Hand that rocks the cradle: Impact of personality on business succession in family-owned small business

Diep Ngoc Nguyen, Zeshan Ahmad, Ali Muhammad, Belal Mahmoud AlWadi and Elaine Yen Nee Oon

Journal of the International Council for Small Business, 2025, vol. 6, issue 4, 697-720

Abstract: Entrepreneurs’ cognitive and decision-making capabilities, as well as their ability to handle relationship dynamics, are influenced by their personality traits. This study aims to identify the personality traits of descendant entrepreneurs that contribute to the successful transition of their family-owned small businesses (FoSBs) into subsequent generations and to determine which traits require strong support from their predecessors for a successful succession transition. This study collected data from 224 descendant entrepreneurs using purposive sampling. SmartPLS software was used to analyze the data. The findings revealed that descendant entrepreneurs with openness, conscientiousness, extroversion, and agreeableness traits can handle succession matters successfully, while those with neuroticism traits may not. The study found that descendant entrepreneurs with extroversion and agreeableness traits benefit from strong relationships, while those with weak relationships can still contribute to successful succession due to their openness traits. Entrepreneurs with a conscientiousness trait can succeed without support from their predecessors, but neuroticism traits hinder successful succession. The study provides guidance for business families and policy makers on assigning job responsibilities and preserving relationship quality based on the personality traits of the descendant entrepreneur. It introduces a framework for FoSBs using the trait activation theory, with the predecessor–descendant entrepreneur relationship as a situational moderator. The study found that not all descendant entrepreneurs require strong support from their predecessors for a successful transition.

Date: 2025
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DOI: 10.1080/26437015.2024.2430575

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