Expectation- Reality Discrepancies of Successor Attributes of Family Businesses

Family businesses are the pillar of strength to all the economies throughout the world. It is not surprising that majority of the businesses in the world are family businesses. Family business comprise of 90 percent of the businesses in India contributing to 90 percent national output and 79 percent employment. However, it has been found that the average life span of a family business is 24 years . 70 percent of family businesses fail or are sold before they are passed on to the second generation and almost 90 percent do not make it to the third generation , while 3 percent survive to a fourth or beyond . One of the reasons for the failure of family business is due to expectation – reality discrepancies between business owners perceived ideal successor attributes versus prospective successors perceived ideal attributes for family businesses. This study compares the successor attributes that potential Indian successors of family business consider most important with the findings of the successor attributes that Indian family business owners consider most important. The current study collected the data from 134 potential successors of family businesses from a reputed business school in Hyderabad and compared the findings with the successor attributes expected from the owner managers of the family firms.