|dc.description.abstract||Business succession planning (BSP) is a process through which organisations plan for the handing over of either the ownership and/or top management in the future (Ip and Jacobs 2006), therefore BSP is a main concern in family-owned businesses (FOBs). Succession in FOBs is nowadays one of the issues drawing great worldwide attention within the study of success and failure factors in FOBs (International Council for Small Business, 2010). The overall focus of this study looks at how ethnicity affects BSP in FOBs; particularly in small and medium scale migrant family-owned convenience stores and restaurants in Christchurch.
Researchers have long stressed the importance of business succession planning (BSP) in the sustainability of family-owned businesses (FOB) (Boyd et al., 2015; Mokhber et al., 2017); it is the key to the success of the FOB (Ghee et al., 2015). BSP in FOBs is part of a larger succession process and is defined as the ‘deliberate and formal process that facilitates the transfer of management control from one family member to another’ (Lybaert and Steijvers, 2015). Mandl (2008) reports that the success of a FOB is based on several integrated factors; the founder’s business management skills, including the formation of a solid foundation for successors, to the successor transition process. Mandl and Mokhber et al. (2017) in their study on BSP in FOBs report that many FOBs failed to appreciate BSP in their business resulting in only one third of the FOBs surviving into the second generation, and only 10%-15% making it into the third generation.
This research focuses on BSP in ethnic migrant FOBs; a popular concept in the modern multi-cultural society; where skills and aspirations to be entrepreneurial across borders have become more evident among many ethnic migrants across the world (Nnabue 2016; Mokhber et al., 2017). In doing so, McDougall and Oviatt’s (2000) findings is deemed as important where it identify a migrant business as ‘a combination of innovative, proactive and risk-seeking behaviour that crosses national borders and is intended to create value in organisations’. de Vries and Dana (2009) report that aspects such as moving across countries, settlement, culture and tradition and business emerged in a variety of forms based on an intricate and vigorous combination of the migrant entrepreneur’s background along with the receiving country’s socio-economic setup.
Studies by Ram et al. (2001), de Vries (2010) and de Vries and Kantor (2013) report that migrants face many impediments in the migrant country’s labour market such as racial discrimination, lack of necessary language skills (for example the ability to speak English in an English-speaking country), and limited employment opportunities, which has forced them into initiating entrepreneurial ventures to escape unemployment. In this process where migrants engage in entrepreneurial ventures, de Vries (2010), Ram et al. (2012) and Mokhber et al. (2017) state that, in most cases, these migrant businesses were regarded as FOBs and were often categorised as small and medium scale enterprises (SMEs).
With migrant businesses being mostly FOBs, Tatoglu et al. (2008), Kaunda and Nkhoma (2013), Vassiliadis and Vassiliadis (2014) and Mokhber et al. (2017) in their studies report that BSP is the key to the success and continuation of these migrant FOBs. Migrant FOBs have at their base a variety of nationalities and ethnic backgrounds (Sonfield 2014), and in spite of the different ethnic backgrounds of these migrants, it is important that these migrant FOBs plan for business succession the same as any other FOB (Nel and Abdullah 2014; Sonfield 2014; Gongález and Campbell 2018).
The literature on BSP in FOBs by Alcorn (1982), Bachkaniwala et al. (2001), Bagwell (2008); Whatley (2011), Saxena (2013), and Collins and Fakoussa (2015) reports on family business succession in terms of the different levels of business succession, the family characteristics in succession planning, transgenerational business succession, models for family business succession, and stages of family business succession. However, there is a notable absence of research on how ethnicity impacts the decision for business succession in migrant FOBs.
As mentioned before, this study investigates the impact of ethnicity on BSP in small and medium scale migrant family-owned convenience stores and restaurants and is unique because it is the first of its type in New Zealand. Literature reported by the Ministry of Business, Innovation and Employment (2011) and the Inland Revenue Department (2014) suggest that the retail trade and the food services sector was considered as industries with low-barrier-to-entry as these industries did not require extensive skills and/or knowledge and these were two industries which most migrants engaged in as a method of entering the New Zealand workforce.
The research sample comprised fifty-one research participants from twenty ethnic family-owned convenience stores and thirty-one ethnic family-owned restaurants operating within a five kilometre radius of Christchurch city centre, New Zealand. The sample was a combination of twenty-four Chinese, ten Indian, seven Thai, five Korean, three Vietnamese and two Japanese businesses. A mixed qualitative methodological approach including elements of grounded theory and case study methods was used, data were gathered via semi-structured interviews and analysed using NVivo.
A large proportion (49%) of the sample were middle aged (ages 35-44), tertiary qualified, second generation owners who are mostly male, who mostly believe that their ethnic background including culture, traditions, beliefs, religion, rituals, impacts on their business practices including their decision to plan for business succession. Interestingly, thirty-nine respondents (76%) had planned for business succession and twelve respondents (24%) had not. Given the high ethnic enforcements and the ethnic intensity, of those who had a BSP, thirty-eight (98%) held their plan in informal methods including at the back of their minds, merely as a thought and/or as a family matter discussed among family members. However, irrespective of such ethnic enforcements and family ethnic thinking of the participants, they were also eager to provide their children (heirs) with a good education that may result in the heirs wanting to choose a different career option over choosing to continue with the FOB. This resulted in creating a conflict of interest between two opinions which required further consideration by those who had a BSP; first, the business founders of the participants wanted their children to be well educated, which would enable them to become professionals and, secondly, because of ethnicity aspects such as “persevering family pride”, “continuing with the family reputation”, “fulfilling family responsibilities”, they also wanted them to take over the family business.
Irrespective of the incumbents having planned for business succession, in most cases a common feature in the respective ethnicities, having been brought-up and nurtured in the New Zealand cultural background and acclimatised to New Zealand surroundings, the heirs to FOBs were open to policy, societal, and environmental changes that may reduce and/or eliminate their interest in taking over the FOB in the future.
The study participants were, in some, cases oblivious to certain transformations in their behaviour and business practices that included their decision to plan for business succession. For example, some participants from the convenience store sector preferred to do their grocery shopping at supermarkets over convenience stores; the sustainability of convenience stores could be at a risk in the future.
Furthermore, the findings of this research highlights on potential changes in elements including policy changes and societal changes which could lead to a possibility in migrant family-owned convenience stores and restaurants coming to an end in New Zealand in future. It also emphasizes on a possibility of the ‘ethnicity’ factor becoming less intense in future due to such policy changes and societal changes.
The findings of this research add to present FOB BSP models and the literature.||en