Nonfamily knowledge during family business succession: a cultural understanding

Knowledge transfer plays a key role in the succession process. While much attention has been given to the passing of business knowledge form incumbent to successor, less is known about the use of nonfamily knowledge during this most crucial of family business events. The purpose of this paper is to look how knowledge from nonfamily employees is treated at times of succession. Importantly, it considers how the controlling family’s cultural background may influence nonfamily knowledge use, and subsequent implications for the succession process.

An exploratory comparative case study design is adopted in order to uncover the complex social and cultural dynamics around knowledge use. Four case studies are presented from family businesses of different, and contrasting, cultural origins. Data were collected using semi-structured interviews, observations and formal secondary data from the organisations, all of whom operate in the UK.

Findings reveal a complex picture, part influenced by the cultural dynamics of the family and part by business necessity. Specifically, power–distance appears as an informative cultural dimension, influencing how knowledge is used and nonfamily are perceived. While some family businesses privilege the knowledge from family, others see the need to build knowledge relationships more broadly.

This paper provides further evidence to the heterogeneity of family businesses. It moves beyond a processual explanation of succession to develop a more contextually aware understanding of the dynamics and sensitivities involved.