FAMILY BUSINESS PROBLEMS: FACTORS AFFECTING THE SUCCESS OF FAMILY BUSINESS FOLLOWING THE SUCCESSION

George T. Solomon George Washington University Sandra King California State Polytechnic University, Pomona Ayman Tarabishy George Washington University and Erik K.Winslow George Washington University ABSTRACT Recent research suggests that more family business owners will be leaving the business to more than one child. Therefore, the issue of succession in a family business will also require incorporating the problems of more than one successor. This means that what a lone ranger used to be able to dream-up, create and grow into a business, will now be manage by task forces, councils, and shared ownership. Depending on the siblings goals and objectives, sibling partners may require a different strategic orientation,- i.e., growth versus profitability. In addition, differences in managerial styles may send mixed messages to the employees. For example, the literature suggests that management decisions such as whether to err on the side of quality or number of units shipped can cause major problems among the employees. In addition, the research supports that business partnerships in general have not worked well and when adding to it the family dynamics, the added stress could destroy both the family and the business. As evidenced in the study, equal stock ownership and sibling rivalry becomes a greater issue in businesses that are initially successful after a succession. The issue then becomes whether the more successful family businesses become, the greater the potential is that sibling rivalry and equal stock ownership can eventually destroy an initially successful business. The study provides a basis for continued research for researchers in the field of family business dealing with succession issues, in addition to new insights for consultants and educators