Chapter 10: Performance Lags and Gaps During Family Business Succession: The Dual Inefficiency of Succession Discontinuity and Lower Initial Postsuccession Performance

This study extends prior research, which has primarily considered succession as a single continuous process and paid less attention to the fact that there are key inefficiencies associated with a separated and discrete succession process that can be defined and categorized into distinct phases. More specifically, this chapter relying on the theoretical construct of the family business life cycle and the particular stage during which the succession occurs, examines 2 critical emerging inefficiencies resulting in performance loss during the succession process in family owned businesses, namely, the inefficiencies of succession discontinuity and lower initial postsuccession performance. We also introduce the notion of succession moderators, which have a significant impact on the intensity of these 2 distinctive succession inefficiencies. Finally, we propose a mathematical model that can assess the impact of the succession moderators on the succession inefficiencies enhancing or lowering a family firm’s overall performance.