Farm owners’ reluctance to embrace family succession and the implications for extension: The case of family farms in New Zealand

Abstract

Purpose: Despite the benefits of early planning for business succession, and plan implementation, many owners/managers fail to act expeditiously. Factors such as a reluctance to accept ageing, a concern over the risks involved and inappropriate objectives may be causative. This research moves towards explaining this reluctance and, consequently, suggesting ways to reduce the problem. Design/approach/methodology: Using the literature outlining the variables associated with succession, a hypothesis using the Theory of Planned Behaviour (TPB) is developed to explain the differences between planned and actual asset transfer (using a structural equation model of the TPB). Data to explore the problem and test the model were obtained from a postal survey of 2300 New Zealand farms (36% response). Findings: The results show manager attitudes related to their personality and objectives are the main causes of reluctance. The financial benefits from successful succession also need determining to provide incentives. Practical applications: Support systems are required to modify farmer attitudes and consequently reduce the reluctance. Originality/value: This work presents one of the first attempts to quantify and systems model (using the TPB) the succession process in a rural setting, and provides clear conclusions on reducing succession reluctance. Theoretical implications: Farming is controlled by humans reinforcing that farm studies must include the personal aspects of the decision-makers.