No Heir apparent? Exploring the Worker Co-operative Model as a Solution to Family Business Continuity

Linda Murphy (), Olive McCarthy () and Bridget Carroll ()
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Linda Murphy: Department of Management and Marketing, Cork University Business School, University College Cork (Ireland)
Olive McCarthy: Department of Food Business & Development, Centre for Co-operative Studies, Cork University Business School, University College Cork (Ireland)
Bridget Carroll: Department of Food Business & Development, Centre for Co-operative Studies, Cork University Business School, University College Cork (Ireland)

Journal of Entrepreneurial and Organizational Diversity, 2017, vol. 6, issue 2, 20-39

Abstract: Family businesses, with no apparent heir, face the risk of discontinuity. While a number of family businesses rely heavily on non-family employees, the role of non-family employees in the continuity of family businesses is under-researched. The workers’ co-operative model offers one way to address this gap as it represents a model whereby non-family employees gain a stake in ownership whilst the family remains involved. In practice, conversion to ensure continuity is actively promoted in a number of countries. In this paper, the authors explore the role of the workers’ co-operative model as one possible solution to succession difficulties facing family firms. Based on the reported experiences in a number of countries, we identify the motivations behind conversion, the barriers faced and the benefits accruing. We find that, in theory, the worker co-operative model merits the attention of family business scholars as a means of securing continuity and survival of family business. We explore the factors that appear to aid or hinder successful conversions in practice and we make recommendations to policy-makers surrounding the supports required to encourage and facilitate successful conversion.

Keywords: Workers co-operative model; Family businesses; Conversion; Continuity; Succession (search for similar items in EconPapers)
JEL-codes: O10 P13 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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