The impact of mentoring on stakeholder confidence in family-owned businesses

The training and development of future leaders in family-owned businesses has been identified in literature and research as a critical component in the future success of the organization. Due in part to smaller pools of potential candidates for leadership positions, family companies intending to maintain family control must place a high priority on equipping future leaders with the necessary leadership skill sets and business acumen.; One of the critical variables involved in a successful transition of leadership from one generation to the next is the legitimacy of the future leader as perceived by the stakeholders of the business. This legitimacy is bestowed through the confidence and support of the family members and key employees of the company. The research questions posed in this study were inspired by the objective to better understand the impact of mentoring upon the establishment of legitimacy for next generation leaders.; To investigate the posed questions, a thorough literature review was conducted in order to obtain an understanding of the current body of knowledge relevant to the study of mentoring in family firms. This review resulted in the identification of five points of focus upon which this study was based: (a) family business stakeholder's degree of experience with and exposure to the mentoring of future leaders; (b) the importance that the stakeholder assigns to mentoring relationships; (c) whether the role of the mentor is played by a family member or a non-family member; (d) the stakeholder's level of confidence in the future leaders of the company; and (e) the stakeholder's level of confidence in the future success of the company.; After developing the 26-item questionnaire used in this study, it was distributed to the members of 14 university-based family business forums. Of the five points of focus studied, statistically significant relationships were found in three areas: (a) a stakeholder's exposure to the mentoring of the future leaders is positively correlated with his or her confidence in both the future leaders of the company and the future success of the company; (b) the value assigned to mentoring by a family business stakeholder is positively correlated with his or her confidence in the future success of the company; and (c) a stakeholder's confidence in the future leaders of the company is positively correlated with his or her confidence in the future success of the company. These findings support the prescription for the use of mentoring in the development of future leaders in family businesses that was found in the literature...