An Analysis Of The Relationship Between Strategic Planning And Succession Planning In Family Businesses

With family businesses the most common organizational form in the world today,the handing down of family businesses from one generation to the next has attracted public attention.The successful handing down and continued development of family businesses can not only maintain family honor,but also bring great contributions to the world economy.Although many studies have shown that development strategies and succession mechanisms are indispensable for family businesses,in reality many family companies neglect the significance of these plans or fail in the implementation process for various reasons.Therefore,ensuring a successful succession and maintaining good business performance for family firms is a problem worth studying.This paper adopts a single,phenomenon-driven case study method.Taking Thailand Charoen Pokphand Group as the case study,this paper seeks to explore the relationship between development strategy and succession mechanism and attempts uncover the secret of the group in successfully developing itself and implementing a mechanism for succession,with the belief that the knowledge gleamed from this study can be applied to other family businesses.The research indicates that family businesses must first draw up a long-term development strategy.Thereafter,the family business must formulate a succession mechanism with the following components-the inheritance principle,the selection of successors,a training plan and an inheritance process,so as to successfully hand down the business beyond the third generation and get pass its development bottleneck.Significantly,the family businesses have to continuously adjust to the dynamics of internal and external conditions,work towards strategic transformation and innovation during the implementation of the two plans.This would enable it to achieve its desired succession outcome and maintain healthy development.