Family business succession in Indian micro and small technology business

Purpose Micro and small businesses are run by entrepreneurs who have established businesses. However, conflicts often arose when transitioning these businesses to the next generations. This had been a challenge for most family-run companies. The succession of business without conflict to the next generation for healthy sustenance and continuance during the transition period had been a significant issue to be addressed. Therefore, this study aims to explore the challenges and strategies associated with family business succession in technology-dominant sectors. Design/methodology/approach The authors in this study empirically investigated the phenomenon of the three-circle model (TCM) and the three spiral theory (TST). The authors conducted a Focus Group Discussion with the founders and the second generation. In total, 22 founders were part of the focused group discussion (FGD), while 26 s-generation potential business inheritors were also part of FGD. Two FGDs comprises only founders, and two FGDs comprises inheritors separately. In addition, two FGDs consisting of founders and inheritors. The data was content analyzed for themes using NVIVO. Findings The study revealed that successful generational transition in technology-based family businesses required inheritance to have both business acumen and technical skills. A key challenge was to balance the ownership within the family. Clear governance structures and role boundaries were essential to minimize family conflicts. In addition, maintaining core values and adapting to technological changes were found to be crucial. Strategies to address ownership dilution, professional mentoring and regulatory compliance emerged as important drivers for sustainable succession. Research limitations/implications Integration of TCM and TST frameworks was required in family business succession, particularly in technology-enabled contexts. Moreover, existing theories and frameworks needed to be evolved to account for the dynamic nature of technology in family businesses. Practical implications India, as an emerging nation, required more successful examples of succession planning. The study insights would help family business owners to better manage their succession planning by integrating TCM and TST practically. Originality/value To the best of the authors’ knowledge, this was one of the first sets of studies on micro and small technology business succession planning. Most research on family businesses relied on the TCM framework. By integrating the two frameworks of TCM and TST, the current study provided a fresh perspective.