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Succeeding a family business in a transition economy: Is this the best that can happen to me?
Predrag Ljubotina, Jaka Vadnjal,
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Predrag Ljubotina, Jaka Vadnjal, "Succeeding a family business in a transition economy: Is this the best that can happen to
me?", Kybernetes, https://doi.org/10.1108/K-06-2016-0148
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 Succeeding a family business in a transition economy: Is this the
best that can happen to me?

Abstract

Purpose - Family business successors have three career options. They may (1) find a job or
(2) start their own business or (3) join their family business and eventually take it over. This
broadens the scope of a common entrepreneurial dilemma of whether to start a new venture or
seek for hired employment. Our purpose is to highlight the problem from multiple angles in
two different socio-political environments.
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Design/methodology/approach - A survey was conducted among senior students in 34

countries with 109 thousand participants. Several influencing variables such as family
business background, motivation for self-employment, university environment and family
business performance were defined. The utilized multinomial logistic regression with
categorical three-dimensional independent variable is used which allows to capture the
complexity of an individual’s approach to career choice intention taking into consideration a
family business performance, personal motives for self-employment and university support
for entrepreneurship.
Findings - All hypotheses include succession intention as a central category. There is
significant correlation between friendly and supportive environment for entrepreneurship at
university and the successor’s career choice. Performing family business is positively
connected with the succession preference compared to the other two career alternatives. In the
market economy group, students, which attended at least one entrepreneurial course exhibit a
significant preference for succession compared to employment. Male students are more likely
to choose succession career than employment and founding a new own venture than
succession. Students with family business background exhibit significant preference towards
succession.
Originality/value - Some EU countries have common denominator of almost fifty years of
communist regime experience, which broke the entrepreneurial tradition and for a couple of
decades prolonged the development the market economy. The value of the study is in the
model comparison of transition and market based economies in EU.

Introduction

Motives of entrepreneurs and career choice of individuals are very frequently investigated in
contemporary business-related research. Several studies explore student’s career choice
intentions after their graduation. We know that beliefs about an object are determined by
attitude towards that object (Ajzen and Fishbein, 1980). Personal characteristics and
 emotional attitudes, that influence the decision an individual will choose regarding his/her
career are identified. Kolvereid (1980) detected eleven relevant motives considered when self-
employment option is weighted to employment. De Massis et al. (2009) suggested that lack of
successor's motivation was one of the most significant reasons for an unsuccessful transition.
However, there is a gap for some deeper understanding of career choice intentions of family
business successors (Agarwal et al., 2016), which are traditionally believed to be in most
cases expected to join their parents’ business and to eventually take it.

Those are very important and often very hard decisions. When successors are discussed, one
usually brings in mind young individuals, who were born into family businesses, facing
important decisions with usually life-time consequences during or immediately after their
studies. The family business in-borns have, on the contrary to their mates, who have not
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experienced the baggage of family businesses, three options. They can (1) find a job and
become employees or (2) start their own business or (3) join their family business and take it
over. The purpose of this paper is to build a multilevel regression model and to test it in
different social and political environments.

Business performance is a generally accepted indicator for the effectiveness of business

succession. Several studies covered the issue of post-succession firm performance while there
is a lack of research, which correlates pre-performance and succession intentions (Bocatto et
al., 2010). It is known that family members’ positive perception of business performance
positively affects the long-term survival of family business (Olson et al., 2003) but can
negatively influence manager's willingness to further development (Zahra, 2005). In this
paper we investigate how student perception of family business performance affects his or
hers career choice.

Turker (2005) confirmed the impact of internal factors (motivation and self-confidence) and
external factors (education, opportunities, and support) on student’s entrepreneurial
propensity. There is a call upon entrepreneurship researchers to analyze entrepreneurial
processes in social practice theory context (Gartner et al., 2016), covering the relationship
between individuals and their greater environment which shape individuals perceptions,
interpretations and actions within the world (Hargreaves, 2011). We are targeting this gap
analyzing university surrounding as one of the factors in two separate groups: transition and
market economies.

Given the worldwide relevance and proved economic and social importance of family
businesses, understanding entrepreneurial motives among students, which are possible
successors, is of tremendous importance for provision of long-term stability and sustainability
of the family business sector. Aiming first to address this challenging topic, a research
covering countries in Western Europe and Hungary was carried out (Zellweger et al., 2011) to
fill identified research gap by investigating the different determinants of career choice
intentions of students based and influenced by the family business background. Besides
 confirming that psychological factors like self-efficacy and locus of control have significant
influence on career decision of antecedents, they also showed that geography affects behavior
when speaking about the subject. In 2013 a new study was organized (GUESSS) with more
countries participating. Among them, several countries, although not specifically addressed by
the study, may be regarded as “transitional”, i.e. they experienced a huge shift in their
understanding and developments of market economy mechanisms in the last couple of
decades after the vast political changes in the beginning of 1990’s.

This particular study has the clear ambition to utilize the research methodology to obtain a
comparison of findings taking into account the paradigm of different time horizon of the
market economy experience by the study participants. Namely, some of the participating
countries in this particular study have common denominator of almost fifty years of
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communist regime experience, which, among others, broke the entrepreneurial tradition and
prolonged the development the market economy for a couple of decades. Studies have already
confirmed that family firms in formerly planned economies in Europe may differ from
traditional western type of market economy and additional research is needed particularly in
the developing countries (Agarwal et al., 2016). Bau et al. (2013) also suggests that increased
attention should be given to the subject since new finding would contribute some
understanding into succession research. The aim of the analysis of the research results is to
provide mutual benchmarking of the results to show the differences between market
economies and transition economies, which may influence different attitudes of the students
regarding their career versus entrepreneurial ambitions. The main purpose of the research is to
provide an insight into the motives of potential successors for their career decisions
influenced by traditional market economy values and virtues framework. Moreover, it
provides a new context of understanding the family business dynamics in the transition
process to family business founders, guidance counselors and educational organizations
responsible for facilitating the process of transition between generations of the family
business with the emphasis on the transition economy peculiarities.

Assuming, that there are several historically driven differences between market and
transitional economies it may be speculated, that this fact could influence young generation
and their perception of family business and general understanding of entrepreneurship
processes. Transition economies face important differences in the three dimensions
(regulatory, cognitive, and normative), reflecting their idiosyncratic cultural norms and
values, traditions and institutional heritage in promoting entrepreneurship (Manolova et al.,
2008). The impact of entrepreneurial parents and grandparents on the offspring is not alike in
all regions and the influences are particularly strong in high in-group collectivism cultures
(Laspita et al., 2012) which was the source of the motivation to study separately the
transitional economies from CEE European region and economies with longer capitalistic
tradition in market economy.
 Our research is designed as a multilevel study testing a model, which includes three levels of
analysis: individual (motivation for self-employment), firm (family business performance)
and environment (university support) focusing on students who are still studying (Agarwal et
al., 2016). The model is tested on two geographically and politically different target groups
originating from the same data source (GUESSS 2013/2014) with the goal of providing
mutual benchmarking since we know that country context affects behavior (Zellweger et al.,
2011; Agarwal et al., 2016)

Theoretical background and hypotheses development

Students with family business background

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One of the most significant challenges to enduring family business is the process of passing
the management and ownership of a firm to next generation (Blumentritt et al., 2012). Family
enterprises face specific challenges in the attempt to attract and retain a motivated heir
(Neubauer and Lank, 2016). To this point, researchers have noted a range of factors that
influence the transition process (De Massis et al., 2009; Brockhaus, 2004; Schröder et al.,
2011; Lam, 2011; Neubauer and Lank, 2016), yet this field is still emerging. Growing up in a
family where parents are engaged in a family business usually as simultaneous managers and
owners, creates a particular environment for potential successors in which career decisions
have to be made. However, family business ownership affects future generations in many
ways aside from the issue of succession. As a result, individuals with prior family business
experience may incorporate their experience, so that their attitudes and behaviours towards
entrepreneurial action are shaped positively or negatively towards business ownership (Carr
and Sequeira, 2007).

Students with family business background are facing a particular trilemma when facing a
career decision in comparison with their classmates, who would mostly consider seeking for a
job and, perhaps at some later time start to think about establishing their own businesses. On
the other hand, in-borns in family businesses would instead of deciding between the career of
an entrepreneur or an employee, choose to accept the role of a family business successor.
However, this option may appear to be an opportunity or a burden (Schröder et al., 2011). An
individual’s preference for one of three choices is likely to be influenced by several factors
such as personal motives for self-employment, gender, family structure, number of siblings,
social surroundings, etc. Taking responsibility for family business does include some
limitations. Potential successor has to work closely with other family members and in the
beginning stays in the traditional industry and strategy of the family business. On the other
hand, a new start-up allows an individual to choose the area of interest but also requires more
entrepreneurial abilities (Schröder et al., 2011). Next generation family members struggle
hard to make the right career choice as they are torn between helping the family and pursuing
the career, which would be their first preference (Murphy and Lambrechts, 2015).
 Various factors influence career choice intention. According to Dyer (1994) there are three
factors influencing career choice: Individual (demographic, psychological), social (e.g. family
support, culture) and economic (e.g. employment opportunities, networks). Douglas (2002)
points out that individuals consider risk, independence and income. Self-employment
intention is positively related to positive risk attitudes and independence motive. Three key
factors that together affect succession are: founder, successor and environment. Only the
presence of all three factors would assure and encompass family business continuity (Lucky et
al., 2011). Turker et al. (2005) considered the impact of internal factors (motivation and self-
confidence) and external factors (perceived level of education, opportunities, and support) on
student’s entrepreneurial propensity (Turker et al., 2005).

Generally, it is more accurate to consider various factors when explaining phenomenon in

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social sciences rather than focusing on a single item (Turker and Selcuk, 2009). Thus, the aim
of this study is to explain the heir’s career intention with a research construct which includes
individual self-employment motivation, attended university social environment and perceived
business opportunity based on the family firm performance prior to succession. Considering
that there is a lack of consideration about how economic, demographic and institutional
variations shape the succession process (Baù et al., 2013), we are exploring two different
macroeconomic environments.

Motivation for self-employment

Entrepreneurial start-up motives have extensively attracted researchers’ interest (Ajzen and
Fishbein, 1980; Kolvereid, 1996; Carter et al., 2003; Schröder et al., 2011) for many decades.
Several studies confirmed that beliefs about an object are determined by attitude towards that
object (Ajzen and Fishbein, 1980). In our case the “object” is self-employment. Students,
potential successors, can achieve the “object” by creating a new start-up or by accepting the
role of the successor. Motivation for self-employment plays an important role in both
situations. Kolvereid (1980) shows, four most influential are: autonomy, challenge, authority
and self-realization. Moreover, the economic opportunity is revealed to be an important
factor, too. In the specific case of family business, this item is addressed in following sections
of the paper by measuring the influence of family firm success on the career choice.

Lack of motivation and low ability of the successor to manage the family business are
important individual factors which prevent family business succession (Lockamy III et al.,
2016). Researches also call for examination of heir's motivation for succession since it is
usually the only job offered to them before graduation (Neubauer and Lank, 2016).

We are focused on the potential heir career choice, which can actualize self-employment
intention as an entrepreneur (founder) or a business successor. In this part of our study we are
targeting the heirs intention on the individual level since the individual (the heir) is at the
centre of the succession process (Agarwal et al., 2016). Based on some previous research
 (Zellweger et al., 2011; Vadnjal and Ljubotina, 2016), which is also used for the benchmark
in the hypotheses, the assumption is adopted that students will prefer new start-up to the
succession and succession to the employment.

H1: Higher level of motivation for self-employment results in preferring founding own
business to the succession and succession to the employment.

University environment

Environmental impacts have a major impact on entrepreneurial process (Brockhaus and

Horwitz, 1986). Individuals would not decide to start a business, which is not embedded into
environment. They consult their environment and they are influenced by others (Aldrich and
Zimmer, 1986). Other researchers also recognized that individuals do not exist in a social
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vacuum and that in some cases cognitive factors (as motivational factors) are surpassed by
surrounding context (Hargreaves, 2011).

Study among Singapore students suggests that family business experience as well as formal
education level may be significant factors in explaining entrepreneurial interest (Wang and
Wong, 2004). Turker (2008) adds two significant predictors of entrepreneurial intention, one
of which is supportive university environment. If university provides knowledge and
inspiration for entrepreneurship, the possibility for choosing an entrepreneurial career will
increase (Turker and Selcuk, 2009).

University environment plays an important role in student’s life during a very sensitive life
span when a career decision is expected to be made. Personality traits are not isolated from
cultural, social, economic demographical and technology factors which create the
surroundings (Turker and Selcuk, 2009). A survey among students from four different
countries revealed that the career preferences are influenced by the reputation of
entrepreneurship and the support received from the university (Autio et al., 1997).
Furthermore, university studies can have positive effect on entrepreneurship in the sense of
economic growth which is instantly required in the modern world. Baumol (1968) is
convinced that encouragement of the entrepreneur is the key to the stimulus of economic
growth. Cultural and institutional frameworks affect entrepreneurship (Wennekers and
Thurik, 1999). Courses offered by the university influences student's career choice, so
universities may be potential source of entrepreneurs (Turker and Selcuk, 2009). Other studies
report that there is also a lack of understanding how universities can effectively raise future
entrepreneurs (Lüthje and Franke, 2003). According to Hisrich (1990) people can be pushed
or pulled by the situational factors, which are related with personal background and present
life of an individual. Most people are likely to start a new business between the age of 25 and
44 (Liles, 1974) so it is important to focus on younger students. In this manner, our paper has
an ambition to contribute to the research field by narrowing the focus to potential family
 business successors’ trilemma, which includes the possibility of taking over the family
business.

H2: The more positive student's perception of the university support for entrepreneurial
attitude and behaviour, the stronger the individual's preference for a founding career to
succession and succession to employment.

Family business performance

The influence of succession on family business’ post-succession performance has been

investigated on several occasions (Eddleston et al., 2008; Habbershon et al., 2003; Olson et
al., 2003; Wang et al., 2004; Williams Jr., 2015). On the other hand, there are not that many
research trials to investigate the relationship between pre-performance and succession
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(Bocatto et al., 2010).

In entrepreneurial families, long-term vision of generating family wealth drives

entrepreneurial activities of family members towards sustainable growth of that wealth
(Habbershon et al., 2003). Family business performance may be understood as a measure of
long-term stability for an individual. Family member’s positive perception of the family
business (as a successful performer) affects the long-term survival of family business (Olson
et al., 2003). Parents, successful entrepreneurs as role models can encourage heir for
entrepreneurial career choice (Chlosta et al., 2012).

Better firm’s performance will not necessarily lead to the appointment of a family member to
top management positions (Smith and Amoako-Adu, 1999). Similarly, prior corporate
performance is not significantly related to the likelihood of nominating a family successor
(Bocatto et al., 2010). Successful past performance may even negatively influence manager’s
willingness to pursue entrepreneurial activities (Zahra, 2005). Consequently, succession can
be considered as an entrepreneurial activity.

To our knowledge, few pieces of research on heir’s perception of a good business

performance and its influence on career choice have been done so far. Generally, many
researchers agree that business performance is a valid indicator for the effectiveness of
business succession (Morris et al., 1997). Despite the fact that businesses and families are two
distinctive social entities, research findings show that they are interrelated inside a family
business. Subjective perception of business success can affect family’s resources, trigger
transitions or change family member’s norms, attitudes and values (Aldrich and Cliff, 2003).
Olson (2003) finds that family members are more likely to be engaged in the more successful
family businesses. Business problems, such as cash flow management, can significantly and
negatively affect the functional integrity of the family (Olson et al., 2003). On the other hand,
some recent researches haven’t proved any significant correlation between the perceived
 positive family firm performance and incumbent’s attitude towards succession (De Massis et
al., 2016). Based on these different findings we try to investigate the problem more in detail.

H3: The more positive heir’s perception of family business performance, the stronger the
individual's preference for a business-founding career to succession and succession to
employment.

Methods

Participants and procedures

Our analyses is based on GUESSS 2013 set of data which partly covers the issue of family
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business succession. The complete data set contains more than 109.000 student respondents
from universities in 34 countries. The identification-based survey, which prevented multiple
responses, was conducted using the on-line questionnaire from September 2013 till February
2014. The survey allowed students to stay anonymous.

For the purpose of this paper, 23.485 European students with family business background
were divided into two groups, which are analysed separately. There were 5.964 respondents
from five European countries, which are regarded as transition economies, while in the group
with longer market economy tradition there were 17.521 respondents from 13 different
European countries.

Transition countries are in the process of transformation from socialism to capitalism and
from central planned to market economy (Bezemer, 2006). Today, transitional countries are in
different phases of socio-economic development. However, they do share a common past
behaviour patterns as socialist countries with centrally planned economies. Transition process
implies a move towards a market economy. In majority of European countries, it started
between 1989 and 1992. Poland, Slovenia and Hungary as a part of central and eastern
European economies have been performing best during transition process. One of the reasons
for that may lay in their relative proximity to Western Europe (Bezemer, 2006).

For the purpose of this particular paper Slovenia, Romania, Poland, Estonia and Hungary are
classified as transition economies in accordance with International Monetary Fund
classification (Roaf et al., 2014). The market economy country group consists of: Great
Britain, Germany, Luxemburg, Netherlands, Switzerland, Austria, Belgium, Denmark, Spain,
Finland, France, Italy and Portugal. Due to the context of the business environment which
differs greatly among developing and developed countries it may be expected that this is
reflected in differences in individual’s entrepreneurial intentions between developing and
developed countries (Iakovleva et al., 2011).
 There are several definitions of family business. In this paper, we apply the definition that a
family business is where majority share is owned by one or more members of the same family
(Barnes and Hershon, 1976). For this reason, our analysis includes only students with at least
one self-employed parent or both parents who are majority stakeholders and thus are primary
decision makers. Students, who already have their own companies, were excluded. That
allows us to have a prospective view and avoid survivor bias from which retrospective studies
might have suffered in cases like interviewing entrepreneurs about their motives after they
already started a business (Gartner, 1989; Davidsson, 2004). After the data reduction, the two
data sets were created: “Transition” containing 3.979 respondents and “Market” with 6.617
respondents. Descriptive statistics of the two samples is presented in table 1. The two samples
are comparable. There is a certain difference in average time of family business ownership,
which could be explained with the fact that transition in Europe only got place in 1990, which
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gives a 25-year time span for new businesses to develop.

TABLE 1: Sample descriptives

Our samples are additionally described in table 2. Gender structure is very similar in both
samples. In “Market” group there are 8,8% more students with regular jobs next to their
studies while in transition countries much more students attended at least one course on
entrepreneurship. 51,9% of the respondents in transition group and 46,3% respondents in
market group already had some working experience in their family businesses.

TABLE 2: Frequencies

Considering, that the independent variable is categorical with three possible dimensions,
multinomial logistic regression for data analysis is used. Multivariate analysis allows us to
capture the complexity of an individual’s approach to career choice intention taking into
consideration a family business performance, personal motives for self-employment and
university support for entrepreneurship. All hypotheses have succession intention as a central
category. For this reason, it is used as a reference category for interpreting the regression
results. Methods used in this paper have been previously used for investigating similar
research questions (Zellweger et al., 2011; Vadnjal and Ljubotina, 2016).

Measures

Dependent variable
Our dependant variable is categorical with three possible dimensions: (1) “employee”, (2)
“entrepreneur” or (3) “successor”. Students were asked about their career decision after their
studies and five years after that. With the second question, the time span was limited to a
maximum of five years after the studies according to Brockhaus & Horwitz (1986)
observation that typical entrepreneur work elsewhere before starting the business. We added
the option to choose the answer “I don’t know yet” which allowed to exclude undecided
 students from the research and to avoid forced decisions, which could also result with biased
results.

Independent variables
There are three independent variables: motivation for self-employment, university
surrounding and family business success. The multi-item independent variables are measured
using seven-point Likert scale.

Motivation for self-employment as an independent influencing factor is adequately covered in

some earlier pieces of research (Kolvereid, 1996; Souitaris et al., 2007). Motivational factors,
which further influence the behaviour, are assumed to be captured by intentions (Kolvereid,
1996). They indicate how hard are people willing to try in order to perform a certain type of
behaviour (Ajzen, 1991). Motivation for self-employment is measured using four factors, for
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which Kolverid (1996) found out to be importantly influential. Those factors are: (1) authority
(two items: “to have power to make decisions” and “to have authority”), (2) autonomy (three
items: “freedom”, “independence” and “to be your own boss”), (3) challenge (two items: “to
have a challenging job” and “to have an exciting job”) and, (4) self-realization (three items:
“to realize your dream”, “to create something” and “to take advantage of your creative
needs”). Students were asked to evaluate the importance of each item on the Likert scale from
1 (not important at all) to 7 (very important). Cronbach’s alpha reached 0,742 in transition
group and 0,683 in market group which is above minimum value of 0,6 (Hair et al., 2010).

The student’s perception of university climate towards entrepreneurship is measured with

three items derived from previous studies (Lüthje and Franke, 2011; Geissler et al., 2010).
Those were: “The atmosphere at my university inspires me to develop ideas for new
businesses”, “There is a favourable climate for becoming an entrepreneur at my university”
and “At my university, students are encouraged to engage in entrepreneurial activities”.
Students rated all three measures on seven-point Likert scale. Cronbach alpha was 0,884 in
transition group and 0,882 in market group.

In order to measure student’s perception of family business performance, they were asked to
evaluate the firm’s performance compared to competitors over the last three years considering
five factors (Likert items): sales growth, market share growth, profit growth, job creation and
innovativeness (Eddleston et al., 2008; Dess and Robinson, 1984). For each of the items
seven-point scale ranging from 1 (worse) to 7 (better) is used. Calculated Cronbach’s alpha
values were 0,879 in transition and 0,861 in market group.

Control variables
In addition to independent variables several control variables are included such as: gender,
study performance, attitude towards risk, years of ownership of family firm, student regular
employment next to study, attendance of entrepreneurship courses and past experience of
working in family firm.
 According to some previous research, women are likely to be disadvantaged as successors
(Schröder et al., 2011). According to Zellweger et al. (2011) women also have higher
likelihood to choose employment before succession. Student’s self-assessment of his/her
study performance is included, since it could be a proxy for individual’s perception of
potential possibilities, he might have on the market as an employee. Students were asked to
evaluate their average performance from 1 (far below average) to 7 (far above average).
Duration of family firm ownership is included in the model as a control variable from similar
reasons: it might influence the offspring’s perception of family business stability and value
(Zellweger et al., 2012).

Uncertainty and risk are an important part of every economic decision. It is fundamentally
important to understand individual’s attitude towards risks for predicting economic behaviour
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(Dohmen et al., 2011). Risk attitude explains individual’s interpretation of risk content, and
how much he likes or dislikes risk (Pennings and Wansink, 2004). Students were asked to
evaluate the level of agreement with the following statement:” I am generally a person who is
fully prepared to take risks”, from 1 (absolutely disagree) to 7 (absolutely agree).

We asked the respondents if they had a regular job next to their studies, if they attended
courses of entrepreneurship and if they have already been working for family firm. These
questions are included in the control model as two-dimensional dummy variables (Yes/No).

Validity
Variance inflation factor for all the independent variables is close to 1 and does not exceed 1,1
for any variable which means that multicollinearity does not appear to be a problem since it is
considerably lower than the marginal value of 10,0 (Hair et al., 2010). Harman’s single-factor
test confirmed the variables were empirically distinct. One factor solution accounted for
31,69% of total variance in the transition group and 29,84% in the market group. Exploratory
factor analysis was conducted on both sets of data. It revealed that all items uniquely load on
their respective factors with factor loadings greater than 0,59 in the market group and 0,66 in
the transition group. The extracted factors correlation matrix shows that all correlations are
bellow or at least equal to 0,173.

TABLE 3: Pearson correlations in both groups

We use a set of control variables for further mitigation of potential common method bias
problem. Respondents were assured strict confidentiality to avoid the influence of social
desirability concerns (Podsakoff et al., 2003). Pearson’s correlations between the variables are
displayed in table 3.
 Results

Results of the regression model are shown in table 4. For each group a model is constructed,
which includes only control variables B (cont) and a model with control and independent
variables B (all). The reference category is offspring’s succession intention.

TABLE 4: Regression models

Motivation for self-employment is positively and significantly related to preferring succession

career compared to employment in both groups However, there is a significant difference
between groups in coefficients. Market group exhibits an intense relation (B= -0,716;
p=0,029) compared to transition group (B= -0,197; p<0,001). This result partly confirms the
hypothesis H1. When comparing founding to succession intention the results show a positive
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correlation between motivation for self-employment and succession preference in both groups
which argues against the validity of the hypothesis H1. Considering that results are not
significant in this part the hypothesis H1 cannot be completely confirmed. However, we can
say that our results confirm that family firms in western economies differ from family firms in
formerly planned economies in transition.

Our findings show that there is no statistically significant correlation between friendly and
supportive environment for entrepreneurship at university and the offspring career choice in
neither direction. Thus, the hypothesis H2 is rejected.

Good family business performance is positively correlated with the succession preference to
the other two career alternatives (employment and founding). Both groups exhibit similar
intentions. In the transition group a moderately powerful relation is detected in the sense of
preferring succession to employment (transition B= -0,236; market B= -0,156). Similarly, a
more powerful relation is found between succession and founder intention in the transition
group (B= -0,209) comparing to market group where no significant relation was identified.
The hypothesis H3 may only partly be confirmed.

Study performance positively and significantly influences career choice intention in the sense
of preferring employment to succession in market group and founding to succession in
transition group. As expected, risk attitude is significantly influencing career choice
preference in both groups where a positive and significant correlation between risk attitude
and succession to employment preference is detected, as well as founding to succession
preference. The time period a business has been owned by a family does not have a noticeable
impact on offspring career choice intention in neither group.

Considering gender, we found, that men compared to women are more likely to choose
succession career than employment and founding than succession. However, the analysis did
not give us significant results in this part. There was no significant correlation revealed
 between having a regular job and career choice intention in transition group while the market
group did exhibit a significant and very positive relation in preferring both alternatives to
family business succession.

When comparing the influence of entrepreneurial courses on student’s career choice, an

important difference is noted. In the market group students, which attended at least one
entrepreneurial course exhibit a significant preference for succession compared to
employment (B=-0,328; p=0,031) while the transition group has an opposite result (B=0,223;
p=0,117). Similar but opposite results were found in preferring founding career to succession
(market B=-0,178; p=0,462; transition B=0,086; p=0,608).

Our research confirmed expected correlation between offspring’s experience in a family firm
(past employment) and career choice intention. Students with family business background,
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which were already actively involved in a family business operations exhibit significant
preference toward succession compared to both other alternatives. Correlations are noticeably
higher in transition group.

Discussion and implications

Implications for the literature

Our paper contributes to better understanding of career decision trilemma experienced by

students with family business background. The influence of motivation for self-employment,
university environment and family business performance on the offspring’s career decision
process was explored in two separate groups of students with the aim of exposing differences
between the two. This study adds to family business literature on succession and better
understanding of the decision-making processes connected to the career decision making.

Our findings show that higher motivation for self-employment leads to succession as a career
choice in market economy group as well as in transition countries, which matches previous
finding (De Massis et al., 2009). A more intensive relation is detected in market-based
economies. There may be several possible explanations for that. It is assumed that longer
entrepreneurial tradition could represent an important reason. In transition countries, family
firms as well as entrepreneurial environment itself are much younger. Planned economies
were overwhelmed by large, mostly state-owned firms. Small and medium sized, private-
owned firms, which are dominant in market economies, were almost non-existent.
Consequently, entrepreneurship is greatly underestimated and underdeveloped in transition
economies where there is also a common belief that setting up a business is more risky due to
extensive economy reforms (McMillan and Woodruff, 2002). Lack of formal institution in
transition countries needs to be eliminated in one way or another. Due to relatively short
entrepreneurial history, transition economies offer fewer possibilities opportunities for
 succession, which could possibly be one of the reasons for detected results variation between
the two target groups. All of these confirm that in formerly planned economies family firms
differ from ones running in traditional market economies as stated by Agarwal et al. (2016).

In the model, no significant influence of supportive university environment for

entrepreneurship on career decision in case of students with family business background was
found. Previous studies resulted in a positive relation between supportive environment with
entrepreneurial programs and student's entrepreneurial intention (Turker et al., 2005; Wang et
al., 2004). Autio et al. (1997) also suggested that career preferences are influenced by the
reputation of entrepreneurship and the support received from university. However, our model
is different since it is focused on the students with family business background. They have a
different problem on the first place (a trilemma) and, on the second, they are exposed to
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different environments including family. We believe that this problem calls for further in
depth studies of the field.

We detected a significant influence of perceived family business performance on potential

successor’s career choice. The more successful family business the higher the probability for
succession career choice compared with employment and founding alternatives. This finding
confirms the existing knowledge (Chlosta et al., 2012; Olson et al., 2003). Aldrich and Cliff
(2003) also reported that subjective perception of family business success can affect family
member's attitudes. Some recent researches however didn't confirm a correlation between
perceived previous performance and heir's attitude towards succession (De Massis et al.,
2016) which calls for additional scientific work on the matter. Students from transition
countries are more sensitive to family business success. It is speculated, that the reason for
this lies in the situation described in previous paragraph. Considering that entrepreneurial
environment in transition countries is less favourable, family firm stability and success plays
an important role in sense of offspring’s career choice. Higher level of poverty in transition
countries additionally exposes the importance of family business performance for the
successor’s future (Bezemer, 2006). In the market-based economies, potential successor has
more possibilities for improvements in case of succession.

Having a regular job parallel with studies is an important factor for students in market-based
economies. Offspring from family with family business will prefer both alternatives to
succession of the family firm. Since correlations are much more positive and significant, it is
presumed that having experience as an employee represents a strong independence motive. In
transition countries students with regular employment prefer employment to succession,
however they do not distinguish between other two alternatives (succession compared to
founding intention). The reason why they do not see the difference may lie in the fact that
entrepreneurship is a young discipline in transition regions, which does not yet allow
offspring with employment preference to clearly distinguish between family firm and a new
start-up.
 We confirmed that positive risk attitude results with founding preference over succession and
succession over employment in both regions. This finding is consistent with the existing
knowledge (Douglas and Shepherd, 2002; Lucky, Minai and Isaiah, 2011).

Our findings clearly indicate the significant difference between the two economy groups
observed. This confirms results of previous studies which exposed the specific nature of
transition economy which faces important regulatory, cognitive and normative differences
(Manolova, Eunni and Gyoshev, 2008). Our multilevel model additionally explains
relationship between individual's perceptions of their greater environment and actions as was
previously exposed by Hargreaves (2011) and Turker (2005) in their works.

Practical implications
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Present study confirms the importance of heir's self-employment motivation for successful
family business succession. It is important to work on it on all levels during the early stages of
adolescence. Since variations were detected between market-based and transition economies
we expect that governments in transition economies can also contribute to stronger self-
employment motivation.

Parents have a great responsibility in a sense of playing a positive role model as an

entrepreneur. Our study implies that parent's role in succession process is complex and very
important. However, it cannot be isolated from socio-economic environment, which is in case
of students greatly shaped by university. Since offspring are more exposed to changes in
transition economies, special attention with the aim of successful family business transition is
needed. Parents should create a positive, entrepreneurial friendly environment in the family
firm and in the family. Special care Particular attention should be taken in the sense of always
giving positive information and speaking about solutions (positive performance) and not only
problems in front of children. Governments in transition countries should take special care
about creating a positive entrepreneurial environment since motivation for self-employment
does imply a successful family business transition. There are several fields of activities, which
should be covered to raise the confidence level in entrepreneurial opportunities and family
firms. These activities surely include fighting against corruption, which as suspected, is an
important issue in influencing the results in transition regions.

Having experience in family firm results with succession preference in both regions. This
result is expected. Again, parents should include their children in family business as soon as
possible. The transfer of knowledge and successor training for top management positions are
key processes in guaranteeing the continuity of the family business (Duh, 2014). This is
especially important in terms of encouraging succession for regions in transition.

Higher self-assessed study performance leads towards the employment preference before
succession and succession before founding an own new business in market economies. Since
 correlation between succession and founding intention is weak and not significant, it can be
concluded, that better study performance is positively related to employment career. This may
be explained in the context of growing competition in the labour markets in the developed
economies where there is certain number of preferred employers, which are very demanding
in their recruiting practices. Thus, they usually find the study success to be very important
criteria in the judgements on candidates. On the other hand, this state of the art of the labour
market especially for higher educated labour force gives students perceptions that established
employers give provision of perceived more attractive career opportunities comparing to
struggling founding own start-ups. On the other hand, successful students in transition
countries prefer a new start-up to succession but the correlation between employment and
succession intention is weak and not significant, which may lead to an opposite conclusion
but one should be aware of too early assumptions and conclusions.
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Courses in entrepreneurship contribute to succession intentions in the countries with

developed market economies. Students, which attended at least one course covering
entrepreneurship or other business related content, do have intentions to take over the family
firm when the time comes. They prefer this choice to both given alternatives. This result
finding is expected since a solid management education is an important factor for family
business transition (Neubauer and Lank, 2016). On the other hand, students from transition
regions with at least one entrepreneurial or business course taken in their formal education
process tend to prefer employment career. It could lead us to the conclusion that learning
about entrepreneurship makes them more insecure in their given social and political
environment.

Limitations of the study

In this paper, perceived factors are studied, when analyzing the entrepreneurially supportive
university environment and family business performance. Obtaining actual measures from
other sources (university curriculum, actual business performance measures) would offer
more insides. However, it also may raise the level of problem complexity. Still, the
responders are deeply embedded into the problem, since they are family members and
potential family business heirs. It should also be underpinned that behavioural intentions were
investigated and not actual behaviour. In general, this approach and its predictive value are
supported by valid behavioural theory (Ajzen and Fishbein, 1980; Ajzen, 1991). For the
purpose of this study, the GUESSS source, which provides cross-sectional data was utilized.
Consequently, it seems to be impossible to draw conclusions related to causality, which could
generate potential shifts of intentions.

Our study is limited by the fact that the access to a job in a non-family firm as an influential
factor was excluded from the research. Family business succession is more or less expected,
so it provides an almost guaranteed alternative in less developed regions. It is presumed that
formal entry requirements could have an effect on heir’s career choice. Nevertheless, we
 believe that we partly managed to cover this question by analysing three career alternatives,
which are related to different degree of entrepreneurial involvement. The limitation was
empirically necessary since this research relays on data provided by GUESSS survey only.

The fact that some of the control variables emerged as significant, suggest further studies with
higher level of complexity model-wise. Risk attitude deserves special attention and should be
analysed in combination with perceived risk. Previous employment in family firm has a
highly significant influence on heir’s career choice as well.

Future research

Entrepreneurial supportive university environment and its influence on students, potential

heirs in family businesses should be further investigated. It is a rather specific group with
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specific trilemma kind of problem when speaking about career decision. Our results differ
from some previous findings, so further research is necessary to fill in the gaps we detected.

Our findings may confirm that in transition economies, the situation in labour force markets is
quite different from one ruling in the market economies and job opportunities in existing
established companies may be more dependent on personal networks, political connections
and corruptions. So, better students not fulfilling other criteria may think that being a good
student simply does not pay off. Thus, in our opinion, future detailed investigation of this
question would be necessary.

Our risk attitude control variable confirmed previous studies in both regions (Bonin et al.,
2007; Brockhaus, 2004; Dohmen et al., 2011; Caliendo et al., 2009). We detected slightly
higher positive correlation between risk attitude and founding preference before succession in
market based economy group. We can not be speculated about reasons, due to the fact, that
we used only a basic risk attitude question, which is based on self-assessment. Further
research would be necessary with the purpose of explaining the difference between the two
groups.

Based on the results compiled with the control variables we call on further research to include
more contextual factors in modelling the career choice of family business potential heirs. This
paper shows that comparative studies may provide more insights and enrich the knowledge
about family business succession processes in different environments. Future research
attempts may also be launched as a replication based on country level and more detailed
socio-political environment context.

Conclusion

Students with family business background are expected to make their career choice after the
studies. They are usually expected to succeed the family business and their intentions are
 disregarded in most cases. This paper contributes to better understanding the motives for self-
employment and other factors which shape student's career choice in different socio-political
environments. The narrow scientific field is recently gaining attention since the importance of
family business continuity for modern economies is growing. Our findings also provide an
inside into differences between market economies and regions which are still under the strong
influence of previous centrally planned economy and recent transition process.

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 Descriptive sample statistics Transition Market
Mean S.D. Mean S.D.
age 22.20 3.35 23.00 3.65
motivation for self-employment 5.56 0.87 5.38 0.82
university support 4.11 1.55 3.91 1.51
attitude towards risk 4.81 1.54 4.57 1.47
years of family business ownership 14.77 12.24 19.20 13.21
family business performance 4.07 1.55 3.97 1.48
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 Sample groups frequencies Transition Market
Gender
mail 37.1 39.6
femail 62.9 60.4
Already employed
yes 29.6 38.4
no 70.4 61.6
Attended courses on entrepreneurship
yes 66.3 27.1
no 33.7 72.9
Already been working in family firm
yes 51.9 46.3
no 48.1 53.7
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 Transition - Correlations
gender employ- study att. Ent. risk years of worked motivat. universi- FB
ment perform courses attitude owners. in FB ty perform
. .
gender 1.000
employed -0.015 1
study performance 0.081 ** -0.018 1
att. Ent. courses 0.024 0.030 -0.063 ** 1
risk attitude -0.081 ** -0.024 0.030 -0.105 ** 1
years of ownership -0.014 -0.008 0.027 -0.014 0.012 1
worked in FB 0.169 ** 0.017 0.061 ** 0.076 ** -0.094 ** -0.095 ** 1
motivation 0.036 * -0.064 ** 0.080 ** -0.029 0.289 ** 0.039 * -0.034 * 1
university -0.001 0.015 0.120 ** -0.201 ** 0.216 ** -0.021 -0.046 ** 0.170 ** 1
FB performance 0.010 0.002 0.021 -0.054 ** 0.198 ** -0.010 -0.169 ** 0.144 ** 0.173 ** 1
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Market - Correlations
gender employ- study att. Ent. risk years of worked motivat. universi- FB
ed perform courses attitude owners. in FB ty perform
. .
gender 1
employed -0.030 * 1
study performance 0.020 0.014 1
att. Ent. courses 0.065 ** 0.002 -0.061 ** 1
risk attitude -0.128 ** 0.018 0.072 ** -0.104 ** 1
years of ownership -0.034 ** -0.015 0.000 -0.006 0.020 1
worked in FB 0.098 ** 0.127 ** 0.022 0.022 -0.064 ** -0.114 ** 1
motivation 0.003 0.040 ** 0.104 ** -0.065 ** 0.318 ** 0.011 0.015 1
university -0.023 0.049 ** 0.099 ** -0.164 ** 0.162 ** -0.043 ** -0.007 0.183 ** 1
FB performance -0.006 -0.026 * 0.038 ** -0.039 ** 0.129 ** -0.035 ** -0.131 ** 0.114 ** 0.118 ** 1
*. Correlation is significant at the 0.05 level (2-tailed).
**. Correlation is significant at the 0.01 level (2-tailed).
 Model coeficients Transition Market
B (cont.) B (all) B (cont.) B (all)
Intercept 4.550 *** 6.245 *** 4.402 *** 8.093 ***
Study performance 0.025 0.060 0.142 * 0.165 *
attitude towards risk -0.266 *** -0.180 *** -0.291 *** -0.166 **
years of FB ownership -0.008 * -0.009 * -0.013 ** -0.013 ***
Employment

Gender (Mail, femail=redundant) -0.090 -0.145 -0.046 -0.095

Regular job next to study (yes, no=red.) 0.268 0.269 0.584 *** 0.572 ***
attended courses of entr. (yes, no=red.) 0.185 0.223 -0.332 * -0.328 *
been working for family firm (yes, no=red.) -1.495 *** -1.386 *** -0.419 ** -0.411 ***
Motivation for self-employment -0.197 * -0.716 ***
University - supportive environment -0.045 0.073
Family business performance -0.236 *** -0.156 **
Intercept 0.430 1.734 * -1.278 -0.168
Downloaded by Florida State University At 03:48 01 August 2017 (PT)

Study performance 0.149 * 0.182 * -0.090 -0.081

attitude towards risk 0.062 0.133 * 0.248 ** 0.280 **
years of FB ownership -0.006 -0.007 -0.008 -0.008
Gender (Mail, femail=redundant) 0.276 0.230 0.446 * 0.437
Founder

Regular job next to study (yes, no=red.) -0.029 -0.036 0.615 * 0.620 *
attended courses of entr. (yes, no=red.) 0.040 0.086 -0.168 -0.178
been working for family firm (yes, no=red.) -1.427 *** -1.330 *** -0.630 ** -0.638 **
Motivation for self-employment -0.121 -0.234
University - supportive environment -0.061 0.032
Family business performance -0.209 *** -0.020
Reference category = successor
* p < 0,05, **p < 0,01, ***p < 0,001