The impact of traditional succession planning on corporate governance in family-owned businesses in Jordanian context
The main aim of this research was to explore in-depth how professional succession planning might evolve corporate governance practices through identifying and describing the key aspects of family-owned businesses in Jordan. Further, this study considers how succession planning takes place and impacts corporate governance in achieving business strategic goals and objectives. The significance of this research derived from the importance of family-owned businesses continuity and sustainability in Jordan, given their contribution to the Jordan GDP and maintenance of social stability. This qualitative study was conducted through a semi-structured interview with founders of Jordanian family-owned businesses, CEOs, and candidate successors from different sectors. Data were analysed using a thematic analysis strategy and Kings' template tool. The thesis identifies many issues facing Jordanian family-owned businesses, given the unique aspects, founders' management style and cultural perspectives involved in these businesses. The findings of the thesis outline that implementing professional strategic management practices and professional succession plans is a solution for conflicts and disputes. Accordingly, preparing the next generation professionally will supply with skilled and qualified generation aware of Jordanian family businesses' aspects such as legal form, family size, the importance of decentralization, and delegation. The study concludes that there are four distinct factors of succession planning in Jordanian family-owned businesses. Firstly, the importance of deciding preparation plan for the next generation is tied with an educational plan and career path. Secondly, the importance of consultants in governance and succession issues. Thirdly, the separation between family and business issues, and avoid mixing problems with Islamic Sharia law. The fourth is deciding the family constitution and its role in managing conflicts. The study also pointed out that the impact of traditional succession plans on corporate governance is characterized by splitting the business in the long run and consequently split among family members and increasing the level of conflicts and disputes. This study finds that the subject of Jordanian family-owned businesses is open and amenable for further explanatory, descriptive, or exploratory research. Furthermore, many areas such as the family constitution and Jordanian culture, the effect of Sharia law and culture on the decision-making process, and governance and conflict management are considered for this type of business.
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