a South African family owned firm across three generations. Family firms contribute significantly to the South African and global economy, and are therefore an area of interest for family firms and academics alike. For the purposes of this study, continuity means the existence and transfer of ownership of the firm across generations, while viability means profitability. The primary objective of this study is to explore the purported determinants of continuity and viability of the firm and to determine the impact these factors has on the continuity and viability of the firm. Ideals is firm that has successfully transitioned across three generations as a viable entity. The target population for this study was family members who are employed in the firm as well as all non-family employees of the firm. A total of six open ended interviews were held and a total of 62 individual surveys were returned from 146 employee surveys sent out. The interview data collected was subjected to qualitative data analysis methods including content analysis, narrative enquiry, constant comparative and triangulation. The employee survey data was subjected to statistical analysis. The findings of this study shows a positive effect of governance practices, long term vision, sound value system, calculated risk taking and strategic and succession planning activities on the continuity and viability of the firm.