Socioemotional Wealth, Bequest Motives, And Owner Tenure: A Conceptual Framework For Succession Intentions In Family Businesses

Abstract

Family businesses play a significant role in economic development and in each national economy. However, these businesses often face challenges in maintaining longevity and survivability beyond the first generation. The objective of this conceptual paper is to identify the influence of Socioemotional Wealth (SEW) through the FIBER dimension and bequest motives on the succession intentions of the family business owners. Specifically, this conceptual paper seeks to identify the influence of the family business owners’ affective needs and motives behind their intergenerational transfer of assets and shares on the succession intentions to the next generation. Owners who prioritise the preservation of SEW and possess motives for dynastic intergenerational transfer are likely to have higher succession intention to ensure the power and benefits retain within the family. Therefore, bequest motives are proposed as a mediator between the SEW and succession intention as well. The owner tenure acts as the moderator between the SEW and succession intention. Owners with long tenure may get used to the power and influence over the family business, leading to lower succession intention despite seeking to preserve the family business within the family. Therefore, this conceptual framework seeks to understand the factors influencing the succession intention from the perspective of owners’ affective needs and economic justification behind making intergenerational transfer