Title: The suitability of internal versus external successors: relevant knowledge types in family business succession

Authors: Britta Boyd; Susanne Royer

Addresses: Department for Border Region Studies, University of Southern Denmark, Alsion 2, 6400 Sønderborg, Denmark. ' International Institute of Management, University of Flensburg, Munketoft 3b, 24937 Flensburg, Germany

Abstract: Understanding knowledge transfer in family firm succession is important for the survival of family firms. Previous research has begun to explore the suitability of internal versus external successor in family firms with regard to relevant knowledge types. This paper builds on the contingency model of family business succession in order to understand when family successors are preferred because of their family-specific experiential knowledge. A case study analysis from the German-Danish border region explores how a family firm has used internal successors for the last 12 successions. We argue that in industries where tacit knowledge forms the basis for competitive advantage, the use of internal successors can help family firms excel after a transition of power has occurred. Theoretical and practical implications are discussed to enhance the long-term perspective for family businesses.

Keywords: competitive advantage; experiential knowledge; external succession; genograms; internal succession; knowledge types; RBV; resource-based view; tacit knowledge; transaction cost economics; internal successors; external successors; family business succession; knowledge transfer; family firms; contingency models; family successors; family-specific knowledge; Germany; Denmark; border regions; power transitions; HBK Dethleffsen; wood products; building materials; management practice; family businesses; competiveness; business performance.

DOI: 10.1504/IJMP.2012.050315

International Journal of Management Practice, 2012 Vol.5 No.4, pp.361 - 382

Published online: 14 Nov 2012 *

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