Study of the next generation finds men surveyed significantly more likely to intend to be a successor than women, and to feel a significantly higher degree of ‘psychological ownership’ of the business.
Ireland is bucking the international trend when it comes to succession in family businesses, according to a new DCU National Centre for Family Business study.
The report entitled ‘To Join or Not to Join? Understanding the Succession Intentions of Next-generation Family Business Members’ was recently launched at AIB Head Office on Molesworth Street in Dublin. AIB is a longstanding partner of DCU’s National Centre for Family Business.
Employing nationwide surveys and interviews with higher-education students from a family business background, this project uncovered ample evidence that the worldwide succession crisis may not be so stark for the island of Ireland. Almost half (48%) of respondents have seriously thought about taking over their family’s business one ay. 40% have strong intentions to become a successor. However, the strongest intent rating was chosen twice as often by men as potential successors’ (66%) than their women counterparts (33%).
This gender discrepancy is also found in perceived ownership stakes of the next generation. While 85% of all respondents do not hold a financial ownership stake in their family’s business, 39% of next-gen members reported feeling a very high degree of psychological ownership for the business. Men were significantly more inclined to strongly feel this very high degree of personal ownership (59%), than their women counterparts (41%).
A strong theme of family succession also emerges from the research, as 72% of respondents believe the next CEO of the family business will be a family member. When questioned about determining factors in choosing the next line, level of interest in the business is believed to most influence the choice of successor, and order of birth the least influential.
The study also found a largely positive perception of the impact of family businesses on the world around them, nearly three quarters (73%) agree that their family business is recognised for positively contributing to the local community, while 62% agree that involvement in their family business will allow them to positively contribute to sustainable cities and communities.
In the Republic of Ireland, family businesses represent over 64% of all firms and employ over 940,000 people. Dr Eric Clinton, Director of the DCU National Centre for Family Business, said: “Family businesses are the bedrock of economies and communities, exercising the dynastic will to build strong businesses and survive the social and economic crises that often crush non-family businesses. Despite this prominence, a global succession crisis has recently emerged, but not for the island of Ireland. We found that succession aspirations are healthy, and the shaping of next-generation intentions regarding educational choices, sustainability, emotional well-being and socio-emotional wealth will each play a
vital role in realising these aspirations to maintain a resilient all-island economy.”
You can view the full report here, https://tinyurl.com/DCUSTUDYFAMILY
