Succession Planning and Success in Family-owned Business Enterprise; A Case Study

Abstract

The authorized and published papers revealed that the persistence of family businesses is controversial in the future. There is empirical evidence to prove the fact that only 30% of family businesses span to the second generation and that only about 10% to 15% survive by the third generation. The major reason for this failure is improper succession planning. The objective of this case story is to identify whether the existing succession process is durable enough to safe guard the future of the well-known Sri Lankan family-owned business called Harischandra Mills PLC. The Company has a long history of over seventy-three years along with a household brand name with quality assurance. While this case focuses on the generational differences and the leadership transformation pattern between the founder and the successors of Harischandra Mills PLC, it also offers some important guidance for the micro and macro perspectives in entrepreneurship. The leadership transformation gaps of Harischandra Mills PLC were explored by the researcher along with safety measures to ensure long-term success, as well as for a smoother transition of the leadership. The success of a family firm depends on its ability to maintain the stability of the business. Hence, it can be said that an effective succession strategy is vital for Harischandra Mills Ltd. to attain a higher level of business performance and to maintain long-term sustainability.