Overqualified and disadvantaged: exploring the barriers to growth of family businesses to second-generation leaders

Craig E. Armstrong

International Journal of Entrepreneurship and Small Business, 2012, vol. 17, issue 2, 160-175

Abstract: According to popular perception, family-owned businesses do not grow. One explanation for this perception is that the next generation of business leadership is 'weak'. This explanation is both untrue and unfair. The purpose of this proposed paper is to explore the 1) human capital factors that affect differences in generational leadership effectiveness; 2) competitive factors that can hinder growth in family businesses; 3) the effects of prospect theory on the decision making of the second generation of leadership. In contrast to popular perception, I argue that the second generation of leadership is better prepared to operate - and even grow - the family business, but that the success of the first generation of leadership dramatically constrains the decision making space for the second generation.

Keywords: family business; succession; human capital; prospect theory; small business strategy; strategic management; firm performance; entrepreneurship; second generation leaders; generational leadership effectiveness; decision making. (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijesbu:v:17:y:2012:i:2:p:160-175

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