Csaba Makó

Managing Succession and Knowledge Transfer in Family Businesses: Lessons from a Comparative Research

The most natural mode of family firm succession is the intergenerational ownership transfer. Statistical evidence, however, suggests that in most cases the succession process fails. There can be several reasons as a lot of personal, emotional and structural factors can act as an inhibitor to succession. The effectiveness of the implementation of any succession strategy is strongly dependent on the efficiency of intergenerational knowledge transfer, which is related to the parties’ absorptive capacity and willingness to learn. nThe paper is based on the experiences learned from the INSIST project. In the framework of the project different aspects of family business succession have been investigated in three participating countries (Hungary, Poland and the United Kingdom). The aim of the paper is to identify the patterns of management, succession, knowledge transfer and learning in family businesses. Issues will be examined in detail such as the succession strategies of companies investigated and the efforts family businesses and their managers make in order to harmonize family goals (such as emotional stability, harmony, and reputation) with business- related objectives (e.g. survival, growth or profitability).

Heart and Soul: Transferring ‘Socio-emotional Wealth’ (SEW) in Family Business Succession:

Abstract The importance of the family business (FB) is not only stable but it is also improving its position in the global economy and playing a key role in the European economy. They represent 60 per cent of the employment and more than 60 million jobs in the private sector. But they face many internal challenges, of which the importance of ‘company succession’ is growing together with the need for technology renewal and attracting the right skills/talents (PwC, 2014). This article focuses on the transfer of socio-emotional wealth (SEW) as a key intangible asset during intergenerational changes in the FB (Debicki, Kellermanns, Chrisman, Pearson, & Spencer, 2016; Gómez-Mehija, Takács Haynes, Núnez-Nickel, Jackobson, & Moyano-Fuentes, 2007; Martinez-Romero & Rojo-Ramírez, 2016). Using empirical experiences based on multi-site company case studies in three countries (Hungary, Poland and the UK), the analysis presents the transfer of the following key components of the SEW to the next generation: a trust-based social-system, generic human values (namely, openness, mutual respect, correctness, reliability and responsibility) and ‘practice based–embedded collective knowledge’. We find that a key lesson is that transferring physical assets in the succession process seems to be less important than the transfer of the intangible ones embedded in the company’s culture because of the complex, informal and dynamic nature of the transferring mechanisms and of the role they play in sustaining entrepreneurial willingness and economic success over generations.

Developing Dynamic Innovative Capabilities: The Growing Role of Innovation and Learning in the Development of Organisations and Skills in Developed and Emerging Nations of Europe

The concepts of ‘high performance working system (HPWS) and lean production represent the theoretical and methodological foundations of this article. We make a distinction between three theoretical strands of the HPWS and the lean production approaches, namely: (i) the diffusion of the Japanese-style management and organisational practices both in the US and in the Europe (Aoki, 1990; Ramsay, Scholarios and Harley, 2000; Wood, 1999); (ii) the approach developed by advocates of the sociology of work, which deal with the learning/innovation capabilities of new forms of organisation of work (Makó, 2005; Valeyre et al., 2009); and (iii) the various types knowledge and learning process and their relations with the innovation capabilities of the firm (Lam, 2005; Makó, Illéssy and Csizmadia, 2012). We develop our arguments in both spatial and temporal contexts. A micro-level analysis accompanying our macro-level enquiry enables us to illustrate the key factors driving or impeding innovation and learning at both country- and firm-specific scenarios. We carry out international comparative analysis using both employer- and employee-focused surveys to demonstrate the diffusion and outcomes of workplace innovation in knowledge-based (information and communication technology [ICT] and business services) firms. We present the results of the various waves of the employers-oriented community innovation surveys (CIS) with special focus on the periods of ‘pre and ‘after financial crises and the economic downturn. We also draw on some of the empirical lessons on the innovation/learning capabilities of the work-organisations based on the European working conditions surveys (EWCS) and the views of employees. Finally, we select the fast-growing knowledge intensive business service (KIBS) sector to illustrate the key role of workplace/organisational innovations and their drivers in two selected post-social countries: Hungary and Slovakia. The aggregated country-level data do not help us to understand the drivers and enablers of innovation. We contend that sector-focused analysis may help us to better understand the roles of these factors in the overall innovation performance of each country. For the purpose of illustration, the diffusion of organisational innovations and company knowledge development practices were analysed in the Hungarian and Slovak KIBS sector. Slovak firms had a leading position compared to the Hungarian firms implementing more radical forms of organisational innovations which were accompanied with more robust learning practices. Drivers explaining this variety were the degree of countries involvement (embedding) in the internationalisation of the service activities and the development of networking (company group membership) process.