THE CHALLENGES OF PASSING MANAGEMENT FROM OLDER GENERATIONS TO YOUNGER GENERATIONS IN FAMILY-OWNED BUSINESS

Abstract

It's a cliché that the first generation sows the seeds, the second generation reaps the fruits, and the third generation leaves the leftovers. The implication of this statement is that it is clear that the first generation worked hard to start this business and keep it on track. The second generation just takes this business and enjoys the wealth that their ancestors created. But if they don't work hard to grow this business, by the time the third generation is ready to take over, this business will be in shackles. The first generation of entrepreneurs establishes the company, and over time, passes it down to younger successors. However, passing on the management of family-owned businesses from older to younger generations can be challenging due to differentiated management styles, generational issues, and family management conflicts. In this paper, I aim to address the challenges of family business development and provide practical suggestions for family businesses to thrive. I conducted qualitative analysis by interviewing seven successors from six family-owned businesses about the difficulties and challenges of managing family businesses, as well as the advice of younger generations on taking over. Based on our findings, I identified three main challenges for the younger generation to take over the family business: managing the family business, leadership, and business development. Finally, I provide some inspirations and suggestions for the younger generation to take over the management of the family business. To overcome the challenges of family business development, it is crucial for the younger generation to respect the age gap between older and younger employees internally, develop effective communication channels, establish and implement mutual help systems, foster a culture of innovation and teamwork, and develop an organization that is flexible and encourages teamwork. Externally, it is essential to shift the current business model, actively seek new cooperation and industrial innovation, and address the problems encountered during the development of the company.