Effects of the Characteristics of the Succession Process on Organizational Performance of Family Business Firms: Moderating Effects of Strategic Human Resource Management

This study investigates the relationships between the characteristics of the succession process and organizational performance as well as the moderating roles of strategic HRM practices in these relationships. Data was collected from 256 successors and HR managers(128 for each) in South Korean family businesses where the succession process either had been completed or was currently underway around time of data collected and analyzed. Our results indicate that the provision of successor training is positively related to organizational performance, while the clarity of the incumbent's role after succession, communication of the decision regarding succession, and the incumbent's propensity to step aside are not significantly related to organizational performance. Further, our results confirm (a) the moderating effects of strategic staffing practices between communication of the decision regarding succession and organizational performance, and (b) the moderating effects of strategic staffing practices between the incumbent’s propensity to step aside and organizational performance. The theoretical and practical implications of these findings are discussed.